8. Dr JACKIE BLUE (National) Link to this
to the Minister for ACC
What progress has the Government made in improving ACC’s financial performance after the 57 percent increase in claims costs and the 109 percent increase in liabilities between 2004-05 and 2008-09?
Hon Maryan Street
Hon Dr NICK SMITH Link to this
Here is the guilty lady piping up again. The large increases in claim costs and liabilities resulted in ACC making losses of $2.4 billion in 2007-08 and $4.8 billion in 2008-09. But by better managing costs, and with a real focus on the importance of rehabilitation, ACC made a surplus of $2.5 billion in 2009-10, and I am expecting a significant surplus this year. This turn-round is good news for taxpayers and levy payers. We have been able to secure savings of $638 million for Budget 2011 over the next 4 years from lower costs in the non-earners account. I am also hopeful that if we get a good financial result for this year, we can look to see some reduction in levies for next year, which will be great news for households and businesses.
What are the areas in which ACC has made the significant savings in costs, and how do these compare with the claims made by Opposition parties on how the turn-round has been achieved?
Hon Dr NICK SMITH Link to this
Claim costs in the last year are down by $350 million, or 15 percent, from the peak at the change of Government. The biggest share of this is the weekly compensation, which has reduced as a consequence of ACC’s significant improvement in rehabilitation rates. Claims that the savings have come mainly from elective surgery are incorrect, as those costs are down only slightly and make up only 2 percent of the improvement. Claims that the turn-round in ACC has been due to investment ignore the fact that only 10 percent of the record losses in 2008-09 came from investment losses. The primary reason for the turn-round is that ACC is getting people back to work earlier, and I think all New Zealanders should welcome that.