ACT leader John Banks says pay-as-you-go for ACC may save money now but future generations will have to pick up the tab.
ACC is now a fully funded model whereby the corporation builds up enough cash reserves to cover existing and potential future claims.
Labour is advocating a return to pay as you go, which means ACC only needs enough income to cover a year's worth of claims, plus a little extra for unexpected costs.
The plan would see levies go down by 20% to 25%, Labour says.
However, Mr Banks says claiming the pay as you go model would reduce levies is a false economy.
"The costs remain the same, but its tomorrow's levy payers that are forced to pick up the tab," he says.
The model does not adequately factor in the risk that some people's injuries require lifetime support from ACC, meaning the costs are transferred to future generations of levy payers, Mr Banks says.
"The best strategy is to open up ACC to real competition so customers can punish bad service by voting with their feet."
National is not ruling out abandoning the fully funded model, with ACC Minister Judith Collins saying "no decisions have been made".
This article is tagged with the following keywords. Find out more about MyNBR Tags
- MARKET CLOSE: NZ shares fall as global mood sours further, Air NZ, Sky TV and Xero drop
- Shelly Bay land deal fails to clear vote hurdle
- Milk price rise has economists scratching their heads
- NZ tech stocks brace for a rocky few months
- Spark's Revera wins IRD's data centre contract for business transformation