RNZ reveals ACC privatisation agenda

Written By: - Date published: 9:03 am, April 23rd, 2010 - 71 comments
Categories: ACC, privatisation, same old national - Tags: ,

Last year, Nick Smith argued until he was red in the face that National was not moving to privatise ACC. You and I knew that was bollocks all along. After a year and a half of softening up the public, with Smith telling outright lies about the financial condition of ACC, the privatisation agenda is about to hit full swing.

Radio New Zealand
has got its hands on an interim copy of the Government-appointed ACC stocktake group. When this group was appointed, the Government said it would not be looking at privatisation. Another lie, of course. The members of the group were handpicked by Smith – neoliberal David Caygill, rightwing economist Neil Quigley, private insurance executive Gordon Smith, and Smith’s man in ACC John Judge. They’ve come up with exactly the conclusions they were employed to make.

As many people have been saying all along, National’s hysteria around ACC last year was focused on creating an air of crisis. Now they’re going to ‘do something’ (and be applauded by the kind of idiots who buy spin and see doing anything as a solution). That something is privatisation of ACC.

It won’t work. It has never worked.

The last time National privatised ACC it was a huge failure. Private providers behaved exactly as we would expect a self-interested company to rationally behave – they introduced loss-leading policies to win customers and they sought to pay out as little as possible. When Labour re-nationalised the scheme, things were already starting to go to hell – the courts were being bogged down with ACC cases as insurers, employers, and employees wasted resources on trying to assign blame, the loss-leading phase was ending, and the largest insurer, Aussie-owned HIH, collapsed only months later.

Privatisation will not save money. The costs of injuries will still exist. The question of insurance is who pays them, Privatisation will force more of the cost on to workers. And it will increase costs because private insurers spend a large portion of their outlay on trying to avoid making pay outs. Not to mention those profits, which have to come from somewhere. Last time, small businesses found that privatisation actually cost them money because they were forced to spend time and money choosing a provider (let alone the risk that their provider would collapse or raise its levies).

The PriceWaterhouseCooper report says that privatising ACC will deliver $200 million in profits to the principally Australian-owned private insurers. Why should we take $200 million out of our pockets and give it to foreign insurers?

ACC is very efficient. It made $3 billion in payouts, invested a billion for the future, and managed a portfolio of $14.5 billion at a cost of just $495 million last year. You find a private insurer that pays out 90% of its revenue on claims. It has enough money. Sure, when Smith was in the height of its hysterics, the value of the scheme’s reserves was down below $12 billion, it was the depth of the financial crisis, but since then it has made billions on the rising markets and Smith’s ‘crisis’ has evaporated.

National’s agenda is purely ideological. This is not about what is good for New Zealand it is about a blind view that private is best, whatever the facts say. Labour’s position here is simple – oppose this loud and proud every step of the way, expose National’s deceptions, stand beside the workers, and promise to re-nationalise ACC as soon as they get into power.

[I can’t be bothered linking all the links – go here for more]

71 comments on “RNZ reveals ACC privatisation agenda ”

  1. To all of the wingnuts who think that privatisation will deliver “efficiencies” and “improve services” in the Health sector can I ask them to ponder this:

    1. In the US 15% of GDP is spent on health. This provides a service that is full of holes and does not provide comprehensive cover although Obama’s recent reforms have improved things. It is a good system for lawyers, the insurance companies dispute as many cases as they can.

    2. In NZ under a “Socialist” system we spend 8% of our GDP and get far better service. Even with the decline of ACC under the current system cover is pretty comprehensive and predictable.

    When you think of the difference in GDP the contrast becomes monumental.

    • Marty G 1.1

      and we outscore the US on just about every health metric.

