Prebble ready to take axe to ACC

By Andrew Laxon

Act wants to abolish the state-funded ACC scheme and make everyone pay for his or her own accident insurance.

The party also plans to make taxpayers, rather than employers, pay up to $200 million a year for ongoing claims from past accidents.

In the past week, Act has also promised to cut taxes by $3.7 billion by 2004, hold Government spending at its present level and spend $130 million more on new prison cells.

Asked yesterday how his party would balance the books, party leader Richard Prebble said the $200 million ACC residual claims levy was already falling quickly as competition was applied to the former state monopoly.

He said it was wrong to make existing employers pay for past accidents in the car industry and freezing industry, which had high ACC claims.

Management of the $3.4 billion "tail" of existing ACC claims should be tendered to private firms to reduce risk to the taxpayer.

The Government should pull out of all accident insurance, providing only "a general safety net for hardship cases," said Mr Prebble.

However, Act would ensure that commitments to those who were already injured were honoured.

Mr Prebble said ACC cover for road accident injuries should be the next candidate for privatisation.

Motorists could be insured against unregistered drivers through a third-party pool arranged between insurance companies.

He said people who became liable for high premiums under a privatised system - such as young sportsmen who drank alcohol and owned their own cars - would be made aware of the costs of their lifestyle.

"I don't see any reason why New Zealanders should be subsidising hard-drinking, rugby-playing 19-year-olds."

The Act leader earlier attacked ACC as a failure, with costs that had "exploded" from 0.8 to 1.8 per cent of the gross domestic product from 1984 to last year.

He said one manufacturing company, Artel Industries, had saved 37 per cent in its premiums by switching to a private insurer.

It planned to share the savings with workers and to create a further 90 to 100 jobs by opening a factory in Palmerston North.