Gutting ACC – National flies true colours


So National has now openly revealed its plans to privatise ACC – clearly, the Government has been softening the public up for this for a while.

First we saw the deliberate distortion of ACC finances, then we saw National’s handpicked chair talking up ridiculous levy increases and most recently ACC papers were leaked that talked about high excess charges and big cuts to compensation.

Classic National strategy – manufacture a crisis, get someone to say something that is even worse than its proposals and then bring out the cutbacks and pretend they are reasonable.

That said, I think National are going to find it difficult selling the gutting and privatising ACC as reasonable – I hope so anyway!

So what’s wrong with privatising ACC – basically it will drive up costs and cut coverage.

How do we know this? Because NZ compares favourably with overseas models. [PDF]

There is also the academic research showing privatisation will make ACC worse.

As I have previously blogged, even some employers have gone public with their concerns that privatisation will drive up costs and didn’t work when they tried it in the 90s.

ACC is the tip of the iceberg for National’s privatisation agenda – keep your eye out for any more manufactured “crises” that need vicious cutbacks and privatisation to be fixed.

9 Comments Posted

  1. Sir Owen said he saw the scheme as part of the social welfare system, not as an “insurance” scheme

    Absolutely. It doesn’t matter of ACC makes a loss, it’s not really intended to make a profit anyway

  2. We DID have a good NHS – now we’ve got a mess with a dead bird tied round it’s neck. Restore our Health System and keep Foreign Bankmeisters out of our system – any profit won’t stay in NZ. And profit will only come through massive cutbacks. The tip of the First iceberg – what follows will have to be reconstructed itself. It is a Bad Plan – bad for the Economy, bad for the everyday Kiwi, and worse for the Nation’s Health.
    And Rodney’s protesting that it’s not a severe enough rise in Premiums…

  3. Nice strategy – open up the profitable bit for competition and privatise those profits – why not if there is a buck in it?

    Because these profits would otherwise subsidise the costs and risks of insurance. Take away the profits and the costs go up.

    However are there profits and how much? Just because there is a single state insurer running it now, doesn’t necessarily mean that bringing in competition from private firms will deliver a better price and more importantly a better service – unless you exist in the world of an economics text book.

    A key market failure in insurance markets is that private insurers are very keen to insure healthy low risk people. If you get old or have a risky family history they won’t want to know you. The same situation will apply to higer risk occupations.

    But providing a risk spreading service was the point of insurance – and making a reasonable profit – but the market incentive is to maximise the profit and minimise the risk.

    But lets not complicate the issue when we’re making policy based on ideology.

  4. The 350 event at Southland’s Oreti Beach was hugely successful – sun,sandcastles and of course, surf! Plenty of media (no TV however) but plenty of families, celebrities and an MP (not National) along with a good representation of Greens, all in all, good people, good times, good event.
    Our tent stood bravely but eventually succumbed to a huge swell and there was cheering all round. The Times photographer caught the moment of destruction, so I’ll link to it if they print. Did a radio interview as well. Sore arms from all the digging.

  5. Motor cyclists have been so sucked in by National.
    If they must ‘protest’ they should aim their fury at National , not ACC, FFS!
    How easily the National Government manipulates us!
    We need to smarten up!

  6. A case could be made that ACC should be expanded rather than cut back. Why should it matter whether a person loses sight or hearing because of an accident, catching a disease or inheriting a defect? The person didn’t choose to lose their sight or hearing, so why pay medical specialists to determine whether the loss was caused by an accident? Just get on and treat the person or the problem and get them back to work if possible as quickly and therefore as cheaply as possible. The money comes from the savings in benefits. The same applies to other disabilities.


  7. Shunda

    I don’t mind if they fix it. Changing stuff so it doesn’t cost so much is sensible policy if one allows that labour was not sensible and I am happy enough to argue cases and they can be right about it…

    ..but privatization is a form of euthanasia by insurance company. It isn’t a workable method of delivering health insurance to the population of a country and people in a small country is especially vulnerable.

    So what they were supposed to do was cut a variety of benefits back and leave things public so that the spreading of risk that is supposed to be how insurance works, actually has a broad enough base to function.

    I agree. Labour DID hand this to National. It was mishandled by Labour. However, privatization isn’t going to fix it. It’ll just make it harder to fix.


  8. But frog what were they supposed to do? Labour lied about the state on ACC before the election, ACC was already buggered.
    ACC actually is in a shambles, no engineered crisis required, what are the other options?
    I am nervous about this as much as anyone but the status quo was not an option, ACC is broke and getting broker.
    The reason for this was the lolly scramble approach by the left, Labour has handed this to National on a platter so really their screams about fighting this all the way are pathetic, they had 10 years to sort out ACC and they made it worse than ever.

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