Written By: - Date published: 2:07 pm, July 17th, 2008 - 48 comments
Categories: national, workers' rights -
Tags: ACC
The Council of Trade Unions has put out a detailed, devastating critique of each of National’s arguments for privatising ACC. I’ve copied it in full below:
National Party: ‘National will:
• Investigate opening the Work Account to competition.
• Conduct a full stock-take of the various components of the ACC scheme, evaluate progress to full funding, and identify areas of cross-subsidy or cost-shifting and underfunding of newly-legislated entitlements.
• Investigate the introduction of an independent disputes tribunal to end ACC’s dual role of judge and jury on disputed claims.’
Response: There already has been a full stock take a 500+ page review by PricewaterhouseCoopers Sydney (PWC). PWC said that they had formed ‘a moderately strong view that a government monopoly is the best observable mechanism for implementing the ACC employers account’.
The Report also found that that in comparison with schemes overseas the dispute rate in New Zealand is very low. In particular for workplace claims, ACC’s dispute rate of 0.2% compares with an Australian average of around 9%. The report found ACC’s universal coverage (which removes most of the coverage boundaries) and the lack of employer experience ratings of premiums may also contribute to the lower level of disputes.
National Party: ‘OECD data to the end of 2003 showed New Zealand’s non-fatal injury rate rising when everybody else’s except Luxembourg were falling. ACC data shows the number of work-related injury claims increased each year from 2002 to 2005, only declining in 2006.’
Response: Statistics NZ report that between 2002 and 2005, the number of work-related claims dropped from 143 to 134 claims per 1,000 FTEs, a 6% decrease in the rate of claims over four years.
In addition, elected health and safety reps were introduced in 2003 as part of the 2002 amendments to the Health and Safety in Employment Act. International research has shown the value of having worker representation and this is generally accepted as best practice by those interested in keeping workers safe. The Council of Trade Unions runs a health and safety rep training programme, funded by ACC. The programme’s trainers (who have trained 20,000 reps) believe that increases in claims result from workers who are more aware of ACC and what they are entitled to in terms of accident compensation.
National Party: ‘Incentives for employers to improve safety practices are poor in a scheme in which similar premiums are charged regardless of an employer’s workplace accident record.’
Response: Privatisation to insurance companies opens up new incentives to deny injured employees cover. Claims are denied and fought and employers and insurers can collude together to deny accidents occurred in the workplace. Spending or rehabilitation is reduced and the costs are shifted from the employer to the worker. It is a fundamental conflict of interest to have employers managing employee injuries which are caused at the workplace and are linked to employer insurance premiums.
National Party: ‘Where accidents do occur, incentives for quick, high-quality rehabilitation are weak, and entitlements under the scheme for injured people are not of high quality.’
Response: NZ workers are back at work on the job earning their full wage quicker than Australian workers. Under ACC 88% of claimants return to work within six months, and this outperforms both the Australian average (85%) and all three comparable schemes (the state monopoly schemes of NSW 86%, Victoria 85% and South Australia 77%), with similar results for durable (longer-term) return to work. Source: PWC report
ACC’s income-replacement benefits of 80% of pre-injury earnings is in line with or above many other schemes. Some workers’ compensation schemes provide benefits which are higher initially, but in many cases benefits are reduced over time by ‘step downs’ in these schemes. Total ACC financial benefits are broadly in line with other workers compensation schemes in Australia. – Source: PWC report
Workers compensation schemes which are closely comparable to ACC (periodic income benefits, comprehensive case management with coordination of a full range of benefits and services, and a focus on qualitative claimant outcomes of participation and independence) are all delivered through government monopolies, whereas privately underwritten schemes generally have a stronger focus on lump-sum financial settlements. A significant research base indicates that claimant outcomes are demonstrably better under periodic payments than in a lump sum environment. – Source: PWC report
National Party: ‘The experience of competition in the late 1990s was healthy for ACC. Levy rates are now substantially lower as a result of that experience, and the ongoing prospect of competition.’
Response: The experience was not as rosy. When National last promoted so-called choice in accident compensation one of the providers, a subsidiary of HIH Insurance had up to 40 percent of workplace cover, yet HIH went into liquidation with losses of around $1 billion. Fortunately, the Government had by then changed ACC back to public provision. There was very little collation of any other data when the scheme was privatised in 1990 so National’s statement is speculation, not backed up by the experience of unions, that competition worked.