    • ghostwhowalksnz 1.2

      8% on health in NZ ?
      Thats only because certain items are covered under the health budget, such as aged care and disability that are not seen as ‘health’ dollars elsewhere.
      Even here Disability used to be under Social Welfare, until the political fraud under Ruth Richardson moved it into health – to show they were ‘boosting’ the health budget

  2. Jim Nald 2

    I have been chuckling to myself since last year about this … so must be the puppet-masters

    Pick extreme and zany instances
    Manufacture hysteria
    Write the script away from the public purview
    Set up an ‘independent group’
    Dish out the scripted lines
    Publicly present the report to oneself in public view
    Implement

    You might say watta scam and sham? Well, this is a winning formula

  3. tsmithfield 3

    The headline you point to doesn’t say ACC will be privatised. Just that it will be exposed to competition from the private sector.

    If competition from the private sector is such a bad idea then we should close down all other banks and give Kiwibank a monopoly.

    • Bright Red 3.1

      ACC the scheme is currently an entirely publicly-owned scheme run by the ACC corporation. Allowing private comapnies into the scheme is therefore privatising it.

      PWC said private competition would undermine the whole ACC system. Do you know better, ts?

      As for the banks, you won’t find much argument from me. The old saying is socialise the means of production, distribution, and exchange

    • chris 3.2

      if we had a govt. run bank that acted as a utility taking savings and making loans it might make lives easier and lead to a more stable economy. just ask moises naim or steve keen.

    • Craig Glen Eden 3.3

      The Banks example you give ts is ridiculous ts.The only reason the right wing have to privatize any thing is because some believe the private sector can do it better leaner cheap.

      The facts are they don’t in Health, never have done never will do. USA is the prime example thats why millions of Americans cant get health care. Surgeons and Insurance companies rip the patient with no regard what a disgrace.

      • Draco T Bastard 3.3.1

        The only reason the right wing have to privatize any thing is because some believe the private sector can do it better leaner cheap.

        Oh, I’m sure if you dig deep enough you’ll find the real reason – control. The NACTs are a bunch of psychotic dictators and privatisation gives them the control and the income that they think that they deserve.

        • Rex Widerstrom 3.3.1.1

          I’d amend that to read “…most politicians are a bunch of psychotic dictators…”

          It’s not hard to go back through the history of any government (certainly the ones I’ve personally observed, from Muldoon on) and find myriad examples of petty despotism and arrogance.

          The only chance we have of reforming the system is if we can be multipartisan about it, otherwise we’re divided and they (the pollies) conquer.

          There’s plenty in National, for instance, not impressed with national voting down Private Members Bills before they even get to a Select Committee, even DPF, who posted yesterday:

          I’m really pissed off that they made it a party vote. National has had an authoritarian streak to it recently, where they are whittling down the number of issues MPs traditionally are not whipped on.

          There are some issues too important for partisanship. Genuine reform of a system which allows the party or parties in government absolite power to ride roughshod over the people is one of them.

    • Ianmac 3.4

      Yes please TS but leave Kiwibank, PSIS, and that other one to run free!

    • The Chairman 3.5

      The estimates in this paper suggest that the big four banks alone make underlying profits of around $35 billion before tax, of which some $20 billion per annum is likely to reflect the banks’ exploitation of their monopoly over the Australian payments system.

      http://www.apo.org.au/research/licence-print-money-bank-profits-australia

    • Draco T Bastard 3.6

      Yes, we should. They’re costing us $1.02b in dead weight loss every quarter.

    • Ari 3.7

      I have no objection to private competition to ACC, if they have to play by all the rules ACC itself currently does. The problem, of course, is that no insurer would want into a market where they aren’t allowed to reject customers, or hike premiums beyond centrally determined levels.

      The fact is, if we hold the competition to the same high standard as ACC, there is likely to be no competition, and even if there is, it is unlikely to be as efficient as ACC, yet alone gain us performance.

    • zonk 3.8

      “Let’s take ACC. The PriceWaterhouseCoopers report this year found that on virtually every measure it applied, ACC “adds considerable value to New Zealand society and economy and performs very well in comparison to alternative schemes in operation internationally.” It costs us less and delivers more. Depending on how you parse it, “opening ACC up to competition” as National proposes, is either a poor idea or a really rancid one. Seriously — there is simply no rational public interest case for privatising ACC.”

