Press Release – ACC Futures Coalition
The Government’s Financial Statements for the six months to the end of December, released earlier this week, show the operating balance has taken a significant hit in part because of a greater than expected fall in valuations of investments held … Media release on behalf of ACC Futures Coalition – 22 February 2012 Will the Government claim that ACC is in crisis now?
The Government’s Financial Statements for the six months to the end of December, released earlier this week, show the operating balance has taken a significant hit in part because of a greater than expected fall in valuations of investments held by ACC, as well as a change in the discount rate used by ACC to calculate its future liabilities. Actuarial losses on ACC’s liability for outstanding claims were $753m higher than forecast. The losses on investment attributable to ACC were $134 million higher than forecast.
“While the figures have improved from the five monthly statement, these are the kind of figures that had the government claiming in 2009 that ‘if ACC was an insurance company, it would be insolvent’,” said ACC Futures Coalition spokesperson Hazel Armstrong. “They are silent now that they cannot blame the previous government, the previous board and its chair, or the alleged generosity of the scheme. They are also silent because there is no financial crisis, any more than there was one in 2009”.
“ACC coverage and entitlements have been rundown over the last three years and yet despite this we still get a situation which on the face of it looks like the scheme is running at a loss. The reality is that ACC is still running a large annual surplus, like they were in 2009, but because they have adopted the private insurance model of working towards full funding, those investment funds will take a hit from time to time, or the discount rate gets changed, and ACC’s books will accordingly look bad,” said Ms. Armstrong. “These are actuarial losses and the scheme is in good financial shape.”
“We also note that the government has recently deferred their decisions on the privatization of the work account. They may well be struggling to get private insurers to compete with the inherently efficient publicly owned and provided ACC. Perhaps it is time that the Government recognized that the scheme is not an insurance company, it is an extension of our social services and should be funded and delivered accordingly,”Ms. Armstrong concluded. ENDS
The ACC Futures Coalition consists of community groups, academics, organisations representing people who need support from ACC, health treatment providers and unions who have come together around the following aim:
To build cross-party support for retaining the status of ACC as a publicly-owned single provider committed to the ‘Woodhouse Principles’, with a view to maintaining and improving the provision of injury prevention, treatment, rehabilitation and ‘no fault’ compensation social insurance system for all New Zealanders.