ACC and how we're going to pick up the tab

[Ryan]

(taken from www.stuff.co.nz)

Steep hikes in the price of petrol and car registrations are about to hit taxpayers hard in the pocket, as the government moves to bail out the financially troubled Accident Compensation Corporation.

Wage earners will also lose hundreds of dollars a year from their pay packets, as the ACC levy rises. The government is expected to announce the "substantial increases" on Wednesday.

On Friday, ACC revealed it had posted a $4.8 billion loss for the last financial year, in what is being described as the biggest corporate loss in New Zealand's history.

Cabinet will tomorrow approve a bailout plan that also aims to safeguard ACC's financial future. The proposed changes will be open to public discussion for four to five weeks before ACC makes recommendations to the government.

While motorists and wage earners will shoulder the burden, the rescue package also involves paring back entitlements and getting injured workers off the compensation scheme faster. Already, ACC has cut funding for some services, such as physiotherapy.

Wage earners currently pay an ACC levy of 1.7% of what they earn, up to $110,000 (any income above that does not attract a levy). That is set to rise to 2.5%.

The Sunday Star-Times understands the ACC levy for a family earning $38,000 is likely to rise by $304 a year, plus an extra $52 to register the family car and 4c a litre more at the fuel pump.

If the government chooses not to increase the ACC petrol excise, which is now 9c a litre, the ACC component of registering a car, now $168, will go up even more – possibly by as much as $107.

Someone on the average wage of $45,000 will pay $360 more a year to ACC, plus the extra fuel and vehicle registration costs. The ACC levy for those on $65,000 will go up about $520 a year while those earning $85,000 will pay $680 more.

To soften the blow for taxpayers, the government is expected to introduce the changes gradually, with higher car registration and levies likely to be implemented next June.

ACC chairman John Judge told the Star-Times ACC's debt was worth about $3000 for every New Zealander, and it was going to take a "hard-nosed" approach – and possibly up to 10 years – to get it into a sustainable position. This would require "substantial" levy increases and legislative change to get people off the scheme and back to work quicker.

"In the last five years we've lost $9b. We need to act today because this liability is like a mortgage – if we don't start paying it off tomorrow it gets bigger by $700 million-$800 million a year."

Judge said ACC would not slash entitlements "but we are going to make sure that you only get the entitlements that you are due and that you need".
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ACC Minister Nick Smith said the choices for the government were "pretty ugly".

"It is inevitable there will be levy increases," he said. "The government's preferred approach is to get savings out of ACC operationally and out of pulling back on some of the welfare-type entitlements ... Without change, ACC is on course to go broke.

"This $4.8b loss will go down in New Zealand history as the biggest corporate loss of any entity, public or private, and is actually bigger than any deficit that the government has run collectively across all portfolios."

ACC's total liabilities over the past four years has blown out from $9.4b to $23.8b, mostly due to an increasing number of claims, a widening of entitlements that could be claimed, such as self-harm, and the actual cost of meeting the claims.

Labour's ACC spokesman David Parker said the situation was not as gloomy as the government was projecting. The ACC's liabilities and costs were increasing but it was also the country's biggest insurer, and the cost blow-out could not simply be blamed on poor management.

The government could soften the blow for taxpayers by extending the date for the full funding of historic claims, which were due to come into effect in 2014.


Well that's a ****ing windup isn't it? they lose $4.8billion of OUR money and they expect us to pick up the tab for them? Where is the large scale enquiry that should be convened to determine how so much money can simply .... vanish?

[bradc]

It is because ACC is being made to cover a wider range of things. People in this country need to harden the hell up and learn how to look after themselves.

[Ryan]

Well they're not helped by the government who seems determined to dictate how people run their lives.

[wintertidenz]

Damn... I've NEVER claimed ACC on any of the medical issues I've had - maybe the people who constantly claim ACC should pick up the tab more to cover their bills, or as Brad says, learn how to look after themselves better.

It's sickening to see how much money our government wastes and STILL has the balls to charge us more, just because it's them that are losing the money due to poor planning or whatever the case may be.

[Ryan]

Agreed Dan. This smacks of incompetence on the part of Nick Smith and his cronies. I think there should be an inquiry as to the root cause of these additional overheads.

