$500,000 for ACC stock take or for razor gang - John Millar

Lucy Ratcliffe

Accident compensation expert John Millar fears the $500,000 made available in the Budget today will be used for a razor gang for the ACC.

"I fear this is going to be a slash and burn," says Mr Millar, a Wellington lawyer.

Today ACC minister Nick Smith announced the new funding would go towards a stock take of ACC's levy accounts (work, earner's, motor vehicle and non-earner's).

"It will focus on where products and services are cross-subsidised, where cost shifting occurs, where efficiencies can be made and costs can be contained, how to improve rehabilitation rates, and how ACC compares to other schemes," Dr Smith says in a media statement.

Interesting move

It's an interesting move given last year's PricewaterhouseCoopers report reviewing accident compensation systems worldwide gave New Zealand's ACC the thumbs up, Mr Millar says.

The new work will be commissioned by a steering group that has an independent chair and advisors alongside senior officials from the Department of Labour, the Department of Prime Minister and Cabinet, The Treasury and the ACC.

The work itself will be undertaken by independent external advisors.

The project is due to start in a few weeks, when Cabinet has considered and approved the governance arrangements and the terms of reference with results reported to Dr Smith by the end of the year.

Mr Millar says the outcome of the review will largely depend on who is appointed to undertake it.