1 00:00:00,040 --> 00:00:03,200 Speaker 1: And the government's announced not just one, but two reviews 2 00:00:03,200 --> 00:00:06,160 Speaker 1: into the running of ACC, and consultants will look into 3 00:00:06,120 --> 00:00:10,440 Speaker 1: the ACC's operational performance and its investments. Now. Jennet Hipshreni 4 00:00:10,600 --> 00:00:14,440 Speaker 1: is The Herald's Wellington Business editor and joins me in studio. Hello, 5 00:00:14,520 --> 00:00:18,400 Speaker 1: Jane good A, Andrew, all right, why is there reason 6 00:00:18,440 --> 00:00:23,080 Speaker 1: to believe that the Accident Compensation Corporation's investment decisions are 7 00:00:23,160 --> 00:00:24,239 Speaker 1: not the right ones? 8 00:00:24,960 --> 00:00:27,880 Speaker 2: Well, that is a good question. ACC has actually been 9 00:00:27,920 --> 00:00:31,600 Speaker 2: reporting pretty good returns in the past year at its 10 00:00:31,680 --> 00:00:35,480 Speaker 2: returns worth seven point twenty six percent. Since nineteen ninety two, 11 00:00:35,800 --> 00:00:38,360 Speaker 2: on average, its returns have been just over nine percent, 12 00:00:38,400 --> 00:00:41,440 Speaker 2: so it's been beating its benchmark over the years. Those 13 00:00:41,440 --> 00:00:44,680 Speaker 2: are pretty good returns. But Commas and Consumer affairsman are 14 00:00:44,680 --> 00:00:48,400 Speaker 2: stand Also the Minister for ACC, Andrew Bailey, he is 15 00:00:48,520 --> 00:00:52,200 Speaker 2: wary of the fact that ACC basically doesn't have enough 16 00:00:52,280 --> 00:00:55,600 Speaker 2: money to meet all of its claims liabilities. Now. ACC 17 00:00:55,800 --> 00:00:59,480 Speaker 2: is seven billion dollars in deficit at the moment. You know, 18 00:00:59,520 --> 00:01:01,640 Speaker 2: that is really big and that is weighing on the 19 00:01:01,640 --> 00:01:06,240 Speaker 2: government's books substantively. Listeners might recall that Nicola Willis, the 20 00:01:06,280 --> 00:01:09,520 Speaker 2: Finance Minister, was so wary of this that she got 21 00:01:09,520 --> 00:01:12,399 Speaker 2: the Treasury to introduce a new way of reporting the 22 00:01:12,400 --> 00:01:16,919 Speaker 2: government's surplus or deficit called ober gal X to exclude 23 00:01:16,959 --> 00:01:20,840 Speaker 2: ACC because ACC's deficit was weighing so heavily on the 24 00:01:20,840 --> 00:01:22,759 Speaker 2: government's books. You know, it makes the government look bad. 25 00:01:23,120 --> 00:01:25,520 Speaker 2: So Andrew Bailey is trying to do what he can 26 00:01:25,640 --> 00:01:28,959 Speaker 2: to figure out, well, you know, what are the issues 27 00:01:29,120 --> 00:01:31,520 Speaker 2: and what can be improved. Now one of the things 28 00:01:31,560 --> 00:01:34,720 Speaker 2: is the investments he wants to He's getting these consultants 29 00:01:34,720 --> 00:01:37,480 Speaker 2: and to look to see are they using the right approach, 30 00:01:37,560 --> 00:01:40,640 Speaker 2: what's the governance like, so on and so on? Are 31 00:01:40,640 --> 00:01:43,680 Speaker 2: they focusing too much on investing in clean things? That 32 00:01:43,760 --> 00:01:47,400 Speaker 2: was something he suggested to me. You know, carbon emissions. 