The ACC shambles

It is simply extraordinary that the Government, in planning changes to accident compensation in order to recover a better financial position for the state insurer, did not prepare the ground for legislation by first organising a majority in the House.

The minister in charge, Nick Smith, published draft legislation and then announced changes to ACC levies and reductions in entitlements in the knowledge that he did not have a majority to get the legislation even to a first reading and referral to a select committee. He has now found support in the interim from the Maori Party and is negotiating with Act New Zealand.

This legislation will represent a singularly important restructuring of state-provided welfare services during this National Government's term, yet it seems - as with the recent debacle over Rugby World Cup television rights - no-one in the Beehive comprehended the importance of that ancient dictum: politics is a game of numbers.

The Prime Minister limply stated it had not been possible to secure support before the Government announced its proposals.

So now Dr Smith and Mr Key are hostage to fortune, having advanced an action with great risk of later political trouble. Act has put the introduction of private enterprise competition on the negotiating table; it was last seen briefly and not especially noteworthily in operation in 1999.

Likely ministers will now be trying to match that ambition with National's election policy of "investigating" privatising the profitable part of ACC covering work-related personal injuries.

It is directly opposed by the Maori Party on grounds that costs for ACC would increase if private enterprise was able to take the only profit-making part of the scheme, and the Maori Party will only support the legislation to the select committee.

Lodging the crucial political process under MMP in the pigeonhole marked "afterthought" suggests Dr Smith's grasp of the mechanics of government is erratic, at best. It is bound to provide endless ammunition for the Opposition Labour Party.

Furthermore, it is plain to everyone that ACC has been permitted to grow into a bureaucratic monster, consuming millions that might otherwise be fairly distributed to the deserving, causing endless friction between some of those who are entitled to its benefits and those whose task is to distribute them, and raising well-founded questions about whether the scheme achieves what it was conceived to do, or whether it has become another inflated branch of publicly-funded health and welfare intended to compensate for all of life's traumas and misadventures.

The political problems for the Government beyond arranging support in Parliament include that the public now see ACC as an entitlement, like other welfare benefits, and resent changes to it that might reduce advantages or cost to get - the complaints over higher levies by some motorcyclists, for example, is as classic a response in a welfare state as it was predictable.