Govt makes ACC deal with Act

After a deal between the ACT Party and the Government, opening up ACC's work account to competition is inevitable but will not be good for taxpayers, Labour says.

This afternoon the Government and ACT issued statements after reaching an agreement where ACT will support a bill making changes to ACC and in return work would start on opening up the work account to competition.

The work account, which covers personal injuries in the workplace, is the only profitable account for ACC.

National last week announced changes to ACC, including cutting some entitlements and increasing levies, and needed the support of either ACT or the Maori Party.

The Maori Party agreed to support the bill through its first reading in Parliament.

ACT has now agreed to support the bill through all stages which gives the Government the numbers to pass it.

"I think it's clear that both ACT and National have made up their minds that they think parts of ACC should be privatised, notwithstanding the fact that its cheaper than Australian equivalents and notwithstanding it's the best compensation system in the world," Labour's ACC spokesman David Parker said.

"In the end New Zealanders will end up paying more themselves to fund the profit margins of private insurers and getting less cover."

The account was opened to competition between 1998 and 2000 until a Labour government re-nationalised it.

"We've been through this before and it ended in a muddle - people didn't know who was covering them ... the private insurers were a lot tougher when it came to people getting treatment and long term costs were projected to go up."

However, ACT Leader Rodney Hide said greater competition would provide more choice, quality of service and reduce costs.

"People should have a choice of insurance provider for work-related accidents in the same way that they have a choice for their home and car insurance," Mr Hide said.

ACC Minister Nick Smith said the bill, tabled in Parliament today, would be introduced next week.

The ACC Stocktake Group, expected to deliver an interim report in February, would be asked to look at the competition issue.

"The ACC Stocktake Group will also explore other areas in which the private and non-government sectors (including iwi) can be involved in accident management and compensation," Dr Smith said.

Two additional members would be appointed to consider the work account competition issue.

"Subsequent to the Government receiving the (final) report in June 2010, and the anticipated decision to open up the work account to competition as soon as reasonably practicable, the Government will introduce legislation into Parliament during 2010 to ensure the soonest implementation possible."