National Party: ‘Labour has retained the ability for larger employers to opt out of the state monopoly and either self-insure or use a private insurer.’
Response: The arrangements with large employers are closely regulated and ACC has the ability to remove accreditation. The CTU has serious concerns with the current Accredited Employer Scheme operation and believes this experience would be exacerbated with privatisation.
National Party: ‘With this in mind, National supports the introduction of competition and choice to the ACC Work Account (covering employees and the self employed at work). We believe this will result in safer workplaces and a more efficient and effective accident compensation system that benefits all New Zealanders.’
Response: Comparisons elsewhere indicate that privately underwritten workers compensation schemes as a group have higher levels of administrative cost on average than government monopoly schemes, likely driven by the need to cover profit margins and marketing expenses. – Source: PWC report
Our scheme has cheaper overheads than those in Australia. New Zealand has lower claims management expenses (8% of total expenditure) than all Australian schemes (9% to 32%), and lower total administration expenses (24% of total expenditure) than the schemes providing comparable benefits (NSW 28%, Victoria 31%). In addition to these administrative expenses, most Australian schemes also pay significant legal costs for common law claims. – Source: PWC report
PricewaterhouseCoopers compared the current ACC scheme with other delivery models and they said based on available evidence, alternative scenarios (a mix of the systems in Australia, Canada and the US) would:
• have poorer rehabilitation and financial outcomes for the bulk of injury victims whose access is limited to the social welfare and health systems
• have poorer return-to-work outcomes and more variable financial outcomes for the small proportion of people in the fault-based insurance system.
National Party: ‘Employers provide the basic minimum cover for staff, as they are obliged to do. A more flexible scheme would encourage employers to buy more than the basic cover.’
Response: Employers could currently offer additional insurance to ACC it is not evident that many do this.
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Scoopit!
“Swampy
“We would like to see employers reimbursed for the $800 million of business levies held unused in ACC reserves, and to see an end to the over-charging that caused it,’ he said.”
An insurance company keeps money is reserve incase of unforseen circumstances?!! how dare they! that woudl be being prudent or something.
I suspect Phil O’Reilly is just attempting to exploit the general publics ignorance towards the workings of an insurance company, and guess whos sucker number 1 swampy .
“gobsmacked
Options: 1) names 2) an apology. I’d choose option 2 if I were you.
“
Option number 3) walk out infront of a bus (preferibly in a manner resulting in your death rather than an ACC claim) and stop wasting everyone elses oxygen.
“I’m just interested for someone to tell me why it is the employer’s responsibility to pay for ACC cover for their employees.”
The simplest answer would be so that they are dealing paymets information coming in from 200,000 different employers rahter than 2 million different employees. (I have no idea the numbers, those there are just to demostrate my point)
Robinsod, go back to your little boys blog where you can dream about getting a real job in the real world with the big boys one day.
sean – that should be “little boy’s blog” (or possibly “little boys’ blog” depending on whether you mean a blog of/for one little boy or more) – it’s all about the possessive apostrophe. Perhaps when you achieve some degree of literacy someone will gainfully employ you…
Its a shame that the CTU weren’t so vociferous when the truckers went on their blockade after all they represent those people too. But nay not a word was spoken!! Wonder if they would have said anything if it had been a National Government in Kind of hypocritical don’t you think.
Rob: Ummm – As I understand it, the truckers protest was against road users charges. It was done by either owner-operators or employees paid to do it by their employers.
Tell me exactly how that relates to the workers wages and safety that the trade union movement exposes.
Maybe you need to go and have a look at what the trade union movement actually does. You statement above looks like you blowing bullshit and trying to present it as some kind of fact.
If I wanted that kind of idiotic narrative, then all I have to do is turn on Fox News. You appear to be working at the same level – comedy.
Iprent
Simple the Workers drive the trucks they are represented by the Union. The trucking firms go out of business because they are financially stretched to the max and, Labour adds more charges.
The workers lose their jobs its called flow on effect. Not all bosses and businesses are bad and the Union should be supporting companies like trucking firms and their workers to keep their members in a job.
