Calvert Hilary Jane: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Calvert Hilary Jane: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Volume:673;Page:19329] 
HILARY CALVERT (ACT) 
: 
 There has been a lot of agreement about the Accident Compensation Corporation here this afternoon and I would like to recap that. It has been agreed that there was a loss of $2.4 billion in 2007-08 followed by the Labour Government outdoing itself with a $4.8 billion blowout in 2008-09 and now there is a surplus of $2.5 billion. 
David Shearer 
: That’s remarkable isn’t it? 
HILARY CALVERT 
: That is a remarkable turn-round by this National-led Government. The Opposition has argued constantly—and continues to argue this evening—that there was a never a problem and that things are just fine. Well losing $4.8 billion of New Zealand’s money is not fine. 
Costs and claims have also dropped substantially and there is something else to celebrate here. Labour it seems equates higher claim costs with success. Lower costs come from fewer claims and improved rehabilitation and I am sure employers and employees alike prefer that definition of success. 
Much has been made of the $638 million savings over 4 years to the non-earners account. Those who object would prefer that the Government keeps increasing that account for all eternity. It is simply not sustainable. When faced with a record national deficit the country must spend less not more. We must live within our means not borrow and hope. 
With accident compensation National again with ACT’s help is on the right track. The proposed extension of the Accredited Employers Programme from next April is also to be applauded. Employers do a far better job of managing injury and rehabilitation costs than the State does. The Accredited Employers Programme has so far resulted in 12 percent fewer claims and 15 percent lower costs. Only 136 major employers are part of the programme and it is past time that more were allowed to reap the scheme’s benefits. 
One change that ACT is particularly excited about is the plan to open ACC’s work account to competition. This is an ACT initiative and we are proud of it. It is hardly revolutionary of course. A mix of private and State insurance is the norm in most developed nations. It worked very well when New Zealand last tried it in 1998. Levies went down as did the number of accidents. It was scrapped by Labour not because of poor results but because of poor ideology. 
Choice forces everyone—employers employees and ACC itself—to lift their game. Let us put it this way. If a private insurance company suffered a $4.8 billion loss in 1 year it would be out of business—unless of course the Government added it to its long list of taxpayer-funded bail-outs. 
I will quote my colleague Sir Roger Douglas at this point. In this same debate 2 years ago Sir Roger said the following about ACC: “The real problem with ACC is that it is a monopoly … Monopolies always fail and they fail for one simple reason: they are not required to offer cost-effective and good-quality services to attract customers. Monopolies fail to meet consumer demand because consumers simply have no other choice. Monopolies fail to reduce costs because they have no competition to drive out their high-cost structure. Only competition in this area will make the fundamental changes and restore ACC to some level of reasonable performance.” That statement was correct then it is correct now and it always will be. It holds true whether we are talking about accident compensation or any other part of society. 
It is worth noting that in 2005 under the then leader Don Brash National’s policy was to open to competition all aspects of accident compensation except for the non-earners account. This has always been ACT policy and it remains so. When the Government sees the benefits of competition in the work account we hope it looks to implement National’s 2005 policy.