Sunday, March 15, 2009

Foxes in "not trustworthy to guard henhouse" shock!

Further to my post about duplicity and incompetence in the govt, Rod Oram's thoughtfully packaged up into one article the various reasons why National's scaremongering over ACC is down to either duplicity or incompetence (or "panicking or politicking," as he puts it). It's well worth a read, and yes, the suspicions it invites re National's lack of interest in the public good are well justified.

Adolf points out in a post below that National aren't planning to privatise ACC, merely have it "opened up to the discipline of genuine competition," which is true enough - obviously you can't privatise it because there's no conceivable way to make a profit from the unfunded part. Open slather for the rest of it, though.

The left are rightly suspicious of this blather about opening ACC to the discipline of competition, because its potential competitors seem to be less efficient than ACC. Oram's figures show employer costs of ACC at $0.94 per $100 of payroll in NZ compared to an average of $1.73 in Aus (at time of measurement), and ACC's admin costs at 20% of funding compared to 25% in Aus. No point in looking to those guys to teach ACC anything about efficiency, then.

So what is it all about? Why try and talk ACC down? The bottom line is, National is the party of the employers and represents their interests. And for all that they're less efficient than ACC, Aussie insurance companies can still undercut ACC pretty easily on price, which is what matters to the employer. How can a less-efficient private sector company undercut ACC on price, you ask? Simple enough: provide poorer coverage and avoid paying out whenever the fine print allows, which will be very often if your lawyers are worth what you pay them. That's certainly how it worked last time National was in power. My employer back in 1999 opted for private insurance cover because it was cheaper than ACC. Those reduced costs came at the expense of our coverage for workplace accidents, but there was no particular reason for the employer to give a shit either way about that.

That's what it's all about for John Key in this, and don't forget it. I'm picking duplicity over incompetence on this one.


Adolf Fiinkensein said...

Milt, are you mad?

"National is the party of the employers and represents their interests."

Do you seriously believe (Are you one of McCarten's few?) that 70% of the population are employers?

As for Rod Oram - he's the most unrelenting socialist propagandist I've ever read. A right pommy twit.

At least you do have the good grace to admist all the leftist sqraling about 'privatisation' is bullshit. When are you going to admit the rest of their ravings are no better?

Come on man. Join the seventy percent who know a good thing when they see it.

Barnsley Bill said...

PM, I normally throw myself in front of a fusillade of bullets defending you when you post something that is perhaps not orthodox right wing.
On this occasion I am on the other side of the shotgun.
ACC is an inefficient monolith that has become more about being a social service than an insurance company.
Those bloody TV ads that we have had rammed down our throats for the last few years are just the tip of the iceberg when it comes to detailing the waste and inefficiencies within this monster.
As a self employed person who has had on occasion more than 100 staff to administer I can tell you that it is about time they took their fucking hands out of our pockets.
And Rod Oram can line up next to the pricks who run ACC to suck my hairy arse as well

Psycho Milt said...

Do you seriously believe ... that 70% of the population are employers?

I believe that National's as crappy at representing employers' interests as Labour is at representing the interests of labour - but that doesn't alter the basic setup.

As for Rod Oram - he's the most unrelenting socialist propagandist I've ever read. A right pommy twit.

Are his numbers wrong?

Come on man. Join the seventy percent who know a good thing when they see it.

I'm the first to admit that National under Key is the least crap it's been for a long time. Overall I think he's doing a good job - but then, overall I thought Helen Clark did a good job too, so what would I know?

BB: you must be well grumpy with National then, cos their official view is that they've no plans to get rid of ACC...

Clunking Fist said...

"As for Rod Oram - he's the most unrelenting socialist propagandist I've ever read."

Hear, hear.

"From 1997 - 2000 Rod was Editor, Business Herald, Auckland...Under his editorship the BH was at the forefront of the economic debate and a champion of NZ's high technology future." Shame that a gummint "wising" for a hitech future doesn't make it materialise. he always came across as a Helen fan whenever I heard him speak. I now seriously consider NOT accepting invites to functions at which he is a speaker. I wouldn't be surprised if he has received a Common Purpose indoctrination.

Clunking Fist said...


erikter said...

Thoroguhly and Oram are too much for me in a sentence.

This fool Oram is an unreserved supported of Helen Clark and Labour and his credibility is nil. The pompous Pom should be sent back to the UK.

Anonymous said...

Are his numbers wrong?

No PM they are correct.


Psycho Milt said...

ACC has to pay $22 Billion? Yeah, that really would be a bad news story. Of course, they don't have to pay $22 Billion so the story doesn't amount to much.

PaulL said...

PM: it is about the pendulum. Yes, if private employers offered all the coverage that ACC did, they probably would have difficulty in meeting the price.

But, ACC is inefficient enough that a private insurer's profit margin could come out of efficiency.

And the coverage they offer in some areas is sufficiently ludicrous that reducing it would give employers lower premiums.

You're talking like any reduction in coverage is automatically bad. But free physio, as an example, is coverage that nobody really needs. Letting people stay on ACC for years is coverage that we don't need - it is bad for those people. Once you accept that more coverage isn't necessarily always better, it makes more sense.

Put it another way. When you go and get car insurance, do you always take the most comprehensive coverage with every possible option, even those options that you don't need? Or do you pick the option that gives you good solid coverage, with a reasonable excess and no claims bonus?