33 00:01:47,400 --> 00:01:50,240 Speaker 2: Are they too fixated on that? So it'll be interesting 34 00:01:50,240 --> 00:01:53,120 Speaker 2: to see what comes of that now, you suggested as well. 35 00:01:53,160 --> 00:01:56,040 Speaker 2: The other thing they're looking at is the way ACC operates, 36 00:01:56,080 --> 00:01:59,240 Speaker 2: you know, the claims management. Are they letting people stay 37 00:01:59,240 --> 00:02:00,840 Speaker 2: in ACC for two long right? 38 00:02:00,920 --> 00:02:03,720 Speaker 1: Okay? So what are the consultants expected to do? 39 00:02:04,600 --> 00:02:07,280 Speaker 2: Well, there's a long list of things they need to do. 40 00:02:08,440 --> 00:02:11,280 Speaker 2: Andrew Bailey said that he ultimately whatever came of this, 41 00:02:11,480 --> 00:02:13,560 Speaker 2: he's not going to tell ACC this is how you 42 00:02:13,600 --> 00:02:17,240 Speaker 2: need to invest the money. It's fifty billion dollars of money, right, 43 00:02:17,280 --> 00:02:19,959 Speaker 2: that's the size of the portfolio. It's a lot of money. 44 00:02:20,680 --> 00:02:23,119 Speaker 2: But I guess if there are any constraints he's used 45 00:02:23,120 --> 00:02:28,200 Speaker 2: the word constraints preventing ACC from maximizing returns, he wants 46 00:02:28,240 --> 00:02:31,600 Speaker 2: to remove those. My opinion is that the bigger issue 47 00:02:31,600 --> 00:02:34,680 Speaker 2: here is actually around claims management. It's the fact that 48 00:02:34,720 --> 00:02:37,720 Speaker 2: people are staying on ACC for longer, they are taking 49 00:02:37,800 --> 00:02:40,840 Speaker 2: longer to get rehabilitated to get back to work. You know, 50 00:02:40,919 --> 00:02:43,919 Speaker 2: that might bring up some bigger questions around the health system. 51 00:02:43,960 --> 00:02:45,600 Speaker 2: Is it taking people too long to be seen? 52 00:02:45,960 --> 00:02:51,600 Speaker 1: And court decisions in seeing that ACC has expanded responsibilities 53 00:02:51,600 --> 00:02:53,440 Speaker 1: and my abilities totally. 54 00:02:53,560 --> 00:02:56,320 Speaker 2: So that is a huge factor. There've been a number 55 00:02:56,320 --> 00:02:59,160 Speaker 2: of court rulings, one of which relates to people who 56 00:02:59,480 --> 00:03:03,120 Speaker 2: can't work because of injuries suffered when they were children. 57 00:03:03,440 --> 00:03:07,200 Speaker 2: This court ruling means that ACC reckons about an additional 58 00:03:07,400 --> 00:03:11,640 Speaker 2: one hundred thousand people might become eligible for ACC cover 59 00:03:11,720 --> 00:03:15,320 Speaker 2: for compensation due to this court ruling. Now, that should 60 00:03:15,360 --> 00:03:20,520 Speaker 2: bring ACC's claims liability up by about three point five 61 00:03:20,600 --> 00:03:24,840 Speaker 2: billion dollars that's just the one court ruling. So so 62 00:03:24,960 --> 00:03:27,280 Speaker 2: you know, Andrew Baty said to me that actually looking 63 00:03:27,320 --> 00:03:30,600 Speaker 2: at what ACC covers, the scope of its coverage is 64 00:03:30,680 --> 00:03:33,639 Speaker 2: not something the reviews are going to cover. 65 00:03:33,919 --> 00:03:36,320 Speaker 1: It's a huge, huge story and you're covering it so well. 66 00:03:36,360 --> 00:03:38,400 Speaker 1: And I thank you so much, Janatim trying you. Thank 67 00:03:38,440 --> 00:03:41,440 Speaker 1: you for more from Hither Duplessy Allen Drive. 68 00:03:41,640 --> 00:03:45,040 Speaker 2: Listen live to news talks it'd be from four pm weekdays, 69 00:03:45,160 --> 00:03:47,360 Speaker 2: or follow the podcast on iHeartRadio.