ACC is a uniquely Kiwi success story that would be considered a catastrophic miscalculation in most jurisdictions. Workers killed or injured in the workplace cannot sue those responsible. Instead we pay them a remittance from the exchequer. 80% of your income, up to a fairly low maximum, and a few quid if you lose your arm.
The largest cheque you can get is $173k if your impairment is measured at 80%. Most awards, it appears, are a fraction of that. Those responsible are not held liable. Consequently we kill our workers at nearly twice the rate of our Australian cousins and three times the rate of the United Kingdom.
To compensate for the lack of litigation, we deploy Worksafe to keep pressure on employers. Around 50 Kiwis die from work related incidents each year and another 400 suffer serious injury. Worksafe launched 141 investigations and began 69 prosecutions, according to their 2024 annual report.
It is a poor substitute for the clarity imposed by costly litigation resulting from negligence.
Progressives like the idea of a centralised bureaucracy and are untroubled by the fact it does not work. Business is happy to avoid the premiums and inconvenience of protecting their staff. Everyone wins except the workers injured or killed on the job.
So far so good; but as Willis hinted at, there are a few financial issues over at the Corporation.
Part of the problem is ACC’s expanding remit, as anyone who has visited their GP can attest. If your aliment can be categorised as an accident then ACC will cover the tab.
In 1967 Sir Owen Woodhouse, in a royal commission to consider the issue, outlined a regime covered by principles; that uniquely New Zealand way of making a small problem larger.
He proposed community coverage, not individual responsibility, for all accidents regardless of where they occurred, complete rehabilitation, and real compensation.
These principles are elastic. A recent court case ruled that if you were unable to work because of childhood sexual abuse you can claim for the time off work. ACC has set aside $3.5 billion to cover the lost wages of a hundred thousand expected victims.
The $3.5b divided by a hundred thousand claimants means ACC is budgeting to pay far more in lost wages to an average victim of historical sexual abuse than a worker who has endured 80% impairment, and the recent annual report anticipates a further cohort of claimants as a result of the abuse in state care.
ACC took just over $4b in revenue and collected another $2b from the Crown for non-work- related claims. It paid out nearly $8b in claims and running costs. The corporation estimates that the future liability for claims already made is $54b. If the scheme ended today, this is the bill for those already in the system.
To balance this, ACC has close to $49b in assets; except, $28b of this is New Zealand government debt. In the past, ACC has run a surplus. It was meant to invest to build a rainy-day-fund. Instead, it lent the money to Treasury in an accounting fiction.
The scale of this fiscal quagmire makes the iRex ferry mishap look refreshingly manageable.
Thankfully the Government has appointed the Honourable Matt Doocey to improve the performance of the ACC, and in the fine tradition of politicians who do not want to do anything he has ordered an independent report.
I’m not sure why. Doocey doesn’t always read such documents, and ACC’s published annual report tells us everything.
It is an off-balance sheet financial liability amounting to nearly 10% of our GDP.
The fact that Willis removed it from her accounting measures could be a sign that this problem is being quietly pushed back into the fridge where, hopefully, it will sit long enough that someone else will have to deal with it.......The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective.
To compensate for the lack of litigation, we deploy Worksafe to keep pressure on employers. Around 50 Kiwis die from work related incidents each year and another 400 suffer serious injury. Worksafe launched 141 investigations and began 69 prosecutions, according to their 2024 annual report.
It is a poor substitute for the clarity imposed by costly litigation resulting from negligence.
Progressives like the idea of a centralised bureaucracy and are untroubled by the fact it does not work. Business is happy to avoid the premiums and inconvenience of protecting their staff. Everyone wins except the workers injured or killed on the job.
So far so good; but as Willis hinted at, there are a few financial issues over at the Corporation.
Part of the problem is ACC’s expanding remit, as anyone who has visited their GP can attest. If your aliment can be categorised as an accident then ACC will cover the tab.
In 1967 Sir Owen Woodhouse, in a royal commission to consider the issue, outlined a regime covered by principles; that uniquely New Zealand way of making a small problem larger.
He proposed community coverage, not individual responsibility, for all accidents regardless of where they occurred, complete rehabilitation, and real compensation.
These principles are elastic. A recent court case ruled that if you were unable to work because of childhood sexual abuse you can claim for the time off work. ACC has set aside $3.5 billion to cover the lost wages of a hundred thousand expected victims.
The $3.5b divided by a hundred thousand claimants means ACC is budgeting to pay far more in lost wages to an average victim of historical sexual abuse than a worker who has endured 80% impairment, and the recent annual report anticipates a further cohort of claimants as a result of the abuse in state care.
ACC took just over $4b in revenue and collected another $2b from the Crown for non-work- related claims. It paid out nearly $8b in claims and running costs. The corporation estimates that the future liability for claims already made is $54b. If the scheme ended today, this is the bill for those already in the system.
To balance this, ACC has close to $49b in assets; except, $28b of this is New Zealand government debt. In the past, ACC has run a surplus. It was meant to invest to build a rainy-day-fund. Instead, it lent the money to Treasury in an accounting fiction.
The scale of this fiscal quagmire makes the iRex ferry mishap look refreshingly manageable.
Thankfully the Government has appointed the Honourable Matt Doocey to improve the performance of the ACC, and in the fine tradition of politicians who do not want to do anything he has ordered an independent report.
I’m not sure why. Doocey doesn’t always read such documents, and ACC’s published annual report tells us everything.
It is an off-balance sheet financial liability amounting to nearly 10% of our GDP.
The fact that Willis removed it from her accounting measures could be a sign that this problem is being quietly pushed back into the fridge where, hopefully, it will sit long enough that someone else will have to deal with it.......The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective.
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