I have private health insurance, and I can tell you that I didn't pick the rolls royce option - it was too expensive and I didn't need some of those things. Why should my employer have to pay for Rolls Royce coverage? If I was buying it (and, ultimately, since it is part of the cost of employing me, I am paying for it) I wouldn't pick that option.

pidge said...

ACC is already partly open to competition - when Helen removed the competition, she didn't manage to remove it all...

See the ACC Partnership Programme -

More than 150 of New Zealand’s largest public and private sector organisations participate in the ACC Partnership Programme, which encourages employers to take responsibility and self-management for their own:
- Workplace health and safety
- Injury management, including rehabilitation
- Claims management of employees’ work injuries

Anonymous said...

Fuck competition. The point is to close down ACC - all except for the prohibition on pointless tort lawsuits.

That's the endgame. Would somone please explain why employers should be levied - or forced to take out "competitive" insurance - to cover their worker's mistakes?

We don't need worker's compensation: we need worker's responsibility.

Barnsley Bill said...

anonymong......... you are in a party of one in calling for a complete removal of ACC/ insurance.
Opening it to competition will drive efficiencies in service ands should see a reduction in cost for the end user.. i.e me in case I break a leg and you in case you suddenly start using your brain and injure it.
Why do these idiot lefties keep trying to ruin posts by playing devils advotwat?

Psycho Milt said...

PaulL: if National were simply talking about tidying things up, eg derailing the physios' gravy train, I wouldn't have a problem. Instead, they're deliberately and dishonestly talking ACC as a whole down.

Alan said...

ACC is a socialist trough, it has
become a cash cow.It echoes what is
fundamentally wrong with
society, no self responsibility. It is an extension of the welfare
state. Rod Oram is a 'dicky licker'
from way back.

Anonymous said...

Having worked with ACC senior managers and advisers I can safely say ACC is way out of control. They are playing with government (ie. taxpayers) liabilities in a way that is scary. We need to privatise as much of ACC as possible. The benefits are - in order of priority:
- Better service and outcomes for workers (Fact: The semi privatisation of ACC in 1999 allowed workers to receive rehabilitation faster than under ACC)
- It is cheaper (Fact: The ongoing out of work payments are the most expensive part of ACC. Privatised Workers Compensation meant workers received rehabilitation earlier than the state allowed, they recovered faster and felt better - and returned to work earlier where they were productive members of society with all the personal and social benefits that provided).
- Privatised cover is more flexible and allows individuals, particularly the self employed, to purchase the cover they need. note 'need' which is unavailable under ACC!

PM you, like all the other lefty commentators, have confused the benefits of the no fault underlying legislation with the funding provision. There is absolutely no doubt that ACC as a monolithic nightmare needs to go for the benefit of both workers and the economy. But it doesn't mean we need to do away with the no fault system we currently have.

One area that ACC is definitely falling down on, that most don't realise, is that although we don't have the right to sue, ACC does have the right to recover costs where someone is at fault. ACC need to be reminded of their duties as this would also produce the responsible society we all want.

Any comparison with Australian Workers Compensation is sadly flawed as the system, regulation and litigous environment are quite simply very different. Might as well compare night with day. And again the point needs to be made, those that do this comparison are confusing privatising funding with the underlying right to sue legislation.

As a last word, anyone who reads the RodnOramus and thinks he talks sense needs their head read.


PaulL said...

PM: you sound like you're reacting to a straw man. National aren't talking ACC down, they're reading from the audit report that PWC completed. They aren't privatising it, they're considering opening one of the accounts to competition.

They were pretty clear when interviewed (I think it was Nick Smith) that the problems in ACC meant that opening to competition, which was an election policy, would probably be delayed. So they aren't using this as an excuse for anything, and you're running with a Labour party straw man.

Mark said...

You get better coverage and entitlement under the Oz scheme.

The question should be whether accident rates are trending down in other countries, compared to NZ.

Anonymous said...

You get better coverage and entitlement under the Oz scheme.

precisely. and it is far cheaper too!

The question should be whether accident rates are trending down in other countries, compared to NZ.

well most other countries do far better than NZ here. But, really, why should this be a criterion?
Workers accidents are their own responsibility.
The primary criterion should be the costs of the scheme imposed on employers; then the costs of the scheme imposed e.g. via license levies; then the costs imposed by vexations lawsuits; finally competitive personal insurance must be encouraged, but not mandatory.

Abolishing ACC - while retaining the no-fault principle that forbids lawsuits - meets all these criteria. No enforced taxes or levies are required because there is no mandatory insurance and no socialist payouts - however vexatious lawsuits, especially from employees to employers, are explicitly prevented. But, even under such a no-fault regime, people can chose to pay for insurance, and their premiums will reflect their risks and the sum (or income) insured.

Anti-Anonymous said...

“Abolishing ACC - while retaining the no-fault principle that forbids lawsuits”

Ok Anonymous who seems to believe in self responsibility except for employers who should have no responsibility for anything. This is an actual case.

Builder is employed to work on a building site. It’s a multi level (two store) site and is working on the roof. Being a responsible conscious worker he has his safety harness on and is using the scaffolding put up by the employer himself. He falls from the roof. His safety harness breaks [the employer had supplied cheap second hand faulty safety equipment] crashed through the scaffolding which breaks as again the employer had used dodgy materials and not put up properly.

The builder is covered under acc for his broken back. Under your system who should pay? I know who I think should pay, but your system won’t allow it.