National’s ACC policy

National has released its ACC policy. As expected they are supportive of opening the workplace account up to competition.

Now you will hear much misinformaion about what this means. It in no way means employees will have less rights to compensation in case of an accident. All insurers will have to provide the at least the exact same coverage as the ACC does.

What it does is allow employers to choose the best workplace insurer for them. Just as we do not force everyone to use the same car insurer or same contents insurer. Employers will also be able to purchase workplace insurance beyond the minimum requirements – something you can’t do through the ACC.

If an insurer does not have a state monopoly behind it, then it has incentives to work with employers to have safer workplaces. It is a win-win-win. Insurers pay out less money. Employers get cheaper premiums and employees have less accidents.

Labour will argue that OSH regulations provide the incentive to have safe workplaces. This is typical leftish thinking – all stick and no carrot. Now as it happens large employers are able to already get some incentives in terms of the accredited employers scheme which allows self or private insurance. This is about giving all employers that same choice.

National says in their policy:

There is little incentive (in the form of lower levies) for those who adopt good safety practices in the workplace, and there are no penalties for those who disregard good safety practices.

Because there is no choice or competition, there is no real transparency around the
operation of the scheme.

Employers provide the basic minimum cover for staff, as they are obliged to do. A more flexible scheme would encourage employers to buy more than the basic cover.

All good points. Having made those points I am surprised they are not saying they will definitely introduce the much needed competition, but just investigate it. I guess they are keeping options open in case it proves too difficult. At the end of the day they did so in 1998, so I am confident they will do so.

Finally they are also saying they will investigate the merit of introducing an independent disputes tribunal to end ACC’s dual role of judge and jury on disputed claims. I suspect there would be considerable support for that.