-
Related
National leader John Key got a grilling about his plans for Accident Compensation Corporation (ACC).
He is emphatic he has cut no deals with Merrill Lynch on privatising ACC and says the first he heard of a report from the company was on Wednesday morning.
A leaked briefing from Merril Lynch says the National Party is planning to privatise workplace accident insurance if it gets into government. The confidential briefing to Australian investors says there is a strong chance a National government will privatise the $10.3 billion industry.
Key has defended his party and says they have had no dealings with Merril Lynch and doesn't know where they got their information from.
The Council of Trade Unions Vice President Richard Wagstaff said on Wednesday morning that Australian insurers were being advised by brokers to get ready for a multi-billion dollar windfall when National privatises ACC.
"The report's authors said that National was keeping quiet on their plans publicly, but privately they understand National will privatise the scheme," Wagstaff said.
Labour jumped on the report saying National needs to be up front with the public over what it will do with ACC.
"A spokesman for National told the Dominion Post that it would 'have to wait' for its ACC policy but the report shows National has been far more forthcoming to the insurance industry behind closed doors," says Associate Finance Minister Phil Goff.
Labour is also suspicious because Key once worked for that very firm.
"It's quite clear Mr Key's old firm Merrill Lynch sees very good pickings for Aussie insurers out of their old mate getting elected," Clark says.
The leaked report has forced Key to front up and reveal more than he would have liked about his policy.
He says there will be no privatisation of ACC, but it will lose its monopoly if National wins the election.
"ACC will remain but there will be competition and choice," says Key.
He says private insurers won't be able to provide insurance in place of ACC and promises ACC will remain but with competition and choice.
The government says privatising the ACC scheme will rob New Zealanders of the security they have enjoyed in the event of accidents for several decades.
Phil Goff says the Merril Lynch report says that ACC has lower costs than comparable schemes in Australia, and that the "bottom line is that the privatisation of some or all of the ACC market would be of high interest to the insurance industry and ... could prove to be a very positive development for the insurers."
The report certainly does encourage investors to buy, buy, buy shares in big Australian insurance companies who will enter the market in New Zealand if it is opened up.
It sees the potential for some big profits, particularly from the workers' injury account worth $640 million a year in potential premiums. The motor accident account at $590 million and the account for sports or injuries at home worth $905 million. For private insurers that's potential new income of $2.1 billion a year.
