Key Points:

National's plans to open up ACC to private competition are not secret and are in line with its 2005 election policy, leader John Key says.

The Government went on the attack yesterday, challenging National to come clean on its policy, after a report by the Australian broking arm of merchant banking firm Merrill Lynch said that Australian insurers could reap $200 million from such a move.

The report, by the firm Mr Key used to work for, said National was yet to release its 2008 policy but had been informally telling the insurance industry ACC would be opened to private competition.

The report also noted that average premiums in New Zealand were lower than Australia, despite New Zealand offering more extensive cover.

Ministers said the report showed Australian companies would profit at the expense of New Zealanders if ACC were opened to competition and National needed to state its plans.

But Mr Key said little had changed, with National consistently stating it favoured "choice" in accident insurance. National's 2005 policy was to allow private companies to compete with ACC in its worker, motor vehicle and medical misadventure accounts.

Mr Key said its 2008 policy would be out before the end of the month and would include moves to end the state monopoly in the sector by introducing private competition. This would help lower costs.

But he said National would not be privatising ACC. "We won't be expanding that or doing that unless we can deliver safer workplaces at a lower cost to New Zealand consumers."

He said that was no secret. National's plans for ACC were included in the party's rural issues discussion document released in June last year.

Mr Key said he did not know where his former firm got its information from, but he had not given inside information to it or other insurers.

But Prime Minister Helen Clark said Mr Key should not be trusted. "The so-called pledge not to privatise is not worth the paper it is written on."

ACC Minister Maryan Street said the report mirrored independent research by PricewaterhouseCoopers that found Australian employers were charged 250 per cent more in levies as a proportion of wages.

The Council of Trade Unions also questioned why National was planning to privatise parts of ACC when evidence suggested there would be little benefit.