I would have really thought that was quite simple unless you are ideologically blind that all bosses and companies are bad and we dare not say something against the Labour Government
Exactly why would the union movement be interested in individual employers welfare?
The goods still have to be shipped, presumably the inefficient and badly run firms will succumb to the market. The efficient ones will continue to employ drivers. That is how things are meant to operate in an efficient market, especially when responding to economic shocks.
In this case the road user charges are there to pay for the roads. As far as I can see, the trucking firms are trying to leverage their way out of paying their share.
As an aside, I was under the understanding that there wasn’t a lot of unionization amongst truck drivers. I’d be interested to hear if that is the case or not.
So as I said – why do you think that the union movement should be interested?
Edit: Looks to me like you are simply spinning a irrelevant diversion away from the topic
Good question about unionisation of truck drivers Lynn – I have no idea but did a quick search in google to find out the commentary I found while not an answer is an interesting read from a site I would have thought should provide a fairly left of centre perspective.
http://www.wsws.org/articles/2008/jul2008/newz-j10.shtml
Swampy – Ken Douglas a communist? He’s on the board of Air New Zealand for crying out loud. No real communist would be associated with such a bourgeois reactionary.
Pretty lame that the best argument you can come up with is calling someone a “communist”. How is that even an insult?
Rob – From memory, the NDU gave some support to the truckers’ cause by calling for talks on road-user charges, as did the Workers’ Party (albeit from an anti-capitalist perspective). It doesn’t sound like you really understand that unions are employees’ associations, not contractors’ or business associations.
Meanwhile, all those communists in the CTU are fretting about the vast profits they will lose if ACC is privatised. It will mean an end to flying to Cuba in the CTU private jet “Stalinista” for conferences about reducing choice and eating babies while dining on foie gras and caviar. Idiots.
Tim, they stopped serving babies in Cuba in about ’98 and the commies use the CTU’s luxury yacht more than the jet (unless it’s pressing business).
“Swampy – Ken Douglas a communist? He’s on the board of Air New Zealand for crying out loud. No real communist would be associated with such a bourgeois reactionary.”
LOL. He was appointed by his friends the Labour Government to that board.
Swampy
July 17, 2008 at 11:54 pm
I’m just interested for someone to tell me why it is the employer’s responsibility to pay for ACC cover for their employees.
=======================================================
Hi Swampy..ACCSUX HERE . Employers do not pay Acc levies for you..
they are paying these levies so they can not be held accountable when they are negligent ,and make there workers do dangerous things.. AND THERE WORKERS GET HURT… The bad bosses pay Acc levies to cover them FROM EVER BEING HELD ACCOUNTABLE.. They are COVERED…
while the good bosses are forced to pay Acc levies to cover the extra costs incurred in accidents , in dangerous work places..
The Acc levies your boss pays does not cover you.. it covers the business you work for.. your bosses… the negligent.. THEY CAN NEVER BE SUED ,, HELD ACCOUNTABLE..
No different to the Rego levies.. the guy that hit me, HEAD ON , ON MY HARLEY , HE WAS SPEEDING OVERTAKING HEAD ON INTO ME , DANGEROUS DRIVING…hE IS COVERED FOR LIFE ,, YET I GOT AND GET NO COVER…
HE paid his Acc levies and insurance to cover him,, not the person he hit..He is automatically guaranteed he can never be held accountable for his negligence..
AND I GET NOTHING BECAUSE OF DISCRIMINATING ACC ACTS.. AND HUMAN RIGHTS VIOLATIONS..
US GUYS THAT GOT THE ACC COVERED ADD BANNED ARE NOT COVERED..
IT WAS FOUND TO BA A LIE.. AND A 5 MILLON $ BRIBE TO KEEP PROTESTERS OUT OF THE NEWS AND OFF TV….
YET I ARE STILL BEING FORCED TO PAY IN TO ACC.. AND I STILL GET NO COVER..
So i are protesting these scum personally..
The ACC ACT TAKES MY RIGHTS AND COVERS THE GUILTY FOR LIFE AUTOMATICLY..
BUT HEY nATIONAL STARTED THIS CRAP WITH CHANGES TO THE ACC ACT,, AND LABOUR HAS JUST SAT ON THE FENCE OVER IT TOO,, FOR YEARS..
ACCSUX NOT COVERED…