The NZ Government has received backing from its coalition partner the ACT Party and from the Maori Party to open its insurance monopoly the Accident Compensation Corporation (ACC) to competition.

The National Party Government will this week introduce the ACC Reform Bill in Parliament for its first reading. The backing means the bill will be passed through all stages.

Earlier this month the government-owned insurer reported a $NZ4.8 billion ($3.9 billion) loss for 2008/09 on top of a $NZ2.4 billion ($1.9 billion) loss the previous year.

Last week the National Party tried to introduce a bill that proposed increased premiums and reduced entitlements for the ACC. But the ACT Party refused to back it, calling instead for a move to competition.

ACC Minister Nick Smith says this new legislation will see the ACC’s proposed levies reduced by half. National intends to open the ACC work account to competition subject to the results of a report due next year.

Opposition Labour Party Leader Phil Goff says PM John Key has broken an election promise by looking at privatising the whole of the ACC rather than just the work account.

“National has never supported the ACC,” he said. “They’ve been looking for an excuse to turn it over to their business sector mates, but this time they’ve fabricated a crisis at the ACC to do it.”

Richard Wagstaffe, National Secretary of major union the Public Service Association, says the last time the National Party allowed insurers to provide workplace accident compensation, the confusion and delays were so bad patients gave up trying.

“Despite the fact that privatising workplace accident compensation did not work in 1999, the Government is recycling this failed policy,” he said.

Insurance Council of NZ CEO Chris Ryan told insuranceNEWS.com.au while the council supports competition, it will have to see what the details of the new system are before it can comment.