The National Government has announced it intends to open up the Accident Compensation Corporation's workplace account to competition as part of a deal with the ACT Party.
ACT wants the account to be opened up to private insurers and will now vote for the first reading of the Government's Injury Prevention, Rehabilitation and Compensation Amendment Bill in Parliament next week.
The Maori Party earlier this week said it would support the ACC reform bill as far as a select committee hearing.
Prime Minister John Key confirmed on Thursday that all ACC accounts will be considered for competition.
Mr Key says when competition was in place in the 1990s there were real benefits and expects it will deliver cheaper premiums.
"ACC will stay, but effectively it will be in competition with other providers (that) want to offer services that line up with the same conditions that are currently prevalent in the ACC scheme."
The Government says the ACC work account will be opened to competition, subject only to a report on the merits and feasibility of the move.
The report will outline a process to resolve any outstanding issues. It will be prepared by a steering group currently undertaking the stocktake of ACC, chaired by David Caygill, a former ACC chairperson and former member of the Labour Party.
An interim report will be completed by February next year, with a final report due in June.
The Prime Minister rejected a suggestion by the Labour Party that opening ACC up to competition has always been part of the Government's agenda.
Mr Key told Checkpoint a technical advisory group has been looking at how to make ACC financially viable.
He says competition was not part of the group's original mandate, and the decision to include competition as part of its remit was made on Thursday as part of the agreement with ACT.
Hide welcomes competition
ACT Party leader Rodney Hide says opening up the ACC's workplace account to competition will cut costs.
Mr Hide believes all New Zealanders stand to benefit from lower ACC charges and improved quality of service as a result of greater choice and competition.
He says significant changes are needed to sustain ACC and the advisory group conducting the competition review has the option to look beyond just the work account for areas where competition might work.
Mr Hide says his party will support the Government's ACC reform legislation through all its stages.
Labour promises to fight tooth and nail
The Labour Party believes if the Government moves to open up ACC to competition it will wreck the existing scheme.
Labour says the move will result in people paying more to fund the profit margins of private insurers and getting less cover.
Leader Phil Goff says the party would repeal any changes that introduce competition and will fight the ACC reforms "tooth and nail".