      Russell Brown a wee way back (2008)…seeing the PWC report isn’t on the net anymore
      http://publicaddress.net/default,5486.sm#post5486

      fuck off and go attempt to corner the market in expensive Aids drugs in Africa or something equally dubious…I want my country back

  4. Bill 4

    “The members of the group were handpicked by Smith neoliberal David Caygill…”

    Who apparently told Ross Wilson (from bloody excellent RNZ interview) that he had no evidence to back his opinion that private was better; that he simply believed it to be so.

    Great innit?

    Still think we need a witch hunt to smoke out Randists…wouldn’t allow a pack of paedophiles to run a creche after all…. so why allow Randists who are insanely anti-government to be in government?

    • Pascal's bookie 4.1

      “so why allow Randists who are insanely anti-government to be in government?”

      Zactly. God knows why anyone would for vote for someone who’s platform is that all govt is lies and theft and they’d like a job running it please.

      What the fuck do you expect them to do? They’ve givin ya fair warning.

    • felix 4.2

      Here’s the Ross Wilson interview mentioned by Bill above (direct link to streaming audio).

    • ghostwhowalksnz 4.3

      The evidence is that the places where private workplace insurance exists ( australaia) the % of premiums paid by employers is higher than in NZ.

      How come the workers dont get the right to sue in private schemes like they do in other countries?

      Now that would be a good trade off!!!

  5. Nick C 5

    “ACC looks set to get competition from private insurers”

    Errr, do you not know the difference between competition and privitisation?

    • felix 5.1

      The widely accepted and uncontroversial definition of privatisation is the transfer of assets and/or the provision of services from the state into private hands.

      So yep, I’d say Marty does know the difference and you don’t. Look it up. Edumicate yerself.

    • Bright Red 5.2

      at the moment, the whole industry is public owned. Letting in private insurers is privatising it.

      Just like having mercenaries fight alongside your army is privatising defence even though the army is still fully govt owned..

      i thought you righties were meant to understand stuff like this.

      • Draco T Bastard 5.2.1

        They do but they prefer to use spin whenever possible to misdirect people away from the reality that doesn’t support their position.

      • Rex Widerstrom 5.2.2

        Righties do. They particularly admire the Bill Birch version of it, introduced in 1991, which abolished lump sum payments and established the earners account to shift the burden of non-work injuries from employers to employees. The ones I’ve spoken to, and consulted for, have spoken in universal admiration of that structure, which they see as virtually ideal.

        I first found out about this when I met one politician widely considered to be far right (by Australian standards) who asked in hushed tones “You’re from NZ? Did you ever meet…. Bill Birch?” (trust me, that wasn’t the name I was expecting).

        Many an Australian righty (or at least a fair number, it seems) would love to be able to introduce a Birch model ACC scheme into their state. It’s just that vested interests now make that pretty much impossible.

        They must be looking across the ditch at Key and Co and thinking “WTF?!”.

  6. ghostwhowalksnz 6

    Notice they like competition for the bosses paying the premiums but dont allow ‘competition’ for the workers , by letting them sue for their losses!!

  7. Ianmac 7

    Bill and Felix. Just to agree that Ross Wilson interview “bloody” good!
    Prime point is that Price Waterhouse review in 2008 could find no evidence that there was any better system than ACC in the World. And that point about Caygill that he had no evidence that Private was better. Just a belief. And that Private in Australia delivered badly.
    Bless all who sail in her!

  8. Olwyn 8

    “The only reason the right wing have to privatize any thing is because some believe the private sector can do it better leaner cheap.” From what I have seen so far the only reason the right wing privatise anything is so that their friends can get their hooks into some low-risk or no-risk going concern that is essential to the community, and call that “business” and themselves “businessmen,” without adding anything to the world that was not already in it. Unless you count as a plus the suffering that results from the shareholder being more important to them than the actual service they have bought into.

  9. This privatisation is going to cost more. More than just money. ACC would save more money if the government put some focus into injury prevention. We have some high hospitality rates and work injuries compared to other countries.

  10. tsmithfield 10

    Earlier I said:

    “The headline you point to doesn’t say ACC will be privatised. Just that it will be exposed to competition from the private sector.”

