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Big bucks for Aussie insurers in ACC privatisation

Written By: - Date published: 10:30 am, October 20th, 2009 - 9 comments
Categories: ACC, privatisation - Tags:

It seems certain National will begin the privatisation of ACC starting with opening the work account to private competition. As happened in 1998, private insurers will cream off large and low-risk employers with loss-leading special deals to gain market share, leaving the taxpayer to shoulder the burden of the rest, and put up premiums later.

An intriguing report from Key’s old firm Merrill Lynch reveals that Australian insurance companies expect to make $200 million off this privatisation.

acc-undermine-200A prime source of these profits will be reduced pay-outs. As you know, that’s how private insurers make profits by avoiding paying out whenever possible. Insurers spend huge amounts on court cases trying to avoid paying out, which ties up the court system. In practice, that will mean Kiwis missing out on speedy treatment and income coverage, while Aussie insurers get rich.

Here’s what an independent report into ACC by Price Waterhouse Coopers has to say (they’ve removed the report from the ACC website, but it’s referenced here):

‘The ACC under its current implementation structure performs as well or better than most other schemes we can observe around the world.’

‘No fault’ models (such as ours) are associated with:

  • More injured people (70-95%) receiving compensation;
  • More money reaching people: A higher portion of total costs (up to 90% in some schemes) goes directly to claimants’ benefits compared to perhaps only 50% in liability systems;
  • Getting results faster: No fault systems get payment happening more quickly than in tort systems. The average settlement completion in the US tort system is 15 to 20 months, whereas benefits flow in 3 weeks on average in an uncontested workers’ compensation claim, and 4 months in contested claims; and
  • Outcomes for people are better. A New South Wales study (on a blended system) found those on the no-fault system better off in terms of health outcomes and return to work rates.

Only two groups stand to gain from National privatising ACC. Not businesses and workers insurers and lawyers.

[PS. I’ve shamelessly stolen some of the above from the excellent posts SP and Dancer did on ACC last year]

9 comments on “Big bucks for Aussie insurers in ACC privatisation ”

  1. Tom Semmens 1

    You know, I’ve been thinking about this issue, and why National are polling so high. An examination of how the main media outlets have covered this story should offer an a good deal of insight into National’s extended honeymoon and how they can get away with manufacturing a crisis for a corrupt sell-out to their Australian paymasters.

    So far, we’ve had two Herald editorials, and columnists like Kerre Woodham, uncritically adopt and push the goverment line. We all know what Fran O’Sullivans view on ACC is.

    We have had Jim Mora stacking his “panel” (most days little more than a conservative echo chamber with ill-informed panelists who hang on every word of carefully chosen right wing commentators) with people who echo the government line. We’ve had Sean Plunkett yelling down critics of the government on ACC on Morning Report.

    As Gordon Campbell notes today in his blog, the press gallery does little more than offer fawning management advice to John Key at his press conferences. The tone of Colin Espiner’s blog entries lately makes it clear he couldn’t be happier with the popularity of John Key. TVNZ and TV3 are more interested in pumping resources into ambulance chasing the funeral of a two year old girl who drowned in a drain than investigating the veracity or otherwise of Nick Smith’s claims.

    Several key media organisations – the media organisations that most New Zealanders rely on for information – have either given up reporting anything except infotainment or are shameless cheerleaders of the government.

    • Armchair Critic 1.1

      And the good news is?
      I’ve decided it is time to start taking the message out and criticising the government whenever the opportunity arises. They’ve made so many stuff ups that it is just a matter of picking the right issue for the audience and making simple statements. Not a full-on, boring, political rant about all the bad things NACT have done – just chipping away, one issue at a time, creating doubt, then moving on to more interesting (non-political) subjects.

  2. John Dalley 2

    About now would be a good time for Labour to state publicly that they will do away with private insurers when next in government.

  3. “Here’s what an independent report into ACC by Price Waterhouse Coopers has to say (they’ve removed the report from the ACC website …”

    That is appalling. What sort of 1984 newspeak type of world do we live in? Suppress the proper analysis so that the knee jerk reaction to collective organisations that this Government engages in can continue?

  4. BLiP 4

    Looks like ACC might have pulled your link to that document. Did you keep a copy?

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