Media Release 14 October 2009

ACC cuts undermine the scheme

The Government’s announcements on ACC undermine key aspects of the scheme and will have a negative impact on vulnerable claimants, says the ACC Futures Coalition.

“The government seems to be intending to reward employers who claim to have a good safety record, but this is a flawed concept that has been tried in the past and failed,” said Hazel Armstrong, ACC Futures Coalition spokesperson.

“The flaw in what Dr Smith appears to be proposing is that some unscrupulous employers will pressure their workers into not reporting injuries to maintain a good safety record,” said Ms Armstrong.

“There’s evidence to shows that this is what happened in the1990s when this approach was last applied.”

“It’s also a simplistic approach that does not work in the case of occupational diseases contracted in the workplace such as asbestosis.”

“When a worker is hurt in the workplace there is usually an incident that can be reported. But if they contract an occupational disease at work this may not show up until long after they’ve left the unsafe workplace.”

“This means the employer who operated the unsafe workplace that caused the illness is not penalised by having their ACC levy increased.”

“This shows that the concept of having lower levies for employers who appear to be running an unsafe workplace is a simplistic approach that is open to manipulation by unscrupulous employers.”

The proposal to remove the requirement for ACC to take into account the amount of money a person used to earn when deciding whether they are capable of returning to work undermines the principle of fair compensation in return for giving up the right to sue.

“A key right under the common law that applied before ACC was that an injured person could seek compensation for loss of income,” said Ms Armstrong.” The Law Society supported this proposal when it was introduced and cutting it means that injured workers are being denied fair compensation.”

“When this is considered alongside the proposal to reduce the current vocational rehabilitation threshold provision (which says claimants must be physically capable of working for 35 hours a week before their entitlement is affected) to 30 hours, the effect will be to push increasing numbers of injured people off ACC and onto benefits. Levy payers might be better off but taxpayers will have to bear the cost,” said Ms. Armstrong.

“Other changes, such as reversing entitlements for those who self-harm and cutting the compensation available to part time and casual workers, target some of the most vulnerable in our society and are punitive in their effect” said Ms. Armstrong.

“All of this is justified in the name of a manufactured financial crisis at ACC,” said Ms. Armstrong. “As was pointed out by Andrew Little in the Dominion Post this morning, the Corporation made a $1 billion operating surplus in the last year but because of the decision to fully fund the scheme the Government is claiming that they are carrying a liability based on excessively conservative assumptions.”

“ The ACC Futures Coalition supports the extension of the target for fully funding the scheme until 2019 but there should be serious consideration of reverting to a pay as you go scheme, which was the basis on which ACC was originally established.”

The ACC Futures Coalition consists of community groups, academics, organisations representing people who need support from ACC, health treatment providers and unions who have come together around the following aim:

To build cross-party support for retaining the status of ACC as a publicly-owned single provider committed to the ‘Woodhouse Principles’, with a view to maintaining and improving the provision of injury prevention, treatment, rehabilitation and ‘no fault’ compensation social insurance system for all New Zealanders.

12:00AM Wednesday, 14 October, 2009