25 Oct 2009

Insurance firms seen as only ACC winners - Labour

8:35 am on 25 October 2009

Labour says insurance companies will be the only winners from introducing competition to ACC.

The Government has announced ACC's workplace account will be opened for competition, subject to an advisory report.

The move has the support of the ACT Party, which is adamant that competition is the way to go.

Labour is against competition and vows to eventually reverse any changes.

Party leader Phil Goff says all the evidence suggests big Australian insurance companies will combined make more than 200 million dollars a year.

He told Morning Report that people will pay more and get less.


A previous competitive market lasted only a year in 1999 before the incoming Labour Government closed it. Labour threatens to do the same again.

Mr Goff says the move is a stalking horse for the full privatisation of ACC.

Prime Minister John Key says introducing competition is not a fait accompli, but he is optimistic the advisory group will find in its favour.

A Radio New Zealand political reporter says terms of reference for the review are broad and it could look at competition beyond the work account.

Insurance companies wary

Insurance companies are wary of being burned again in a political war over injury insurance.

Axa New Zealand says the industry would require a guarantee the new market will last long enough to warrant the upfront investment required.

Lessons can be learned

ACC Minister Nick Smith told Morning Report that lessons can be learned from the last brief period of competition.

He said changes would be made only on condition that real benefits would be actually delivered.

Meanwhile, business groups welcomed the announcement. The Northern Employers and Manufacturers Association says employers will welcome lower ACC costs.

Business New Zealand says more choice will mean better service and more competitive pricing.