Privatising NSW’s workers compensation scheme could boost the state’s economy by more than $3 billion over a decade, according to new research.
Suncorp commissioned PricewaterhouseCoopers (PwC) to examine the economic benefits of opening up some of the state-owned statutory insurance schemes.
By modelling the likely effects of privatisation on WorkCover NSW and SA’s workers compensation and compulsory third party schemes, PwC found evidence for a predicted boost in the economic performances of both states, from both improved capital management and productivity improvements.
Suncorp Commercial Insurance Statutory Portfolio Executive General Manager Chris McHugh says state governments have a significant opportunity.
“It is difficult to justify maintaining state-owned monopolies when the private sector can deliver better outcomes for customers, injured people and the economy,” he says.
“The appropriate role for government in today’s personal injury insurance schemes is to be an independent regulator of the private sector, allowing a competitive market to increase productivity and maximise value for the community.
The report comes on the heels of the Federal Government’s Competition Policy Review, which released a draft report in September.
NIBA, the Insurance Council of Australia and numerous large insurers have all vigorously lobbied the Dr Ian Harper-led Review to address statutory insurance competition.
NIBA’s submission has called for the review’s recommendations to include a national competition policy regime that holds state and territory governments accountable for any restrictions on competition unless they can clearly demonstrate that the costs of competition outweigh the benefits.
“Now is the time to undertake the necessary reviews, and ensure Australia has the benefits of competitive markets across this important area of economic activity,” NIBA states.