Don’t mess with our ACC
For the past six to eight weeks the spin machine has been working overtime and spewing out half truths and misinformation about ACC. We have had the chairman (an accountant) stating it is under-funded and will have to examine and raise premiums sector by sector with motorcyclists being clobbered hard. Employers have been ‘warned’ […]
|For the past six to eight weeks the spin machine has been working overtime and spewing out half truths and misinformation about ACC. We have had the chairman (an accountant) stating it is under-funded and will have to examine and raise premiums sector by sector with motorcyclists being clobbered hard. Employers have been ‘warned’ that employee contributions will have to rise. And so the scare-mongering goes on. The Minister has chimed in with comments about how part of ACC may have to be opened up to competition. The even more strident comments coming from a minor party indicate that they either do not understand the underlying principles behind ACC or are being deliberately disingenuous. A cynic might think that its time to pay back some corporate political donor – but I digress.
It would appear all those mentioned above have NO IDEA what ACC is and how it is intended to function.
The retention of ACC as the primary provider of workplace accident compensation cover is essential, especially for the small business. The alternatives being discussed at present in the wake of the softening up process are a nonsense that will significantly raise employer costs and lower benefits. The suggestion that cost savings can be delivered by the private sector is not just bunkum it is palpably untruthful. Insurance companies consume approximately 30 percent of premium on operating costs. At ACC the figure is below ten percent.
It is a pity that the government needs a history lesson but the introduction of ACC is part of a significant piece of legal reform whereby the community would lose the right to sue for negligence following an accident and that compensation would be paid based on five straightforward principles:
• Community responsibility for accidents.
• Support for accident victims.
• Comprehensive entitlement regardless of cause.
• Complete rehabilitation.
• Compensation for the whole of any incapacity based at 80 percent of previous earnings.
ACC is part of the social welfare system and not some state funded insurance scheme. It operates like National Super and is a pay as you go system, not pre-funded as the spin-meisters would have us believe. This is an important distinction and entirely practical. If it were pre-funded the entire compensation fund for all past and current accident victims would have to be squirreled away; it would be completely unaffordable. It is as daft as expecting your insurance company to guarantee they have the assets now to meet all their future liabilities. If this is what the chairman considers should happen he should get back to counting beans and leave proper governance decisions to others with a real understanding of how business operates.
ACC premiums are based upon the first of the five principles – community responsibility, which means we all share the risks and pay equally. Once you start cherry picking groups who may receive disproportionate benefits, e.g. motorcyclists or rugby players, you undermine the core principle and will have people seeking the right to sue in return. Minister Smith and the government have been making noises about reducing the benefits of those who have suffered injury (80 percent of pay down to 60 percent) and forcing others back to work and more. In the run up to the introduction of ACC (in 1974) the rights and obligations were made very clear and benefits were an entitlement, NOT a claim subjected to the whim of an insurance company. If government wants to hand over the running of core state services to the private sector why not the Police, Defence or Education. Oh, I nearly forgot the Education Minister determined, with Cabinet backing, that private schools should receive an increase in their state subsidy this year whilst community education was being cut.
The notion that the ‘market’ can deliver ACC or any other essential state service more effectively and equitably than central government is comical. What next, the expectation of profit from the Army, WINZ or even roads? No, we had all better get used to the idea that there are activities where the market is a hindrance, not a help.