    Bright Red responded by claiming:

    “ACC the scheme is currently an entirely publicly-owned scheme run by the ACC corporation. Allowing private companies into the scheme is therefore privatising it.”

    It seems to me that lefties are so in love with public ownership of everything that they can’t even define “privatise” accurately.

    For Bright Red and the others, here is a little help with defining “privatise”.

    http://www.google.co.nz/search?hl=en&defl=en&q=define:privatize&ei=V-jQS5jGGY20sgO_poiACg&sa=X&oi=glossary_definition&ct=title&ved=0CAYQkAE

    See, heaps of definitions there, all supporting the way I define privatise.

    So, it is a nonsense to claim that ACC is to be privatised according the consensus of definitions above. Exposing it to private competition will only improve the existing organisation. That is what competition does. Think about it. What would the world 100m record be now if there was only ever one sprinter?

    • Draco T Bastard 10.1

      Exposing it to private competition will only improve the existing organisation.

      There’s no evidence of that and there is evidence that it will make the whole system far worse.

      • tsmithfield 10.1.1

        Draco,

        I have to disagree with you.

        Look at the recent Telecom fiasco. Now its competitors are milking this for all that its worth. Telecom have to lift their game or they will lose market share big time. If they were still a monopoly, they would have much less incentive to sort their shit out.

        Why should ACC be any different? I am sure the blow-torch of competition will make them lift their game as well.

        • Draco T Bastard 10.1.1.1

          The Telecom fiasco wouldn’t have happened if it had remained government owned. Simple logistics tells us that the competition is costing us more and more everyday. Which costs more? 1 network or two or more?

          Competition has it’s place but telecommunications and health are two places that competition makes worse as it pushes total cost up due to duplication and brings in misdirected cost cutting which results in an overall decrease in service.

    • Ari 10.2

      Given the ratio of overhead to payouts at every private insurer I’ve seen data for, we would literally have nothing to gain from this. Why would they even want in under a similar regime than we have now?

      The answer is that National would soften the regime to attract private competition, making our health system worse, and less comprehensive.

    • felix 10.3

      ts, if you’re going to link to a list of definitions and claim that they support your contention you really should try reading them.

      They don’t. Even in the one-line summaries on the results page there are several 180 degree contradictions of your assertion. If you click through and read the full texts you’ll find that most of them are saying exactly what BR and myself and others have said: That privatisation refers to the transfer of not only assets but also functions and service provision.

      Would you like me to link to some specific examples or are you happy to, um, actually read your own list? Let me know.

      • tsmithfield 10.3.1

        Sure Felix, and I stand by what I said. Here is one of the definitions from Wiki:

        “Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (government) to the private sector (“business”). In a broader sense, privatization refers to transfer of any government function to the private sector – including governmental functions like revenue collection and law enforcement.”

        The key concept in this very good definition is transfer from to. To the extent that ACC functions have been transfered to a private provider, those functions have been privatised within the private organisation. However, those same functions still performed by ACC are still public as they are performed by the publicly owned organisation. So, ACC itself will not be privatised by the changes. This is where we disagree, as both BR and yourself seem to hold that ACC itself is privatised with the proposed changes, whereas I am arguing that the definition of privatisation does not imply this.

        I would agree that privatisation of ACC itself had occurred if ACC were sold to a private organisation. However, this is not proposed to happen.

        Part of the issue here is ambiguity in what BR actually said:

        “ACC the scheme is currently an entirely publicly-owned scheme run by the ACC corporation. Allowing private companies into the scheme is therefore privatising it”

        When he refers to “privatising it” he does not say whether he is refering to ACC or the scheme.

        • felix 10.3.1.1

          You’re splitting hairs to disagree there ts. ACC only exists to administer the scheme.

          It really doesn’t matter whether BR is refering to the scheme, the organization, or the building it is located in.

          Key said no privatisation whatsoever. Full or partial.

