Govt moves to calm fears over ACC

Nick Smith. Photo / Supplied

People now receiving compensation and treatment from ACC will not have their entitlements retrospectively taken from them, the Government said yesterday.

On Wednesday, ACC Minister Nick Smith said entitlements would have to be cut because of a blowout in treatment costs and growing liabilities.

The alternative of large increases in levies for workers, employers and motorists was not acceptable.

Under Labour, ACC had stopped acting as an insurer and become a welfare agency, said Dr Smith.

Changes would be made to ACC's board, chaired by former union boss Ross Wilson.

Physiotherapy was budgeted to cost $9 million when introduced in 2004, but was now costing $139 million and was projected to rise to $225 million by 2011-12 with no equivalent rise in rehabilitation rates.

Society of Physiotherapists president Jonathan Warren said funding physiotherapy treatment for injured people was cost-effective.

"It's the physio who gets people back to work, play and normal life as soon as possible," he said.

"An independent review showed that ACC is a long way from covering the full costs of physiotherapy now. The review showed that it's physios who are subsidising a good part of the costs of ACC treatments which many injured people have received for free in the last couple of years."

Mr Warren said his organisation would be happy to work with ministers and officials to find the best way to provide services.

High ACC compliance costs could be reduced and giving physios the ability to set part charges would help.







Yesterday, Labour said Dr Smith was manufacturing a crisis to win a mandate for cuts to ACC's coverage and the introduction of part-charges.

In Parliament, Dr Smith was asked whether cuts would be made to the entitlements of current claimants such as those receiving long-term treatment and compensation for medical misadventure cases.

He replied: "The new Government will not be making any retrospective changes, but it is true that Labour made extensions to the scheme that were not funded."

Labour's ACC spokesman, David Parker, said National was exaggerating ACC's liabilities and the need for large levy rises to fund them and increased costs.

Mr Parker said the Government could also extend the date from which the scheme was meant to be fully funded from 2014 to 2019.

ACC has liabilities for claims from before 1999 which means some of today's levies pay for those liabilities as well as the full cost of future treatment after current accidents.

Dr Smith said it was wrong to portray the delay of full funding as an answer to ACC's problems.

"All it changes is when we pay and if costs doubled as they did ... at some point levies must follow suit."

Extending the date would reduce the levies in some accounts, but not all of them and the debt would go on to the Crown balance sheet, he said.

Even if the date were extended, the average family would still face levy increases of more than $2100.

Dr Smith said the Government would introduce legislation to push back full funding until 2019, but it was not necessary to do this urgently.

The Government has to set the motor vehicle levy soon and Mr Parker urged Dr Smith to introduce the law now to keep the rate rise to $30.

Dr Smith said he would not lift the levy by the recommended $120 to $376, but a law change was needed.

The legislation would be passed before the next levy rate is considered at the end of this year.

- NZPA