Accident Compensation Corporation (ACC) has grand designs on lifting its levies by double or triple the rate of inflation. Why? Supposedly it’s costing more and taking longer for injured Kiwis to recover, so ACC is consulting on fattening up its coffers.
There’s no question that the state insurer and our no-fault injury scheme is costing us a bomb. In the past financial year, the agency shelled out $7 billion on medical treatment, loss of income compensation and rehabilitation support. Remarkably, nearly 2 million new injury claims were filed with ACC in the past year. That’s the equivalent of nearly 40% of the population coming a cropper.
Are we really that accident-prone? Is the system being taken for a ride? Maybe I’m unusual, but I’ve never filed an ACC claim in my life.
So what’s proposed? ACC wishes to hike the levies it collects from vehicle owners by over 7% annually, for the next three years.
It intends charging motorcyclists proportionately more, given they are being heavily subsidised by other motorists, at present. In fact, motorcyclists only pay 28% of the costs incurred.
ACC is suggesting changes for the way motorcycles are levied with reductions for low powered mopeds but increases for more powerful bikes, averaging out at a 33% rise in levies.
Wage and salary earners could be in line for an annual levy increase above 4%, due to the rising cost of injuries incurred by workers beyond the workplace. And ACC is proposing lifting the levies for employers and the self-employed by the same level, due to the cost of covering injuries occurring in the workplace.
What about the future of no-claims discounts for eligible employers and the self-employed? ACC’s deputy chief executive, strategy, engagement and prevention, Andy Milne, tells me that the no claims discount programme is “not improving injury prevention outcomes, and instead creating unfairness for levy payers”.
There are 477,000 businesses (including self-employed people) who don’t qualify for the no claims discount or experience rating, but who subsidise those who do.
So ACC is proposing to swing the axe through the no claims discount and subsidisation of the experience rating. Milne says that would result “in a 5.6% levy reduction on average for small and self-employed businesses, while adding 1.2% to the levies collected from the 13,000 largest businesses in New Zealand”.
As a self-employed person who works from home, I’m all for that. As you may know, I’m principally engaged in travel media, so roughly a third of the year is spent off-shore. My multi-trip, unlimited, global travel insurance policy costs me $400 annually. Sure, it’s not exactly comparing apples with apples, but my self-employed ACC levies are more than triple that cost – and that is after minimising the level of agreed cover through ACC’s CoverPlus Extra. I wish I could shop around for ACC cover!
Meanwhile, the proposed increases to ACC levies have triggered renewed debate about whether ACC should continue to cover all accidental injuries for international visitors. In 2023, ACC shelled out over $20 million to overseas visitors for individual claims, including $9m in weekly compensation.
That doesn’t include the costs for emergency ambulance services or acute hospital care, which ACC bulk-funds to the tune of $741 million annually, covering residents and non-residents.
Then there’s the cost on the healthcare system for overseas visitors who fall ill. Health New Zealand advises me that in the year to June, in Canterbury alone, “we invoiced $6.28m for treatment of people ineligible for free healthcare and wrote off $193,000” in unpaid bills.
I would never dream of heading overseas without comprehensive travel insurance. Shouldn’t New Zealand make it a pre-condition to enter, that you have purchased travel insurance, aside from countries that we have reciprocal health agreements with?
There’s no intention of removing ACC cover for visitors, for fear that it would trigger the right to sue for accidents......The full article is published HERE
Mike Yardley is a writer and broadcaster - including with Newstalk ZB.
Are we really that accident-prone? Is the system being taken for a ride? Maybe I’m unusual, but I’ve never filed an ACC claim in my life.
So what’s proposed? ACC wishes to hike the levies it collects from vehicle owners by over 7% annually, for the next three years.
It intends charging motorcyclists proportionately more, given they are being heavily subsidised by other motorists, at present. In fact, motorcyclists only pay 28% of the costs incurred.
ACC is suggesting changes for the way motorcycles are levied with reductions for low powered mopeds but increases for more powerful bikes, averaging out at a 33% rise in levies.
Wage and salary earners could be in line for an annual levy increase above 4%, due to the rising cost of injuries incurred by workers beyond the workplace. And ACC is proposing lifting the levies for employers and the self-employed by the same level, due to the cost of covering injuries occurring in the workplace.
What about the future of no-claims discounts for eligible employers and the self-employed? ACC’s deputy chief executive, strategy, engagement and prevention, Andy Milne, tells me that the no claims discount programme is “not improving injury prevention outcomes, and instead creating unfairness for levy payers”.
There are 477,000 businesses (including self-employed people) who don’t qualify for the no claims discount or experience rating, but who subsidise those who do.
So ACC is proposing to swing the axe through the no claims discount and subsidisation of the experience rating. Milne says that would result “in a 5.6% levy reduction on average for small and self-employed businesses, while adding 1.2% to the levies collected from the 13,000 largest businesses in New Zealand”.
As a self-employed person who works from home, I’m all for that. As you may know, I’m principally engaged in travel media, so roughly a third of the year is spent off-shore. My multi-trip, unlimited, global travel insurance policy costs me $400 annually. Sure, it’s not exactly comparing apples with apples, but my self-employed ACC levies are more than triple that cost – and that is after minimising the level of agreed cover through ACC’s CoverPlus Extra. I wish I could shop around for ACC cover!
Meanwhile, the proposed increases to ACC levies have triggered renewed debate about whether ACC should continue to cover all accidental injuries for international visitors. In 2023, ACC shelled out over $20 million to overseas visitors for individual claims, including $9m in weekly compensation.
That doesn’t include the costs for emergency ambulance services or acute hospital care, which ACC bulk-funds to the tune of $741 million annually, covering residents and non-residents.
Then there’s the cost on the healthcare system for overseas visitors who fall ill. Health New Zealand advises me that in the year to June, in Canterbury alone, “we invoiced $6.28m for treatment of people ineligible for free healthcare and wrote off $193,000” in unpaid bills.
I would never dream of heading overseas without comprehensive travel insurance. Shouldn’t New Zealand make it a pre-condition to enter, that you have purchased travel insurance, aside from countries that we have reciprocal health agreements with?
There’s no intention of removing ACC cover for visitors, for fear that it would trigger the right to sue for accidents......The full article is published HERE
Mike Yardley is a writer and broadcaster - including with Newstalk ZB.
2 comments:
Increased levies are really increased taxes. NZ is approaching the context where the question : who can actually pay this increase ? is a key issue.
Adding wealth tax, inheritance tax, CG tax etc. is a diversion .
This is wealth redistribution in action - proved by the increased
number of so-called beneficiaries. i.e. many people who could work but do not. Genuine beneficiaries merit maximum help.
Yeah, the state is just here to help!
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