[Subaru ETA]

It is because ACC is being made to cover a wider range of things. People in this country need to harden the hell up and learn how to look after themselves.

well...i have claimed ACC a couple of time for work related stuff - metal chunks in the eye, back problems etc. thats the joys of being a mechanic.

however i disagree with how ACC refuse to let you go back to work! one of my work mates was forced to be off work for 18 months. even he said he was fine after 3!! but if he did go back to work and anything happened he would be up **** creek!

[Rossco Type-S]

Agreed Dan. This smacks of incompetence on the part of Nick Smith and his cronies. I think there should be an inquiry as to the root cause of these additional overheads.

I think you will find the incompetence occured in the past Helen and Michael era - they just didn't disclose it.

[bradc]

Rossco is right, the problems began when the left wing started handing out money for everything.

Dave - metal chunks in the eye is perfectly acceptable What isn't acceptable is an ex-workmate (made redundant now because he is useless) having 7 weeks off work because he had a broken left arm. He is right handed and his entire job was operating the mouse and keyboard.

[wintertidenz]

When I had to take some time off work due to some issues created by work, I never got any compensation from ACC, nor did I think of even approaching them... I have seen people claim it left right and centre for tiny things, it's stupidity.

[SquattingDog]

Just had some ACC people give us a presentation today - looks like the new plan is coming out today, and rates will go up, and things covered down. Great!

When I had to take some time off work due to some issues created by work, I never got any compensation from ACC, nor did I think of even approaching them... I have seen people claim it left right and centre for tiny things, it's stupidity.

ACC will only pay you out up to 80% of your previous year's income, and if you're self employed and your accountant is doing their job to reduce your tax, this could be four fifths of f*** all. Plus you have to PROVE that you have a loss in income before they start paying.

If you were on Cover Plus Extra, you have an agreed value up to 120% of your previous year's income (more agreed value = higher premiums, obviously), and you don't need proof of loss of income.

Possibly one of the factors you didn't get paid out for it?

[KiwiTT]

They are considering giving ACC discounts to safer cars.

Our VR-4 woudl not be considered "safe" as I believe it only gets 2 stars. I have never been a supporter of "Safety" ratings as I feel they should focus on accident avoidance as opposed accident survival, and the VR-4 with 4WD and in some of our cars - ESC (ASC) is better.

[bradc]

Like the 2001 Hyundai, one air bag but no abs and it has tyres that offer negligible grip - a 1.3 with 70hp shouldn't be able to spin the tyres in 2nd gear!

[Rossco Type-S]

I am glad they are going to hammer motor cyclists with up to $500 extra a year in ACC fees. About time they paid their share.

[Ryan]

Personally, I'd like to see cyclist pay some sort of dividend towards this as well. They are neither licensed, taxed nor registered yet they make use of the road.

I suggest this only so that all road users can pay equal dues ... or at least to some extent.

[Adie]

I am glad they are going to hammer motor cyclists with up to $500 extra a year in ACC fees. About time they paid their share.

Seriously?

[bradc]

I agree with Ryan on this, cyclists should be licensed, registered and TAXED.

I do think that the bike fee is too high, even though I've never ridden a bike on a street.

What I can't figure out is why the hell we should all pay into ACC as a form of insurance, why can't it be optional, just like insurance? Further more in regards to cars, it should be the PERSON, not the vehicle. Charge the person an amount every year to renew their license and base the amount if you want on what sort of vehicles they are allowed to drive.

I'm personally fed up of paying more and more each year for the acc component in car registration, I can only ****ing drive one car at a ****ing time!

[Subaru ETA]

i think it is crack up how this country wants to be clean and green and make special lanes for motor cycles and scooters (bus lanes) and try to encourage people to ride scooters - dont use much fuel, small carbon foot pprint etc etc. then they turn around and charge them more to reg them then a car! that is just retarded. all that is going to happen is that people wont bother registring them at all. it will just be cheaper to take a couple of tickets a year.

as for the govt saying that it is not right that car drivers should have to pay $70 a year towards covering the ACC component of motor cycle reg...well its usually a car that takes a motor cycle out because they "didnt see them".

and yes, cyclist should start coughing up. they use the road, they take up road space and they get injured when they fall off on the road. so why should i be paying for them on my ACC levies?

[djb160]

I just feel sorry for the casual hog owner who is going to take it up the arse and only use his bike for a couple of hours on dry weekends.

I love ACC, they paid for my trip to the hospital when some some skinheads had a go at me. Wish they'd pay for replacement glasses too.