Full funding for ACC a political swamp that must be drained

A press release from the Council of Trade Unions

The CTU welcomes indications by two political parties that they would abandon "full funding" of ACC claims and return to pay as you go with a substantial reserve, CTU Economist Bill Rosenberg says.
"We would encourage the government to use its current review of ACC funding methods to review full funding", he said.
"Full funding has proven to be a political swamp because the funding target rises and falls by as much as annual levy payments. This is a result of changes in assumptions about discount rates, investment returns, rehabilitation rates and cost inflation. It provides excuses for political swamp dwellers to alternate between cries of 'ACC funding crisis' and 'unaffordable levies' without a real basis for either."
In addition building the reserves required for it has been a major driver of rising levies.
Full funding has no practical purpose for a publicly provided service backed by the government. Unlike the New Zealand Superannuation Fund, it does not provide for future generations. It just covers the highly variable estimates of the cost of current claims.
Even a major event like the Christchurch earthquake "will not have a significant impact on ACC’s overall financial situation" according to ACC's own Statement of Intent, and outstanding claims are estimated at just $52 million compared to the total $2.8 billion claims budgeted for in the year to June 2012 and total assets of $24 billion. A sensible level of reserves would cover such situations.
"ACC's history shows that the biggest risk it has to cover is the political risk of opportunist or hostile politicians undermining its credibility. An adequate level of reserves would insure against that and major disasters. The huge reserves required for full funding are simply a burden on the economy."

http://www.scoop.co.nz/stories/PO1206/S00266/full-funding-for-acc-a-political-swamp-that-must-be-drained.htm

ACC needs to get back on track

A press release from the Council of Trade Unions

The Council of Trade Unions wants ACC to get back on track as a world-leading no fault accident compensation and rehabilitation scheme.
Peter Conway, CTU Secretary, says “ACC is clearly in crisis mode at this time with the Board Chair going, non-replacement of Board members and resignation of the CEO.”
“There is also a considerable backlash against some harsh practices around entitlements and failure to protect confidential information.”
Peter Conway said “this inevitably detracts from much of the good work that ACC does, the huge value we all get from a public scheme, and the work being done by ACC with unions, employers and others on effective health and safety practices and rehabilitation.”
“The policy driven responses by ACC to pressure from the Government towards a private insurance scheme model remain a major concern.”
“We need change at ACC but it should be based on the original Woodhouse principles, and positive engagement with stakeholders.”

http://www.scoop.co.nz/stories/PO1206/S00174/acc-needs-to-get-back-on-track.htm