Fighting for Crumbs

Under the urging of ACT, National is looking at reopening the workplace account of ACC to competition. This is unlikely to be a bad thing, despite the dark mutterings of Labour. It was Labour, you will recall, that reversed the previous opening of the workplace account due to an ideologically-based promise from their campaign. At no time did they attempt to assess whether the opening of the account was working. It was “privatisation” and it was bad, even though, as I pointed out in my last post, competition in the workplace account is no more privatisation than I am Venezuelan.

Treasury advice is a little pessimistic about opening the workplace account, but most of it’s pessimism seems to centre on the poor economic conditions and the probability of Labour eventually reversing the policy, both of which make it less attractive to insurers. This is in direct contrast to the received wisdom of Phil Goff who blurts out the standard Labour line:

““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.”

One of them must be wrong, and I’m backing Treasury this time. There was absolutely no evidence that the “Australian” insurance companies were profiteering last time around. At the risk of boring you I draw your attention to my favorite ACC graph:

You will note that ACC expenditure fell briefly after competition was introduced and immediately started rising when it was withdrawn. While this is too short a time and too blunt a statistic to draw any conclusions, it certainly indicates that rises in ACC expenditure and liability did not occur simply because of a bit of competition. But then Phil Goff is a man who can make this statement:

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

And this one:

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

…virtually back to back – without blushing. Amazing. The man must have almost zen-like control over his body. National at least have the grace to say “we’ll take a look at it” and actually look at the evidence, rather than “we’ll introduce competition because politics means never having to say you are sorry…”

I see David Parker also has nothing new to add to the debate except some of Labour’s more erroneous observations on ACC.

““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,” Mr Parker said.”

Actually there are no Australian equivalents. Workman’s comp is certainly more expensive in Australia, but the level and type of benefits are quite different and Australia weights companies rather than entire industries, meaning that many companies with good track records for safety pay much less. Also ACC is a no fault scheme, whereas many of the Australian ones are not. A direct comparison is therefore difficult. Certainly, the last time the workplace account was opened up the premiums offered by the private insurers were substantially lower. Whether this would have persisted is unknown thanks to Labour’s precipitate reversal.

I don’t know how many times I have heard someone blithely tell me that ACC is “the best compensation system in the world” or “the envy of the first world” or some such similar nonsense. I await the news of another country taking up the system. It is not as if the world does not have plenty of New Zealand experience to draw on. ACC has been around for 35 years.

Clearly, the world does not view ACC through the same rose-tinted spectacles as does Labour.

I encounter plenty of people in my practice who do not use those spectacles either. They are the ones who deal with ACC’s long-term compensation case managers. They are the ones that have to fight even for the small amount of compensation they do get. Madeleine at M&M tells her tale of the joys of ACC compensation. Multiply her tale around the country by thousands and you have a picture, not of generous benefits and cheap contributions (the picture labour would like to sell you) but the picture of the desperate and the injured fighting for the crumbs that unassailable, monopolistic ACC distributes. It is not an image of compassion nor of fairness, it is an image of arrogance and the blindness of one-size-fits-nothing-statism.

Frankly, I don’t care if competition makes no difference to the economics of ACC, it should be introduced solely to shake up a state machine that has long forgotten the people it was created for.

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