          • tsmithfield 10.3.1.1.1

            The article doesn’t actually help. Referring to privatising “ACC” is technically inaccurate because ACC stands for “Accident Compensation Corporation”; in other words the government entity. If you read the article again, I think you would have to agree that the corporation itself is being referred to. Therefore, both BR and yourself are departing from the thrust of the article by broadening its intention out to include the broader aspect of accident compensation services. The article should have referred to the privatising some accident compensation services or similar, rather than the corporation itself.

            It doesn’t really matter though. Whatever way we look at it, we are still probably going to disagree about the merits of bringing competition into provision of accident compensation services.

            The other point is that Key promised not to sell state assets. To that extent, he is keeping his promise with respect to ACC as the corporation will not be sold.

          • luva 10.3.1.1.2

            Key said no privatisation whatsoever. Full or partial

            citation please Felix

            [lprent: I seem to remember it as being “… in the first term”. So this is probably a good call. ]

            • lprent 10.3.1.1.2.1

              From the granny

              The paper follows a week of negotiations with the Act Party over ACC legislation that would push out the date from which ACC is to be fully funded from 2014 to 2019 and cut some entitlements.

              Act has pushed for National to commit to allowing competition into the work account in return for its support – a policy National had decided not to proceed with until 2011.

              A case of the minuscule tail wagging a rather large dog.

              I’d say that neither National or Key said that exact phrase – they seem to be adverse to the word ‘privatisation’ for some reason (even if every other commentator states it as what it effectively is). It was related to their plans to open up the ACC work account to competition in their policy briefing paper and initial policy, which during the long election campaign, they said they were not going to look at doing until after 2011 election.

              Search works great on this new system, fast as hell.

  11. Name 11

    This illustrates a political divide as fundamental, and irreconcilable, as any difference in religious belief.

    A. I am in an industry with low accident rates that are rarely serious and thus expensive. I don’t drink and drive, and I loath rugby. Why, therefore, should I pay premiums that include cover for miners and fishermen, idiots who get drunk and drive into lamp-posts or idiots who break their necks chasing a testicle-shaped ball around a muddy paddock? If they want the same cover as I they should pay the appropriate premium.

    B. I am a member of a society which includes paper-shufflers, miners and fishermen, people who stupidly get drunk and drive into lamp-posts and people who enjoy a little thuggery over a ball in the mud and who unfortunately sometimes get hurt. By paying a little extra I get cover and so does everyone else, and society is both richer and better.

    Neither A nor B is ‘right’. Whether you believe A or B depends on who you are and the way you were brought up, and discussing it is as useful as arguing the virginity of the Madonna with a Catholic.

    • Ari 11.1

      Except your examples are both wrong because overall we pay less under our system that is apparently for people who get drunk and crash into lamp-posts, so everyone’s premiums are lower. *rolls eyes*

      That’s not even mentioning the savings from avoiding the necessity of litigation that comes with private participation in such a scheme.

      • Rex Widerstrom 11.1.1

        What would be wrong with taking activities with clear and acknowledged risks (playing rugby, skiing etc) and shifting the burden onto those who choose to participate in such activities? After all, there’s a hefty ACC component to vehicle registration which acknowledges that if we choose to use a vehicle we’re placing ourselves (and possibly others) in more danger than if we don’t.

        There’s no litigation necessary, and those who don’t own a vehicle make an overall substantial saving, as they should.

        There’s a second category of risky behaviour that is already litigated anyway. If, for instance, you drive drunk and have an accident you either plead guilty to it or you are found guilty of it. Once your guilt is established beyond reasonable doubt, civil liability (which requires a lesser standard of proof) could easily apply. The same could apply to any illegal activity in which a participant was injured.

        I support ACC, wholly and completely. But let’s not forget what the “A” stands for.

        • QoT 11.1.1.1

          But Rex! If we actually acknowledge that sports carry a risk of injury we’ll just turn into a nation of couchsurfing fatties!!!

          [Not sure how I actually feel on the subject, probably concerned about the danger of allowing governments involving ACT the ability to assess “risky behaviour” – just annoyed by the Obesity Epidemic!!!! moral panic.]

  12. Lew 12

    Well, here’s one topic upon which I can agree entirely with The Standardistas.

