“What a pity it would be to realise, too late, that apparently wonderful proposals were methodically taking you directly back into the sort of erratic environment from which, at some earlier stage, you had managed to make a successful escape.” - Sir Owen Woodhouse
At present, ACC is the sole and compulsory provider of accident compensation in New Zealand. The current National government is planning to change this, by opening up the accident compensation market to private insurance companies, or ‘introducing choice.’ My project is only about workplace accident compensation; however, the government want to extend this privatisation to cover all kinds of accidents – car accidents, accidents at home, or on the sports field. As far as workplace accident compensation goes, under the new regime, employers will be able to choose to either purchase private insurance or remain with ACC as a their default provider.
So what? Well, this could affect New Zealanders in all kinds of ways:
- Private insurance will be more expensive than ACC. Private companies need to make profits – that’s the point. Ultimately, we could all end up paying for it: through levies, by losing entitlements and coverage, or because the state has to use taxpayers’ money to support the private insurance market or bail out bankrupt insurers (sound familiar?).
- Because there are financial incentives to do so, accident claims will be disputed, both by insurers and employers. This will mean legal disputes and delays in medical treatment and rehabilitation.
- Although new proposals are all about ‘choice’, employees don’t get a say in their insurance provider. Why the deference to business and not to workers?
- The no-fault principle which New Zealand uses for injury is great, but the entitlements we get in return need to be maintained and guaranteed. We have given up certain common law rights in order to have a no-fault scheme. It’s important to think about whether any reforms might affect the scope or quality of ACC provisions.
- ACC paid out more than it had to for the Christchurch earthquakes. Would foreign insurance companies do the same?
- The current proposal, which leaves ACC as a competitor in the market, is not particularly dangerous. What is dangerous is that the government could then move to make ACC a state owned profit-driven enterprise, or dismantle it entirely.
- International trade agreements New Zealand signs up to could make any reforms practically irreversible. More on that here.