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!
Is that what is known as a “fisking”?
I thought that’s what the security guards to do you at airports if you have a beard or an accent.
Tell me about it…
Bravo to the CTU. First rational response to the National policy statement I’ve read.
Excluding your hosts, clearly.
Same thing Steve surely?
Some hosts more than others.
Well done CTU.
Could someone dig out the interview with a very articulate lawyer on TV news or John Campbell a week or so ago, and add it to thestandard. He clearly enunciated the reasons that privatization was a dog; that the legal costs, the pressure on returning to work early, the lesser coverage,etc. He was brutal.
Put beside the CTU case, the Nats will look very weak.
Wonder how much money the CTU could lose if ACC is privatised.
dave – you are a retard. No. You are the retard’s retard. Actually if the retard’s retard had a retarded dog you would be the retarded flea on the retard’s retard’s retarded dog.
['sod. no need to get personal. next time, say the comment is retarded. SP]
dave, how on earth could the CTU lose money if the ACC workers account is opened up to private insurers?
What are you suggesting?
Of course, the CTU and its members may incur addtional costs taking up the fight on behalf of employees left out in the cold by private insurers and their employers!
Actually if the retard’s retard had a retarded dog you would be the retarded flea on the retard’s retard’s retarded dog.
And you, Porton are the retard of the blogosphere. No, It would be too kind to say that you would be the retarded wing on the retarded flea on the retard’s retard’s retarded dog – even if that retarded wing was drenched in the urine of the retards retards retarded dog that had a urinary tract infection.
Unfortunately, as with other disability issues, it takes personal or family experience before some people realise how important it is to have a comprehensive and universal accident compensation system like ACC. In the early 1970s ACC was started with cross party support from MPs, many of whom had had first hand experience of war and injury. They didn’t want people to be revictimised trying to access support.
It is so sad that this visionary system could now be vandalised for an ideology of so-called choice, which in reality is about profit for private international insurance companies.
What I would like to see instead is a movement towards recreating our own Kiwi insurance company – such as State Insurance used to be. Wouldn’t it be wonderful to have a company called Kiwi Insurance where you knew the profits were going back into building security for NZers.
No dave – you don’t get it. You can’t just repeat what I said (but with appalling punctuation) and then claim to be smarter than me – you’ve got to either shoot it down outright or play on it in a way that makes it funnier at my expense. But I guess I can’t expect much more from a tard like you…
I don’t need to “claim” to be smarter than you. It’s obvious that I am.. you’re not a medical misadventure are you? Thought so. Hope your mum is still getting ACC.
Kiwibank has a fully owned subsidiary called Kiwi Insurance, it does life insurance.
Um… I really don’t know what to say there dave – I mean I could mock your sense of reality but I’m actually starting to feel pity for you and bro? It’s confusing me.
Dave and ‘sod. you’re both heading for bans. Rein it in.
And, Dave, when you make such silly comments as suggesting the CTU makes money off ACC, you invite responses like you got.
What about car, home and contents insurance? That’s what I’m after.
Car, Home and Contents are offered by Kiwibank but the policies are underwritten by Tower. I’d imagine they’ll bring those into Kiwi Insurance later once they’ve stabilised the main banking business further and established a stronger credit rating etc.
Some people have short memories about the last time National handed over the work account to private insurers and provided “choice and competition” (yes, that’s what they said last time too). There were arguments about which workers were covered and how. Workers were caught between one insurer and another because they had two jobs. There were many instances of spurious rejections, many workers had huge battles getting the insurer to take their claim at all. Frustrated doctors had to deal with a plethora of insurance companies, many of whom would not accept injury claims. Workers who lost —and it was very hard to win —were forced onto social welfare, and lost money with lengthy stand-downs. Many with injuries that took longer than a couple of weeks to heal were simply sacked and also forced on to the welfare system. The entitlements were miserable, injury prevention was not improved, and rehabilitation was undermined. We only saw the tip of the iceberg because Labour quickly renationalised ACC when it became government in 1999.
This on its own should be enough for every worker in the country to vote to ensure National never becomes the government.
Jon do you have any links for the information you’ve posted on above, I be interested to have a look for myself.
higherstandard, you spoke like a pirate. Full credit.
Arr, ye got the wrong day though…
Oh hs just saw this in the Herald:
http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10522073
The previous National government opened ACC to competition and Labour re-nationalised it when it won the 1999 election.
The New Zealand Society of Physiotherapists warned today if ACC was reopened privatisation many accident victims would suffer through their injuries or have to pay for their own rehabilitation.
“We saw it last time ACC was privatised,” society president Jonathan Warren said.
A survey commissioned by the Department of Labour in 2000 showed the number of injury claimants dropped off by up to 40 per cent during the time of privatisation.
Patients were so confused about how to claim coverage for their accidents that they sometimes just gave up in frustration, which resulted in chronic conditions, he said.
Some employers reportedly deterred workers from making claims in case premiums increased, and the same fear put off the self-employed.
And some employers reportedly pressured workers to say their injuries were not work-related. More claims were declined, as insurance companies denied responsibility, Mr Warren said.
“Patients were caught in the middle of a bureaucratic nightmare as physios and other providers struggled to see what company covered them.”
(interesting to note that they say it’s “opening ACC for competition” but yet Labour “re-nationalised” it in 1999. Pick one and stick to it…!)
higherstandard – just go talk to a few ACC advocates, lawyers, unions, electorate office staff, CABS and other advocates, as well as health professionals who were around when National did this last time. Another place to look is on the submissions to the 2001 bill – which tell some real horror stories, although sorry, I can’t give you a link.
Does the CTU have an explanation for this claim by Phil O’Reilly of Business New Zealand?
“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.
Does the CTU have an explanation for why their former president was appointed the chair of the ACC board?
See the recent book Blood on the coal by ACC specialist lawyer Hazel Armstrong for a potted history of accident compensation and details of how it played out over the decades (until today). It is a booklet and you can order it through Hazel’s law firm (it was about $10).
So a group of ex communist party members are against Key, surprise surprise, whats next, those wackos at peace action New Zealand?
Name the ex Communist party members.
Go on.
Hello? Hello?
Come on Brett, your hero Joe McCarthy didn’t give up this easily.
I wonder what Aunty Helen’s right side Lady, Marion Hobbs, thinks of this thread.
Or National MP Tau Henare. Sins of the past, eh?
Come on, Brett, son of McCarthy. You’ve smeared the CTU.
Options: 1) names 2) an apology. I’d choose option 2 if I were you.
“Goodnight, and good luck.”
Posted in one of the other threads:
I’m just interested for someone to tell me why it is the employer’s responsibility to pay for ACC cover for their employees.
If I want health insurance, I make my own choice and payment arrangements.
The question of employer’s liability is amply covered by the existing OSH requirements and laws.
“Name the ex Communist party members.”
Keith Locke, Sue Bradford (may all well be current for all we know)
Ken Douglas.
[Irishbill says: Keith Locke is not a member of the CTU. Sue Bradford has never been a communist and is not a member of the CTU. Ken Douglas was a member of the SUP but no longer has anything to do with the CTU but I'm pretty sure he's a director on the Rugby Union board; that hotbed of Stalinist activism.]
Swampy – were they the authors of this report on National’s ACC policy?