Improved financial performance does not mean ACC has emerged from its financial troubles, ACC Minister Nick Smith said today.
Treasury reported today as part of the Crown accounts that ACC had returned to positive territory after losing money on its investment and blowing budgets due to higher claims and treatment costs.
Treasury said it had turned around a forecast loss of $87 million to a gain of $255 million in the first seven months of the financial year to December.
"This variance mainly reflects the impact of claims experience due to fewer claims than expected in receipt of weekly compensation," Treasury said.
"There were also decreases in rehabilitation and medical costs."
Recent poor return on investments also continued to turn around with Treasury saying returns were $222 million better than forecast.
Dr Smith said ACC had worked hard in getting cost increases under control to 2 percent in 2009, compared to 15 percent in the previous 15 years.
"It is very encouraging that the hard yards they are doing are starting to show results," Dr Smith said.
The Government recently passed legislation pruning some ACC treatments and coverage.
Asked if the latest information might show the changes were unnecessary, Dr Smith said they were still needed.
"Quite the opposite. The cost growth of 15 percent was unsustainable and got ACC into trouble. There is still a lot of work to be done to maintain cost increases at the rate of inflation."
NZPA