Wider competition for ACC to be considered

The Government is open to wider competition in ACC than just the work account if that is recommended by an expert group considering the issue.

ACT and National this afternoon announced they had reached a deal where the minor party will support a government bill making changes to ACC and in return work would start on opening ACC to competition.

The ACC Stocktake Group, expected to deliver an interim report in February, would be asked to look at the competition issue. Two new members Bryce Wilkinson, a former Treasury policy analyst and Michael Mills, director of consulting firm Martin Jenkins and Associates who has previously done a report on ACC, had been appointed.

ACC Minister Nick Smith said the group would look at introducing competition to the work account, which covers personal injuries in the workplace and is the only profitable account for ACC, but also other areas in which the private and non-government sectors (including iwi) could be involved.

Prime Minister John Key said: "The primary focus they will have will be on competition in the work account."

However, he admitted the group had a wider brief.

"Of course they will look at other aspects of the scheme and how it operates."

Labour leader Phil Goff said any change towards competition in the work account or other areas would not be durable. The work account was opened to competition between 1998 and 2000 until a Labour government re-nationalised it.

"Labour is opposed to privatisation we will fight that tooth and nail and we will reverse it."

He said insurance companies would take the profitable work account and the taxpayer would be lumped with the bills for other accounts.

"It's clear the big winners on this will be the large Australian insurance companies, the losers will be ordinary hard working New Zealanders who will be paying more for their ACC and getting less," Mr Goff said.

"That will be the experience, they are doing this for reasons of blind ideology and to look after their mates."

Mr Key said competition would not go ahead if the group did not recommend it but "I am confident we will get that (positive) response".

Dr Smith said implementing the "anticipated decision" following the group's final report next June to open up the work account to competition would be done as "soon as reasonably practicable" with legislation introduced as soon as possible.

Mr Key expected competition to bring benefits to the financially strapped ACC.

"As a general rule we like competition in the economy, we think it delivers better outcomes and cheaper premiums for New Zealanders."

He said the group would need to consider whether competition would leave the taxpayer with a bigger burden.

"I am confident we can get around that issue and tackle that issue, obviously if we couldn't that would be a real stumbling block."

ACT leader Rodney Hide said there was no intention to allow insurance companies to cherry pick.

"We're not blindly going down that path, we actually want to see the analysis, see that it has merit and if it doesn't have merit we won't be supporting it."

Mr Goff said work by PriceWaterhouseCoopers and Treasury showed little benefit and increased risks in opening the worker's account.

National last week announced changes to ACC, including cutting some entitlements and increasing levies, and needed the support of either ACT or the Maori Party. While the Maori Party agreed to support the first reading, ACT has now committed to pass the bill which gives the Government the numbers it needed.

Maori Party MP Rahui Katene said the party wanted to hear views at the select committee stage. Previously co-leader Tariana Turia has raised concerns about privatising the work account but recently said there could be opportunities for iwi.

Mr Key said today's deal did not cut out the Maori Party.

"We always work in a constructive way with our partners where we can. I think it's far too early to say that they can't get policy gains as we look to rework ACC."