    Now seems another good time to link (again) to my original (and still unmet) challenge to those who think this isn’t a trojan horse for privatisation.

    L

    • Ari 12.1

      This is why I say we need to hold any privitisation to the current standards, practices, and doctrines of ACC- that is, they should have their maximum fees and minimum quality set by government, and not be able to turn down anyone who wishes to sign up to their scheme.

      Private competition just doesn’t look attractive under those terms, however- people only support it when it’s a way for them to exclude anyone they can successfully other.

      • Lew 12.1.1

        Precisely, Ari. If the purveyors of private cove are serious about cover being universal, better and cheaper then enforcing those things as a condition of entry should be a cinch. That it’s not tells you almost all you need to know.

        L

  13. Fisiani 13

    Before you know it National will also open the entire health sector up to competition.
    They will probably allow some GP’s to run their own businesses, let physios be private, podiatrists, chiropractors, dentists speech therapists, opticians. Even privately run hospitals for goodness sake. We have to stop such possible outrages. We cannot allow private enterprise. For in health and rehabilitation only a state monopoly possibly knows best and is automatically the cheapest, the best and the most efficient.

    • Pascal's bookie 13.1

      Fisiani, you could always try and respond to Lew’s linked argument.

      Or not.

      (I’m picking ‘not’).

      You too smitty.

      (I’m picking ‘will, but not in any meaningful manner’)

    • dave brown 13.2

      Except it is not competition. The public sector subsidises the private sector to meet the needs of those who can afford private health insurance. As a result the public sector gets starved and the majority suffer reduced health care. There is no market and no competition in any sector of the global economy. Capitalism is based on monopolies or cartels. Never heard of Big Oil, Big Pharma, Riotinto/BHP/Vale? The competion such as it is shifts from the so-called market and becomes a contest between the big powers whose states back their monpolies and bail them out with our money. They in turn speculate on the debts and currencies of vulnerable states, like NZ. Ask John Key.
      The NACTS are only interested in scavenging what public assets they can and opening up the farm and the quarry to big business so they get a kickback. They are parasites and they should be dumped out of office starting with the Supercity coup.

  14. Fisiani 14

    ACC is a Trojan horse for state control and monopoly in health.

    [lprent: I read that, and then I read that again. It still doesn’t make any particular sense. Perhaps you’d better expand your argument beyond a dumbarse slogan. ]

  15. Fisiani 15

    Try
    Lew 3.22
    and PB 3.58
    then reread and if need be read again

    [lprent: Perhaps you should reply to the aforementioned comments rather than just dropping a statement in the main line? Then it might make contextual sense in a subthread. After all that is why this overworked sysop put threaded comments in the system in the first place. /sarcasm ]

    • Pascal's bookie 15.1

      The argument in the link @ Lew 3.22 Fisiani.

      • burt 15.1.1

        Lew

        I think you make a fine argument about the race to bottom. To have good social policy we need to ensure that group has an acceptable standard of health care and rehabilitation, a safety net if you like. How we provide that standard and how we fund it do not need to be one and the same for everyone.

        How we apply user pays is quite perverse really. There are many thing we just accept without too much argument. We accept that different employers have different likelihoods of having work place accidents, we accept different occupations have different risks, we accept different classes of motor vehicles have different risks, we accept that bigger vehicles consume more fuel loading their share of the cost. We also accept that there is a chunk of taxpayers money in there as well. We accept this ‘tax’ is collected at every step in the food chain. We accept that alternate National and Labour govt’s mess with this political football costing us hundreds of millions reorganising it for the sake of ideology.

        The original ACC concept was copied from Bismark’s social policy in the early 1900’s.

        Bismarck’s program centered squarely on insurance programs designed to increase productivity, and focus the political attentions of German workers on supporting the Junker’s government. The program included Health Insurance; Accident Insurance (Workman’s Compensation); Disability Insurance; and an Old-age Retirement Pension, none of which were then currently in existence to any great degree.

