Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the Government's planned reviews into the ACC

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Jenee Tibshraeny: NZ Herald Wellington business editor on the Government's planned reviews into the ACC · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks B Follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: And the government's announced not just one, but two reviews
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  Speaker 2: into the running of ACC and consultants will look into
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  Speaker 2: ACC's operational performance and its investments.
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  Speaker 3: Now.
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  Speaker 2: Janete Hipshreni is The Herald's Wellington Business editor and joins
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  Speaker 2: me in studio. Hello, Jane good He Andrew, all right,
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  Speaker 2: why is there reason to believe that the Accident Compensation
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  Speaker 2: Corporation's investment decisions are not the right ones?
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  Speaker 3: Well, that is a good question. ACC has actually been
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  Speaker 3: reporting pretty good returns in the past year at its
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  Speaker 3: returns worth seven point twenty six percent. Since nineteen ninety two,
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  Speaker 3: on average, its returns have been just over nine percent,
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  Speaker 3: so it's been beating its benchmark over the years. Those
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  Speaker 3: are pretty good returns. But Commas and Consumer affairsman are
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  Speaker 3: stand also the Minister for ACC, Andrew Bailey, he is
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  Speaker 3: weary of the fact that ACC basically doesn't have enough
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  Speaker 3: money to meet all of its claims liabilities. Now. ACC
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  Speaker 3: is seven billion dollars in deficit at the moment. You know,
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  Speaker 3: that is really big and that is weighing on the
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  Speaker 3: government's books substantively. Listeners might recall that Nicola Willis, the
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  Speaker 3: Finance Minister, was so wary of this that she got
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  Speaker 3: the Treasury to introduce a new way of reporting the
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  Speaker 3: government's surplus or deficit called ober gal X to exclude
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  Speaker 3: ACC because ACC's deficit was weighing so heavily on the
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  Speaker 3: government's books. You know, it makes the government look bad.
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  Speaker 3: So Andrew Bailey is trying to do what he can
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  Speaker 3: to figure out, well, you know, what are the issues
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  Speaker 3: and what can be improved. Now, one of the things
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  Speaker 3: is the investments he wants to He's getting these consultants
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  Speaker 3: and to look to see are they using the right approach,
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  Speaker 3: what's the governance like, so on and so on? Are
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  Speaker 3: they focusing too much on investing in clean things? That
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  Speaker 3: was something he suggested to me. You know, carbon emissions.
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  Speaker 3: Are they too fixated on that? So it'll be interesting
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  Speaker 3: to see what comes of that now, you suggested as well.
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  Speaker 3: The other thing they're looking at is the way ACC operates,
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  Speaker 3: you know, the claims management. Are they letting people stay
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  Speaker 3: in ACC for too long?
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  Speaker 2: Right? Okay? So what are the consultants expected to do?
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  Speaker 3: Well, there's a long list of things they need to do.
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  Speaker 3: Andrew Bailey said that he ultimately, whatever came of this,
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  Speaker 3: he's not going to tell ACC this is how you
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  Speaker 3: need to invest the money. It's fifty billion dollars of money, right,
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  Speaker 3: that's the size of the portfolio. It's a lot of money.
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  Speaker 3: But I guess if there are any constraints he's used
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  Speaker 3: the word constraints preventing ACC from maximizing returns, he wants
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  Speaker 3: to remove those. My opinion is that the bigger issue
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  Speaker 3: here is actually around claims management. It's the fact that
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  Speaker 3: people are staying on ACC for longer, They're taking longer
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  Speaker 3: to get rehabilitated to get back to work. You know,
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  Speaker 3: that might bring up some bigger questions around the health system.
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  Speaker 3: Is it taking people too long to be seen?
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  Speaker 2: And court decisions in seeing that ACC has expanded responsibilities
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  Speaker 2: liabilities totally.
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  Speaker 3: So that is a huge factor. There've been a number
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  Speaker 3: of court rulings, one of which relates to people who
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  Speaker 3: can't work because of injuries suffered when they were children.
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  Speaker 3: This court ruling means that ACC reckons about an additional
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  Speaker 3: one hundred thousand people might become eligible for ACC cover
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  Speaker 3: for compensation due to this court ruling now that should
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  Speaker 3: bring ACC's claims liability up by about three point five
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  Speaker 3: billion dollars. That's just the one court ruling. So so
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  Speaker 3: you know, Andrew Batty said to me that actually looking
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  Speaker 3: at what ACC covers, the scope of its coverage is
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  Speaker 3: not something the reviews are going to cover.
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  Speaker 2: It's a huge, huge story and you're covering it so well.
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  Speaker 2: And I thank you so much, Janatim trying you.
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