Nick Smith’s argument in favour of privatising the ACC Work account has already been blown out of the water by the private insurance industry themselves, who openly admit that they can’t offer cover as cheaply as ACC can. This from the Dom Post story:
Vero’s executive general manager of new ventures Nigel Edmiston said his company – which is owned by the Australian SunCorp Group – had done some planning on entering the workplace insurance market but that the Government’s proposal “wasn’t particularly attractive”…
Edmiston said that private insurers would not be able to compete with ACC’s pricing and would prefer it was excised completely from the market.
“[ACC] have a huge market share, they have all the infrastructure and systems, they’ve got no set up costs, they don’t pay tax and they don’t pay dividends and they don’t need capital.”
He said at the outset private insurers would need to provide 80 cents in capital expenses for every dollar gained in premiums on such a product.
In other words, Edmiston is confirming what we’ve said all along. ACC is incredibly efficient and cheap, and it ensures that all of the money collected actually goes into helping those with injuries, rather than into the profit lines of the Aussie insurance industry.
The only way the private insurance industry could compete would be if ACC was excluded, in other words, the cheapest provider was arbitarily shut out of the market. How exactly would that be competition?
This all begs the question, however, of just how enduring Nick Smith’s commitment to his current proposal is. If National win the next election, don’t be surprised to see a more radical proposal for ACC reform suddenly emerge as National claims it has won a ‘mandate’ to do whatever it likes in dismantling our world-leading ACC scheme.