Smith fends off claim Govt breaking ACC vow

ACC Minister Nick Smith has downplayed a claim that the Government is heading towards a broken election promise by considering broad-scale competition within ACC.

Dr Smith said yesterday it was "unlikely" a steering group considering changes to ACC would do serious investigation into opening accounts other than the Work Account to competition from private insurers.

However, he conceded it had licence to do so under new terms of reference it had been given as a result of a deal brokered with the Act Party for National to open the Work Account to competition in return for its support for the Government's present ACC bill.

Under that deal, the ACC steering group will be allowed to look into where competition could be effective across all ACC accounts.

Labour leader Phil Goff said Prime Minister John Key was now breaking his election promise that only the Work Account would be considered for competition.

"This indicates they are going to go much further than they said they were going to.

"We expected that if they were to get a second term, because they always said they would not look at privatisation in this term.

"But this is going well beyond what they said they would do in this term. It's privatisation by another word."

Asked if National was going beyond its election policy, Dr Smith said the new terms of reference would give the steering group licence to make recommendations on competition in ACC's other accounts.

"But it's not the Government's expectations that the insurance function in the other accounts is an area where we are expecting them to do significant work.

"My perspective is it is unlikely that the stocktake will go further around the insurance function, but we are quite open to exploring other ways in which the private sector can help improve performance in those other accounts."

He said the main areas of consideration were in greater use of the private sector in the areas of case management and rehabilitation, rather than actual insurance underwriting.