LABOUR PARTY ACC POLICY A GIANT LEAP BACKWARDS

A giant leap backwards for workers, employers and the economy."

That was the reaction today from ACC Minister Murray McCully to Labour's ACC policy released today which included buying private insurers out of the new market that began today and expanding the scheme to include illness.

"Who do they think is going to pay for the nationalisation let alone expanding it to include illness?" Mr McCully asked.

"Taxpayers, employers and the economy overall will be meeting the cost which could run into the billions.

"They think that re-introducing lump sums is a vote catcher. Anyone who thinks about that for more than two seconds will work out that that creates a powerful incentive to stay on ACC and flag any thought of rehabilitation. And this from the party that lauds rehabilitation as good for workers.

"Furthermore, in a Coopers and Lybrand report that the Labour party is fond of quoting, it says that we have a relatively cheap scheme compared with overseas because we do not have lump sum payments.

"The system of compensation we have now means that a seriously injured person may receive millions of dollars in support over their lifetime, helping them to make the most of rehabilitation.

"They want to do away with experience rating. What do they think the Accredited Employers Programme, that they say they want to expand, is based on? How do you tell if a workplace is safe or not, and how do you tell if an employer is making an effort to make their workplace safer? By looking at their accident rates. And then you put in an incentive to keep focusing on workplace safety by tying the premium to it.

"We know that financial incentives work. In the AEP, the number of claimants on ACC for more than a year dropped to 7 percent compared with 12.7% across ACC generally - and claims dropped 15%.

"A UMR Insight poll of employers taken in mid-May showed that 53% were taking a fresh look at health and safety in their workplace as a result of the reforms.

"What the Labour party is proposing is expensive and nonsensical and will make losers out of winners of taxpayers, employers and the New Zealand economy," Mr McCully concluded.