By Ally Mullord
Yesterday’s Government announcement that ACC is soon expected to face private competition has critics concerned, with some saying opening up workplace insurance to private providers could lead to more suffering for victims.
Business New Zealand Economist John Pask joined Firstline this morning to discuss whether or not New Zealanders need to be worried.
He says Business NZ supports the move, which gives employers the ability to choose their insurance provider - ACC or a private company.
"It’s very, very important that we get the best possible scheme for both employers as businesses, and their employees," he says.
Mr Pask thinks the added competition to the workplace insurance market will also be beneficial, as it will make sure ACC is “providing the type of services, the insurance packages and the rehabilitation rates that employers and their employees demand".
He says the average worker shouldn’t be concerned that their cover will be decreased.
"Absolutely not… I think there's been a wee bit of misinformation about this. The minimum standards are actually set out in the accident insurance act, and so that's not going to change at all,” he says.
“Whether you go to a private insurer or are retained by ACC, nothing's going to change in that respect."
If a private insurance company collapses or reneges on cover, New Zealanders can feel secure that they will still be covered.
"In the very remote chance that an insurer collapses, our understanding from the discussion document is that those claims will go back to ACC," Mr Pask says.
The Labour Party says the only way the insurance industry can profit from the move is by reducing entitlements or increasing cost, but Mr Pask disagrees, saying the move may lower premiums.
"Insurers will have strong incentives to ensure rapid rehabilitation in the workplace, they'll have strong incentives through competition to ensure that their premiums reflect risk in the individual workplace… and so it is likely that premiums in a large number of cases will decline."
Watch the video for the full interview
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