National and ACT in ACC deal

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National and ACT have struck a deal over ACC reform that will see the Government investigate opening the work account to competition.

A press conference was expected at about 4pm to release details of the deal which clears the way for ACC Minister Nick Smith to introduce his stalled Bill to increase levies and reduce some entitlements.

ACC Minister Nick Smith confirmed the ACC Reform Bill will now be introduced next week.

"I am pleased the Government has secured support for this critical legislation from both the Maori Party and from ACT that will see ACC's proposed levies reduced by half," Dr Smith said.

The Maori Party earlier this week said it would support the Bill as far as a select committee hearing.

"Today the National and ACT Parties reached an agreement that will ensure the Injury Prevention, Rehabilitation, and Compensation Amendment Bill will be passed through all stages," Dr Smith said.

Labour said the deal was inevitable but was not good for taxpayers.

"I think it's clear that both ACT and National have made up their minds that they think parts of ACC should be privatised, notwithstanding the fact that its cheaper than Australian equivalents and notwithstanding it's the best compensation system in the world," Labour's ACC spokesman David Parker said.

"In the end New Zealanders will end up paying more themselves to fund the profit margins of private insurers and getting less cover."

The account was opened to competition between 1998 and 2000 until a Labour government re-nationalised it.

"We've been through this before and it ended in a muddle - people didn't know who was covering them ... the private insurers were a lot tougher when it came to people getting treatment and long term costs were projected to go up."

However, ACT Leader Rodney Hide said greater competition would provide more choice, quality of service and reduce costs.

"People should have a choice of insurance provider for work-related accidents in the same way that they have a choice for their home and car insurance," Mr Hide said.

Dr Smith said National intended to work with ACT to open the ACC work account to competition subject only to the Government receiving a report from the steering group currently considering the stocktake of ACC accounts.

That would set out the merits and feasibility to New Zealand of such a policy, and outlines a process to achieve this policy objective in a way that resolves any significant outstanding issues of such a move.

The ACC Stocktake Group will also explore other areas in which the private and non-government sectors (including Iwi) can be involved in accident management and compensation."

The group will provide an interim report on the competition issue no later than 1 February 2010.

"Subsequent to the Government receiving the report in June 2010, and the anticipated decision to open up the Work Account to competition as soon as reasonably practicable, the government will introduce legislation into Parliament during 2010 to ensure the soonest implementation possible. The government will consult with the ACT party during both the process of making a decision on the ACC Stocktake Group's report, and in the preparation of any subsequent legislation."

The Steering Group is chaired by former Labour minister and former ACC board chairman David Caygill.

- with NZPA

- © Fairfax NZ News