        Germany’s workers compensation system has been taken as a model for many nations, I wonder how we would get on if we re-cast from the current German system and dropped our 110 years of unique adaptations which have not been copied by any other countries.

    • Lew 15.2

      So that’s a “no”, then. Fair enough; you don’t seem to be the sort to claim it won’t end up being privatised, so the challenge doesn’t really apply to you, only to those fools who claim as an initial position that “it’s not privatisation” and then “privatisation’s not so bad anyhow” as a fallback. You go straight to the fallback, which is convenient for both of us. Happily, I addressed this last time around. Three things: explain to me how a privatised system will be universal; how it will provide equivalent service; at the same or lower cost.

      Universality is a bottom line: it’s the only way to ensure everyone gets healthcare for accidents when they need it, and the only way to ensure that private providers don’t exploit the cross-subsidisation model and burden the public system with all the uneconomic cases and just skim the cream off the top. It’s the only way to ensure that those who suffer accidents don’t end up bankrupt and begging on the street with festering wounds or chronic disease. Because that’s what you get in otherwise-affluent countries without proper accident insurance: the USA and the Republic of Korea are examples.

      But there’s the rub — if you enforce universality, you deny providers the right to cherry-pick “safe” or desirable clients, which means their liability goes through the roof. There are two ways of mitigating this: limit cover or increase prices. If they do the former, people end up in the same case as above because whatever happened to them wasn’t covered. If they do the latter, it prices people out of the market, with the same ultimate effect. So for the system to have all three of those characteristics, you need to enforce them all.

      If the insurers are required to provide cover for all comers, and can’t limit the level of that cover or charge excessive premiums for that cover, they will struggle to make their actuarial models work, since those models rely on being able to price risk out of the market, or deny cover to revenue-negative clients (whom they will be forced to cover under a universal system). So the only way it works is if you enforce all three of those qualifications. But if you do that, there’s no business model. So how is it supposed to work?

      I honestly, truly want to know. But I want to know in some detail — not interested in “the market will provide” dogma. So, if you can — answer! How do you get all three of those things? Provide a compelling answer and I suspect you’ll convert a few people.

      L

  16. burt 16

    This is all a bit depressing really. Having spent thousands on my mountain bike and all the gear I need to ride it I’m now likely to need to actually take some financial responsibility for the risks I take. Not having the hard working folk from the chess club or the bridge club subsidise the cost of my ocassional injuries just isn’t fair. Why should I take responsibility for the risks I take ? Booo National – the bastards are going to make me stump up to cover some of the risks I enjoy taking…

    Booo… I’ll be in tears wanting back the one size fits all system where other people cover my risk for me because I can’t afford to cover my risk having spent all my money on the kit I use in my high risk pass times.

    • Descendant Of Smith 16.1

      In all insurance people cover others people’s risk. That’s how insurance works. That doesn’t matter whether it’s private or public. I’m not sure how you don’t understand that.

      If you solely had to cover your own risk there would be no point in insurance at all. It’s also worth pointing out that you do take some of the risk – 20% in relation to your earnings.

      It’s also not just about risk of injury or accident – you may have a lower accident rate but you might as an employer pay your staff a higher salary than other higher risk occupations. You should therefore in the type of model you seem to favour – unshared risk, pay higher premiums cause the potential liability is much higher. Just like the insurance on a $120,000 house is less than insurance on a million dollar house.

      To only consider the injury rate side is nonsense.

      The reason the risk is shared is because we as a NZ society have deemed that it is the most fair and reasonable way to treat people – sharing the risk and sharing the burden. Most of us aren’t selfish enough to begrudge that – though we all share a common concern that people don’t rip it off.

