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.
We don’t want the lies and deception paving the way for the plunder of NZ to continue. We must fight tooth and nail to BOOT OUT the NATS-RATS.
And that is so true of a lot of government services that have been privatised over the last three decades. Privatisation has just made things far more expensive. Of course, NAct don’t care about the cost to NZers but about the amount of profit that can be withdrawn from the economy for themselves and their rich mates benefit.
More gutting!
!
Help!
Go with the Singapore model. Patients co-pay for medical bills and have ‘medisave’ accounts. The government funds part of it while people can choose private insurers for more expensive treatments. The government pays for basic needs and is used as a safety net for the less well off.
The system works so well as it puts decisions in the hands of patients and doctors rather than of government bureaucrats and insurers. The public hospitals are run by private companies and are the envy of the world. Its the best of both worlds.
“the creation of incentives for responsible behavior and the efficient delivery of services; the discouragement of overconsumption through cost-sharing; the regulation of hospital beds, doctors, and the use of high-cost medical technology; the promotion of personal responsibility; targeted government subsidies; and the injection of competition through a mix of public- and private-sector providers.”
Do all you staunch Labour supporters believe that ACC can carry on forward in its current form?
With lets say the vast majority of house holds trimming their spending, does this not correlate to the government, in that continual & constant spending needs to slow down greatly?
I struggle with the Labour concept that we can keep borrowing more & more. You will all say that National are borrowing 380 MMX per week etc etc, but with what we have seen policy wise from Labour, which is very little, you will not be able to afford what is being proposed and more will need to be borrowed
Edmiston is confirming what we’ve said all along. ACC is incredibly efficient and cheap,
No, he is not. What he is confirming is that ACC is a monopoly provider with all the advantages associated with a monopoly plus the advantage of being underwritten by the taxpayer. He is saying that it will be expensive to set up a competing infrastructure (as it always is with a monopoly). He is saying that insurance companies may think this is not worth the effort given that the effort will be wasted when Labour (eventually) reverses the changes National is making.
No businessman likes to be beholden to political point scoring.
@MacDoctor
Yes he is. There is no way that the private insurance sector can be cheaper or more efficient than a state monopoly as the private insurance sector has a lot of costs that the state monopoly doesn’t have. Such costs as advertising, duplicating bureaucracies and the dead-weight loss of profit.
It’s not political point scoring – it’s a political party doing what’s best for our community rather than what’s best for the capitalists. The two are mutually exclusive after all.
“Do all you staunch Labour supporters believe that ACC can carry on forward in its current form?” – Yes, if Nick Smith stops bleepin with it!
“With lets say the vast majority of house holds trimming their spending, does this not correlate to the government, in that continual & constant spending needs to slow down greatly?” Cough, BMWs, cough.
“I struggle with the Labour concept that we can keep borrowing more & more.” Yeah, I’d struggle swallowing that lie too!
JagMan I like your suggestion to look into that model, it sounds like well worth exploring.
MacDoctor I think he’s saying he’s not really very interested in the Work account. Perhaps Smith has put the wrong account up for grabs or perhaps it’s just the greedy capitalists wanting the cream and leaving the taxpayer to pick up the skim.
I don’t know enough about the issue to judge which it is, but I think it’s one or the other.
Let’s just hope for the sake of the country it’s not both.
Crikey.
Well that’s your opinion.
Perhaps if the tax payers were just completing a fit out for a new building for the insurance companies, had already paid for 2 or 3 cracks at giving them efficient systems over the last decade and there was legislation to guarantee them millions of customers they would be on the same footing ACC currently are.
I’m with MacDoctor on this one. It says nothing of the sort. It simply says the tax payers have already spent the money on the monopoly state provider.
Macdoctor is spouting more nonsense: the employers account is NOT underwritten by the taxpayer.
I think the big insurance companies are indulging in a bit of spin as they would love to cover employers with 250+ employees in low risk businesses. They just dont want all the small companies banging on their door.
@Whafe – the bizarre thing about this privatisation effort is that this is the ONLY ACC account which has millions in reserve! In other words, the employers have already paid for their losses from a lot of future workplace injuries. That money can not be transferred to other ACC accounts – you can’t expect employers to pay for sports or other non-work injuries, for example. So here they are, with millions in reserve, rejoicing in the chance to pay more for less? I don’t think so!
I think everyone is looking at this from only one perspective. Compensation for Work place accidents should be driven from 2 sources. The employee should insure themsleves against accident and the employer should insure themselves against providing a workplace which is unsafe. Remove ACC altogether. People insure their cars and other property. They should take responsibility for themselves and insure their health too. And don’t tell me they can’t afford it. Lets see how many people who say they can’t affford it spend hundreds of dollars on smokes or alcohol a month.
@Mark
That’s more expensive both for the individuals and for the economy due to the extended downtime that results from not having a properly functioning accident compensation system. This is what we had before ACC was brought in and what it was brought in to fix.
macdoctor and whafe
The point is that ACC, as the social contract it was intended to be is working. It is irrelevant if it is a monopoly anymore than it is relevant that teaching or policing is a monopoly.
whafe you are mixing apples and oranges
“I struggle with the Labour concept that we can keep borrowing more & more. You will all say that National are borrowing 380 MMX per week etc etc”
Do you struggle with borrowing for tax cuts, with borrowing more than we need, with no job creation ideas, despite promises, and so on and so forth.
ACC works. It’s not broken, it doesnt need fixing. This push is from the insurance industry who HATE that this entire area is out of their hands. Some things might be better driven by the private sector rather than government, but ACC is NOT one of them.
“The employee should insure themsleves against accident and the employer should insure themselves against providing a workplace which is unsafe”
Hmmm on $13.50 an hour, you think people can afford private health, work and car insurance???
God Mark, that’s the most broad brush rubbish I’ve heard to support abolition of ACC. Get out into the communities and amongst the people you purport to know so well, and you will find hard working people who neither smoke nor drink and still can’t afford all the premiums you want them to pay for. ACC was specifically designed to avoid the kind of society where the rich can afford insurance and the poor suffer, stay out of work longer because they cant afford treatment.
So far not a single pro ACC privatisation pundit on this site has proposed we bring back the right to sue for personal injury by accident. That would complete the pure market model you all claim will serve us so well.