4 Apr 2024

ACC at 50: A uniquely Kiwi scheme

11:26 am on 4 April 2024
ACC - Accident Compensation Corporation generic image

ACC turns 50 years old this week. Photo: Supplied

ACC turns 50 years old this week - and while some say it is something to celebrate, others are calling for change.

A brief history

In the 1960s, workers' frustration was bubbling over. Measly compensation payments were not enough to make ends meet if they were injured and could not work.

Supreme court judge Sir Owen Woodhouse saw people battling the legal system to prove their injuries were caused by employers' negligence, and chaired a royal commission investigation.

He recommended a radical change - introducing automatic cover for injured people.

In 1973 the original Accident Compensation Act covered work injuries and car accidents, and an amendment the following year made it more comprehensive.

New Zealanders gave up their right to sue for damages, and in return got the no-faults scheme that still stood 50 years on.

Five decades worth celebrating

There had been some huge shifts in that time - for a start, in the volume of claims it dealt with, lawyer and ACC researcher Warren Forster said.

"At the time it started, there was a few hundred civil disputes per year and about 5000 workers' compensation claims," he said. "Over time we've built that up to about 2 million claims per year, which is an incredible increase."

There had also been big changes in what was covered - from job site accidents to sports injuries and sensitive claims, like those who had been abused in care. Only about 1 percent of those with sensitive claims were actually compensated - highlighting some big gaps in the scheme, he said.

"When ACC works, it's one of the best systems in the world, and the fact that it's still operating now after 50 years is really testament to that.

"Whether or not it works in all cases is a completely different question, and there is a large cohort of people who don't get access to justice through the ACC system."

Regardless, the scheme should still be celebrated, said Forster.

"We need to now pause and take a moment to think, 'Wow, this is an incredible system we've set up, but how can we make it work better for all of us?'"

Calls for change

Not everyone had their party hat on. Don Rennie, who was a legal consultant to the original ACC of the 1970s, said the organisation as it stood was "awful... it's terrible."

"It is no better now than any other large insurance company."

While the original ACC was a commission, former Prime Minister Robert Muldoon threw it out in 1982 and created a corporation. With that, he also tossed Sir Owen's guiding principle - to focus on the injured person's needs, said Rennie. That was a big mistake, he said, and ACC had never been the same since.

"Comprehensive entitlement meant everybody was automatically covered by accident compensation. Theoretically, that's what happens now, except if the ACC disagrees, you've got to prove that you are covered by ACC."

The corporation was focused on cash, not those who the system was designed for, Rennie said - and the only way to fix that was to bring back a commission that cared for people.

ACC chief executive Megan Main disagreed.

"While there's been changes over the decades, we're still here for that original purpose, which we sort of describe as people helping people."

Joint head of Managed Isolation and Quarantine Megan Main at a media conference on 4 August 2021.

Megan Main. Photo: RNZ / Samuel Rillstone

Main admitted there was work to be done, with some struggling to navigate the system, and growing numbers of claims putting pressure on those facilitating rehabilitation.

But after 50 years, its mere existence remained its biggest success, she said.

"It's unique in the world. While other countries have got elements of ACC, such as a workers' compensation scheme or a road accident scheme, no country has got our comprehensive, no-fault injury cover."

Meanwhile, Main said she was on board with the government's public service cuts and was looking to slash ACC's operational budget by 6.5 percent, despite being mostly funded by levies, rather than taxes.

The potential cuts would not affect customer-facing staff, and were geared towards reducing duplication and pulling projects that were not absolutely necessary, she said.

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