National stands by opening up ACC

NEW ZEALAND HERALD: It would seem no one - except perhaps insurance companies - wants a return to competition in the provision of accident compensation services.

Not even business groups are keen for a repeat of the brief period in 1998 and 1999 when the last National Government privatised the sector.

And yet the National Party is promising to investigate opening workplace cover up to competition again.

United Future also supports the introduction of some competition, and Act would fully privatise the service.

National's ACC spokeswoman, Pansy Wong, said New Zealand's workplace injury rate was on the rise.

"We don't believe the current system is providing incentive enough, particularly on prevention of injury, and also rehabilitation," she said.

Paul Jarvie, occupational safety and health manager for EMA (Northern), said employers were keen on competition at the "tail end", giving them the ability to choose private providers to manage their employees' rehabilitation.

But they were not keen on private insurers.

"The research really doesn't indicate that it's the best option.

"You might get some wins in the first couple of years as everyone's scrambling for your premium dollar." That was seen in the late 1990s, he said.

"But we were quite sure that year two, year three, those premiums would increase just to cover those costs again."

He said employers would like a return to the 1990s situation when each had an individual account and were assessed against an average. Those that came in under got a rebate, and those over attracted a penalty.

"It really spurred on the whole concept of return to work and rehabilitation. That has eased somewhat with people going back into groups again, because you can't individually have any effect on the premium."

Professor Bruce Arroll, head of general practice at Auckland University, said the privatised system was "a nightmare".

Patients never knew which company they were with and there was a lot of duplicated paperwork.

"From a GP point of view it was very inefficient, and I think one of the things about the system is its efficiency, really."

National Distribution Union national secretary Laila Harre said she found it "unfathomable" that any party was seriously pursuing a return to competition, particularly at a time when the risks of "financialising" the world were being seen.

ACC Minister Maryan Street said Labour had a renewed commitment "even more firmly expressed" to keep ACC as a Government-run monopoly.

Its 2008 ACC policy has yet to be released, but she has already promised a law change pushing out the date by which residual levies must be paid from 2014 to 2019.

Residual levies are left over from the period of privatisation, when injuries were not sufficiently budgeted for.

The catch-up was placing too much pressure on employers, she said. Pushing the date out would also help the motor vehicle account, and she anticipated being able to lower the vehicle registration fee from the proposed $287 next year to $203.