      As someone who has had experience of a private insurer last time when my wife had suffered a preventable work related injury we had the following issues:

      1. Efforts to deny rehabilitation because working part-time was a lifestyle choice. My wife worked part-time because we had children with disabilities that needed caring for including through periods of intensive care and hospitilisation.
      2. Over that hurdle they argued they didn’t have to rehabilitate to any capacity beyond 8 hours per week because she was working part-time when she had the accident.
      3. The small payments she was entitled to ( less than $40-00 per week ) were usually late and often a month late while they sat in their bank accounts earning interest
      4. This was true of the small quarterly payments for permanent disability which were up to 3 months late. These payments we found out later were also supposed to increase annually in line with inflation. Th employer was paying the increase we found out later but this wasn’t being passed on. Once the file was paid to ACC the taxpayer had to front up with the arrears because the firm was no longer doing this work.
      5. The specialist who carried out the assessment for return to work when we were asking for rehabilitation assessed her range of movement as normal even though a bone fusion to her limb restricted her movement permanently, disregarded any issues of ongoing pain, ignored three previous assessments of range of movement that had assessed her as having a permanent disability and told her that if she was his patient he wouldn’t advise that she go back to work but that he was not there for that reason and would be recommending that she return to work – which he duly did.
      6. The work trial that we desired and agreed to ( despite working up to full time for an employer for only $40-00 per week ) to see what she was capable of was supposed to step up her hours and have an OT assessment carried out as the weeks went on so as to not do further injury. She turned up on the day and the employer had been told that she was coming to start full-time work and they knew nothing about a trial or any sort of OT assessing of either her or the workplace.
      7. Information was posted to us that not only included my wife’s information but information on other people’s wages, injuries and treatments – including sadly people we personally knew and had no idea about their mental health issues.

      That’s a short list of crappy service and an unwillingness to take seriously any effort to get someone rehabilitated, in any meaningful way, who wanted to get back into work.

      ACC on the other hand once the file went to them after this failed experiment were positive and helpful and paid every payment on time.

      I certainly know who provided the better more efficient service and it wasn’t private enterprise.

    • burt 16.2

      Of course insurance is about spreading risk, but unless I missed something the premiums that you pay are adjusted to cater for individual circumstances. But hey you might think it is unfair, for example, that smokers pay higher life insurance premiums than non-smokers..

      I have no issues with having insurance premiums adjusted to match the relative risk because I live in the real world and don’t think the ease of administration should be the primary driver for social policy or that policies should be first and foremost popular with voters.

      • Draco T Bastard 16.2.1

        burt, you missed a hell of a lot. All indications are that you missed most of the 1980s, the 1990s and all of this century. All the stuff that proved that private enterprise isn’t manna from heaven and in fact cost us a hell of a lot more than it should have.

      • Ari 16.2.2

        ACC already does this to an extent by levying dangerous activities. (like licensing vehicles) There’s an argument that there should be more levies, but I would have figured you would be against that as it’s effectively a targeted tax increase. (Which if you think about it, is actually a fairer way of managing risk than demographics)

        I have to disagree with you on policies being first and foremost popular. I think they should be good, (ie. functional) THEN be popular. 🙂

  17. Descendant Of Smith 17

    Didn’t say administration is the the primary driver but the argument here isn’t about how you spread the cost.

    It’s about whether private enterprise is more efficient and provides a better level of service through competition.

    On all those counts they failed and caused much time wasting and distress to someone who wanted to get back to work.

    I also think there is a world of difference between paying out when someone dies, or when your house burns down than there is about helping someone get back on their feet after an accident.

  18. zonk 18

    we spent the best part of two decades getting the loonies away from the wheel of the ship. how did they get back again?

    • Draco T Bastard 18.1

      they convinced people that we needed a “change”. They just didn’t say what the change would be.

      • QoT 18.1.1

        Well, Draco, they promised it wouldn’t really be much of a change, you’d just getting That Nice Mr Key smiling and waving on the telly instead of mean old Helen who wants to tell you you can’t use your cellphone while driving. [Wait, no, oh sh-]

        Captcha: “ordering”.

        • Pascal's bookie 18.1.1.1

          I’m not sweatin it. I’m pretty sure there is basically some 4chan shit going on.

          budget will read.

          ‘Successful troll is successful’

          and it all be revealed as some crazy lulz.

  19. feijoa 19

    Regarding ACC privatisation, does anyone know how much money the Insurance Council donated to the National Party? The Hollow Men suggests $1 million, but could not confirm it. THAT’S why ACC is being privatised.

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