CTU rips Nats’ ACC policy

Written By: - Date published: 2:07 pm, July 17th, 2008 - 50 comments
Categories: national, workers' rights - Tags:

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.

50 comments on “CTU rips Nats’ ACC policy ”

  • Comments are now closed

  1. Robinsod 1
    17 July 2008 at 2:13 pm

    Is that what is known as a “fisking”?

  2. Steve Pierson 2
    17 July 2008 at 2:19 pm

    I thought that’s what the security guards to do you at airports if you have a beard or an accent.

  3. Robinsod 3
    17 July 2008 at 2:26 pm

    Tell me about it…

  4. Snelly Boy 4
    17 July 2008 at 2:32 pm

    Bravo to the CTU. First rational response to the National policy statement I’ve read.

  5. Steve Pierson 5
    17 July 2008 at 2:35 pm

    Excluding your hosts, clearly. 😉

  6. insider 6
    17 July 2008 at 2:51 pm

    Same thing Steve surely? 😛

  7. Snelly Boy 7
    17 July 2008 at 2:53 pm

    Some hosts more than others.

  8. Dan 8
    17 July 2008 at 3:38 pm

    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.

  9. dave 9
    17 July 2008 at 3:39 pm

    Wonder how much money the CTU could lose if ACC is privatised.

  10. Robinsod 10
    17 July 2008 at 3:54 pm

    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]

  11. Snelly Boy 11
    17 July 2008 at 3:59 pm

    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!

  12. dave 12
    17 July 2008 at 4:07 pm

    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.

  13. Janet 13
    17 July 2008 at 4:11 pm

    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.

  14. Robinsod 14
    17 July 2008 at 4:13 pm

    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…

  15. dave 15
    17 July 2008 at 4:17 pm

    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.

  16. mondograss 16
    17 July 2008 at 4:19 pm

    Kiwibank has a fully owned subsidiary called Kiwi Insurance, it does life insurance.

  17. Robinsod 17
    17 July 2008 at 4:23 pm

    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.

  18. Steve Pierson 18
    17 July 2008 at 4:30 pm

    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.

  19. Janet 19
    17 July 2008 at 4:35 pm

    What about car, home and contents insurance? That’s what I’m after.

  20. mondograss 20
    17 July 2008 at 4:39 pm

    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.

  21. Jon 21
    17 July 2008 at 4:58 pm

    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.

  22. higherstandard 22
    17 July 2008 at 5:21 pm

    Jon do you have any links for the information you’ve posted on above, I be interested to have a look for myself.

  23. Matthew Pilott 23
    17 July 2008 at 5:43 pm

    higherstandard, you spoke like a pirate. Full credit.

    Arr, ye got the wrong day though…

  24. Matthew Pilott 24
    17 July 2008 at 5:49 pm

    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…!)

  25. Jon 25
    17 July 2008 at 5:55 pm

    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.

  26. Swampy 26
    17 July 2008 at 6:33 pm

    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?

  27. Janet 27
    17 July 2008 at 8:03 pm

    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).

  28. Brett Dale 28
    17 July 2008 at 8:42 pm

    So a group of ex communist party members are against Key, surprise surprise, whats next, those wackos at peace action New Zealand?

  29. gobsmacked 29
    17 July 2008 at 8:48 pm

    Name the ex Communist party members.

    Go on.

  30. gobsmacked 30
    17 July 2008 at 10:00 pm

    Hello? Hello?

    Come on Brett, your hero Joe McCarthy didn’t give up this easily.

  31. Brett Dale 31
    17 July 2008 at 10:45 pm

    I wonder what Aunty Helen’s right side Lady, Marion Hobbs, thinks of this thread.

  32. gobsmacked 32
    17 July 2008 at 11:02 pm

    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.”

  33. Swampy 33
    17 July 2008 at 11:54 pm

    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.

  34. Swampy 34
    17 July 2008 at 11:56 pm

    “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.]

  35. gobsmacked 35
    18 July 2008 at 12:01 am

    Swampy – were they the authors of this report on National’s ACC policy?

  36. killinginthenameof 36
    18 July 2008 at 12:12 am

    “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.

  37. killinginthenameof 37
    18 July 2008 at 12:17 am

    “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)

  38. sean 38
    18 July 2008 at 7:58 am

    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.

  39. Robinsod 39
    18 July 2008 at 8:18 am

    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…

  40. Rob 40
    18 July 2008 at 8:56 am

    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.

  41. lprent 41
    18 July 2008 at 9:05 am

    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.

  42. Rob 42
    18 July 2008 at 9:16 am

    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

  43. lprent 43
    18 July 2008 at 9:24 am

    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

  44. higherstandard 44
    18 July 2008 at 9:42 am

    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

  45. Tim 45
    18 July 2008 at 10:20 am

    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.

  46. IrishBill 46
    18 July 2008 at 10:37 am

    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).

  47. Swampy 47
    19 July 2008 at 2:37 am

    “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.

  48. ACCSUX 48
    6 August 2008 at 5:49 am

    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…

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