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ACC sign - Source: ONE News -
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A new report from ACC Futures Coalition slams the government's plans to privatise the work account.
The report's author, economist Peter Harris, said there is little evidence that ACC needs fixing and even less that any of the privatisation proposals will have any benefits.
The government is consulting on extending the coverage of the Accredited Employer Programme (AEP), a time limited, partial self-insurance scheme.
It further plans to open up workplace insurance, which will cover employer obligations for workplace accidents, to competition from October 2012.
The report comes after ACC minister Nick Smith this week announced proposed levy reductions of 17% for employees and 22% for employers from April next year.
Smith said a 15% reduction in ACC's annual claim costs since 2008 and a 20% reduction in the number of people on long-term compensation have contributed to the levy reductions.
He added they would save households $340 million a year and businesses $247 million a year.
But the report said the impending falling levies meant this was the wrong time to try and expand AEP coverage - particularly as enthusiasm was fading for the scheme.
Currently only 136 of the larger employers participate in the AEP, but they cover 15% of the workforce and 23% of leviable earnings.
The report claimed that between 2000 and 2009 AEP employers had better accident records - and therefore lower ACC costs - but that there was no evidence that AEP was the reason for the better performance.
It also found uncertainties surrounding private insurance made it "an even worse option", with questions over how it will operate, how it will be regulated, how residual claims will be funded, as well as how the costs from failed insurers will be covered.
"In short, the proposals are solutions looking for a problem," it stated.
However ACC did note that details have not been completely finalised for the private insurance model, thus it could not complete a full assessment.
