David Farrar: Meet the Greens – ACC

Labour appear to have decided on a strategy of releasing as little policy as possible, making it difficult to assess the impact on us of a Labour-led Government.

Fortunately the Greens are not shy in releasing policy, so in the absence of Labour policy I am going to look at Greens policy to get some idea of what the costs will be of a change in government.

I will go through their policies in alphabetical order. My brain could not cope with reading too much Green policy in one sitting, so these will be spaced out over a few weeks.

Their first policy is ACC. They key aspects are:

• Extending the ACC scheme to include income support and treatment for injuries, disability, and illnesses, regardless of origin.
• Revoking requirements for co-payments to treatment providers

So what would this cost, and who would pay for it?

A 2013 Treasury estimate put the cost of extending the ACC scheme at $1.5 billion, which would be $2.1 billion in 2026 dollars. Add in 21% population growth and you get $2.5 billion minimum cost.

Revoking co-payments just for physio is estimated to cost $65 million and physio is 25% of treatments so a conservative cost estimate (in reality number of treatments would increase massively) is $250 million.

So total annual cost of just this one policy is at least $2.75 billion a year. Thus would need the following tax changes to fund it:

• Top tax rate on income over $180k from 39% to 61%; or
• Tax rate of 41% on all income over $70k; or
• Increase GST from 15% to 16.5%

Again this is just the cost of their ACC policy, not all their policies.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders