1 Apr 2009

ACC appointments not political - Smith

9:07 am on 1 April 2009

ACC Minister Nick Smith has denied Labour Party accusations that the changes he has made to the Accident Compensation Corporation board are politically motivated.

Five of the ACC's eight board members have been replaced.

Dr Smith says the new members were selected for their financial and investment expertise and will work to get on top of escalating costs.

But Labour says the former board members were targeted because of their political leanings, and replaced by people more likely to support privatisation.

Dr Smith says his decisions were not influenced by political affiliations.

He also denies the Government plans to privatise ACC, but says it will look at increasing competition within parts of the scheme.

Dr Smith says ACC will remain a public entity.

Labour's ACC spokesperson, David Parker, says such radical change is unnecessary, arguing that the scheme compares favourably with those overseas.

Former board chairman Ross Wilson had already been removed, and he has been replaced by former Ernst & Young chief executive John Judge.

Mr Judge is to appear before a parliamentary committee on Wednesday.

The new directors are: investment director Rob Campbell, actuarial consultant Murray Hilder, Jane Huria from HSR Governance Ltd and company director John McCliskie. The appointments take effect immediately.

Deputy chairman Peter Neilsen remains in his role, as do directors Phillipa Dunphy and Marie Bismark.

Dr Smith says the changes in the board will help set a new direction for ACC to address the serious deterioration in its financial position.

"The cost issues within ACC have been the main driver around the extent of the financial problems that we have.

"I've got great confidence in John Judge and the reconfigured board to be able to get ACC back on a more secure financial footing."

Mr Parker says the board has been selected because it will not oppose the Government's plans to privatise ACC. He says the sacked board members would have opposed the Government's plans to reduce entitlements and privatise workplace coverage.

He says Dr Smith is playing politics with the board, which is now more likely to support such changes.

But Dr Smith says he focused on selecting people with the right skills to get ACC "ship-shape".