Why ACC Levy increases are, frankly, a crock of shit

1. Email from Jim Anderton

Thank you for your message regarding the proposal to increase the ACC levy payable by owners of motor bikes, in some cases by several hundred per cent.

I am opposed to this for two principal reasons:

The first is that it is not necessary. The ACC fund is not in a financial crisis as the current National led government claims. The scheme as originally constituted was a ‘pay as you go’ scheme i.e. the levies received in any one year meet the requirements for payments in that year. In fact the recent history of the scheme has been that the income more than meets the payment requirements. The same applies to, for example, national superannuation. In that case the identification of the effect of the ‘baby boom’ generation coming to retirement and creating a demand ‘bulge’ on the commitment to pay universal pensions at a reasonable level can be anticipated and planned for ( the so-called ‘Cullen’ fund). If the ACC funding was in crisis this could be handled in the same way, but it is not in crisis and no amount of insisting that it is on the part of the present Minister can make it so.

The problem arises because the current government insists that all of the future financial obligations of the fund must be funded in the present. That would make sense if the ACC was an insurance scheme - which it is not and was never intended to be. It makes even more sense if the government has a hidden agenda - which looks increasingly likely - to privatise the ACC or farm parts of it out to insurance companies. In those circumstances, a fully funded scheme in which the fund has been paid for by taxpayers would look a very attractive proposition to a private insurer, but it is one to which I am entirely opposed.

The second reason is that the ACC scheme was never intended to be a user pays scheme in which those who allegedly incur specific costs must, as a group, also meet those costs in full. The scheme is intended to draw upon the overall resources of the community to ensure that those who suffer an accident do not find themselves disadvantaged because they cannot afford treatment or rehabilitation, or meet the expenses associated with a lengthy court case. I note that Sir Owen Woodhouse, whose report led to the setting up of the scheme in 1973 has very recently said precisely that. Saying that motor cyclists must pay much more than presently because they are ‘responsible’ for their accidents not only breaches the principal behind the scheme, it also re-introduces the notion of fault into the scheme when it was set up in the first place to avoid it.

Please be assured that I will be opposing the proposed increased levy and that we in the Progressive Party are committed to restoring the scheme to its original basis when we return to government.

Warm regards,

Jim Anderton
MP for Wigram
Progressive Party Leader

2. Read this: http://www.thestandard.org.nz/first-manufacture-a-crisis/

(but if not, then well you jsut need to know that  "the cost of new claims isn’t rising (steady at $1.7 billion for the last 2 years)." and pretty much they are increasing the levy because they are attempting to change the acc model from pay as you go to fully funded, which requires a massive amount of savings if they are trying to do it by 2014...

3. Car drivers are not subsidising motorcyclists as much as you are being led to believe

"ACC said that in 2008/09 it paid more than $62 million for accidents involving motorcycles. It collected $12.3m in levies from motorcyclists in the same period." (NZPA 16th Oct) This has also been quoted by both Nick Smith and John Judge and means there is a $50m shortfall which must be funded from other means.

"Dr Smith said motorcyclists were 16 times more likely than car drivers to be involved in accidents yet car owners were currently subsidising their ACC bills by $77 each."

The MOT Annual Vehicle Fleet Statistics for 2008 states there are 2,584,509 light passenger vehicles in New Zealand (light passenger vehicles are defined as cars and vans) - See here:

http://www.transport.govt.nz/research/NewZealandVehicleFleetStatistics/

So here is the problem.

$77 x 2,584,509 = $199,007,193 which means car drivers are paying $149m more than the total ACC cost supposedly incurred by motorcyclists.

THIS FAR EXCEEDS THE $50m SHORTFALL claimed by ACC for 2008/09. Given this is supposed to be a fully funded model of compensation one would hope motorcyclists are NOT paying for the tail of accidents hanging over from 1999, an aberration caused by the National Government’s 1998 change to ACC.

4. what about cyclists

In 2008 there were 1,475 motorcycle accidents and 50 deaths, and motorcyclists paid approximately $12.3 million in levies.

In 2008 there were 1,170 bicycle accidents and 36 deaths. Cyclists paid no ACC levies.

5. motorcyclists causing all the accidents

well for a start, ACC is a "no-fault" system, but ignoring that: 

"From research conducted at the Australasian Institute of Motorcycle Studies (AIMS) based at Lincoln University 67% of all accidents involving motorcycles involve other vehicles. Sixty percent of those (or 40% of all motorcycle accidents) are caused by the other driver. "

---

so yeah i am pretty certain that acc levy increases are dumb.

most of my info is obviously heavily biased and comes from http://www.bikersagainstacc.org.nz

FIGHT THE INCREASEEEEE PLZZZZZ :( ITS SO RIDICULOUSLY EXPENSE++ ;_;