The Accident Compensation Corporation (ACC) is set to make a surplus this year, mainly because of higher returns on its investments.
ACC Minister Nick Smith praised the corporation's performance on Thursday after appearing before the transport and industrial relations select committee to discuss its Budget appropriation.
Dr Smith said he had been encouraged by the changes made at ACC since the Government said it was unhappy with the increase in its costs.
It would make about $1.5 billion from its investments this year, he said, and the total surplus would be about $2 billion because of a drop in the cost of claims, better rehabilitation rates and cuts to administration costs.
The minister said that if the current outlook was maintained, ACC would be able to meet its legal obligation for fully funding claims by 2019.
In that case, why privatise? - Labour
The Labour Party, for its part, says the improvement in ACC's situation undermines the Government's argument that parts of it should be privatised.
But Dr Smith says any proposals from a final stocktake report, which is due soon, will be robustly tested over the next couple of months.