Have a mandatory, low cost scheme for people earning the average wage or below. Give them the option of choosing a private provider. Everybody above that can opt into the public provider at a percentage of wage system, or choose to go private. That way those of us that reduce our risk can be rewarded through lower premiums and we’re still ensuring those lower on the socio-economic ladder are taken care of.

It will be interesting to see what comes out of this. I’d personally prefer for all vehicles to be treated equally. Especially considering the lower environmental footprint of motorcycles, the reduction in congestion and other benefits associated with them as commuter vehicles.

I keep a 250 for commuting. It costs me $10 in petrol every two to three weeks and my trip home in rush hour takes about 15 minutes, compared to just over 50 minutes in a car or just over two hours using public transport. (No direct line, so need to take the train to town, change over and then take the other line or do the bus hop)

So for me, I’m saving about $500 in direct petrol costs and about 40 hours a month in time with my family by being on a motorcycle.

Increase costs to cover expenses.
People stop using the service that costs them.
Revenue for scheme drops.
Begin decimation …

Erm, at the same time if people stop using the dangerous service then accidents reduce and payouts from the scheme are reduced, cancelling the decreased revenue out. That is assuming the ACC levy on motorcyclists is correctly priced.

As it looks likely that the motorcycle levy is going to be lower than what is appropriate to fully cover motorcyclists, there is a net debt per user of the “service”, and if people are quitting the service will actually reduce that debt.

Hence quite the opposite of decimation – it will be better for ACC’s bank balance if people stop riding the bikes.

I’d also introduce another side of the arguement to those who say raising the levy is social engineering, trying to dictate how people live there lives.

The current amount motorcyclists pay is below what they’d be forced to pay in a private competitive insurance system (the intake from the levys is less than the amount payed out to bike accidents). Thus what we have here is the dumbest form of socialism imaginable: we are effectively providing a subsidy for people to partake in a dangerous activity.

This actually illustrates perhaps the worst problem with public provision of services: even if you keep a govt service as lean as a private enterprise, you still have decisions influenced by political considerations. We can’t raise the levy on motorcyclists as it will upset a large block of voters, even if costs of their accidents more than merits it.

When a deciding factor in pricing your workplace insurance scheme is the willingness of a group to ride a really long way on their motorbikes, then you have a scheme that makes no economic sense whatsoever. Does anybody really think the competitive alternative could be so bad as to be worse than this?

Yet you are arguing the opposite for ACC: in a socialised system, skiers and rugby players, etc, should be able to pass the costs of their voluntary, risky activity onto others via a socialised ACC system.

If the argument holds for smoking and drinking, why is it appropriately reversed for rugby and skiing?

So who will get a discount in the socialist system? At a guess: the elderly, sports people, large companies, and unions. These groups have political clout. Who does not? Motorists, contractors, non-union employees, and small businesses. The political clout of companies, unions, etc, does not come out of thin air – it comes from investments in lobbying – hikois, newspaper ads, setting up web sites, donations to political parties, commissioning reports – and all of that is (very considerable) deadweight loss.

This is an important reason why competition is valuable: there is usually no point investing in lobbying.

We are seeing politically-favoured groups being exempted from greenhouse gas obligations right now for exactly these reasons. Farmers have the power to make it easier or harder for Nick Smith and his party to be re-elected – and so he listens to them. Your average Joe/Josephine does not have that power, and carry the can. There’s no getting around it when politicians, who are granted the power of coercion, instead of companies, who are not, hold the purse strings.

I am a socialist so think that if acc costs more then we all just pay it, i am totally against privatization so im attacking the ideah before its officially on the table. I don’t know enough to know if the numbers you speak are accurate or if they are portryed correctly in the grand scheme(over years and not just one year) of things. But i have no problem paying th eincreased levies.

You know, I’d never have guess you to be a Socialist. What a novel ideah.

But what is moronic is claiming increasing levies decimates the scheme – is is the opposite.

Increase costs to cover expenses.
People stop using the service that costs them.
Revenue for scheme drops.
Begin decimation …

I do not want to fund a ludicrous rates scheme I have no choice. I would prefer to pay my own insurance where having appropriate safety gear, going on safety courses, etc. will decrease my rates and increase my chances of survival.

I want the choice to shop for my own insurance, and not have the nanny state government decide it for me.

I am a socialist so think that if acc costs more then we all just pay it, i am totally against privatization so im attacking the ideah before its officially on the table. I don’t know enough to know if the numbers you speak are accurate or if they are portryed correctly in the grand scheme(over years and not just one year) of things. But i have no problem paying th eincreased levies.

i spend a lot of time with non kiwis that are traveling here in NZ and recently i have been asking a few of them regarding the systems in there countries and what they cost.

Just roughly what i remember……

Switzerland(school teacher) 4 percent to the government system plus 400 kiwi dollars per month to a private scheme, both schemes are compulsory for him to pay into and he can’t have it any cheaper than that.

Germany you must have your own private insurance and its about 1000 nzd per month.

Travel insurance, mine cost a lot more than that 7 years ago(the last time i bothered with it)

Most of you will find this little story very interesting, a month ago the german girl i spoke to about this was with me and a few other friends doing some bouldering and she broke her leg, we took her to the hospital and had her patched up etc. Now she has travel insurance to cover her for these kinds of things. The interesting part is that her travel insurance doesn’t get used in thsi instance as it is our policy here in NZ to pay for the treatment of all people, kiwis or not. So although she has insurance it does not get used and ACC covers it.
Madness i know but i suppose we either have a policy where by we(nz tax payer) pay or we don’t.

In contrast, ACC is unbelievably costly. Its deficit for this year alone amounts to just under $1000 for every man, woman and child in the country, and roughly $1800 for every working person. And that’s just the deficit. They take 2% of your gross pay as well. And still they can’t make ends meet.

It’s not just skiers and rugby players paying thousands of dollars/year under ACC. Absolutely everybody is.

And if they want to start running things in a user pays fashion then i expect them to be consistent at least.
Triple or quadruple the prices of ski lift passs, get all the thugby players to start paying a thousand dollars a year each etc etc, one standard for all

Don’t be concerned with negative kharma if you’re attacking the sacred cows of the left Lance. Its like flak, a sure sign you’re over the target.

“There’s a ton of evidence on this important question, and nearly all of it confirms governments run companies that cost more and do less.”

The empirical evidence shows us that private ownership is by and large superior to state ownership, Nellis (”Privatization—A Summary Assessment”, Center for Global Development Working Paper Number 87 March, 2006.) for example, summaries this evidence as

“The vast majority of economic studies praise privatization’s positive impact at the level of the firm, as well as its positive macroeconomic and welfare contributions. Moreover, contrary to popular conception, privatization has not contributed to maldistribution of income or increased poverty – at least in the best-studied Latin American cases. In sum, the technical picture is generally positive.”

The following comes from the summary of chapter 4, ‘Empirical Evidence on Privatization’s Effectiveness in Nontransition Economies’, from William L. Megginson’s book “The Financial Economics of Privatization”, New York: Oxford University Press, 2005,

“The 87 studies from nontransition economies discussed in this chapter offer at least limited support for the proposition that privatization is associated with improvements in the operating and financial performance of divested firms. Most of these studies offer strong support for this proposition, and only a handful document outright performance declines after privatization. Almost all studies that examine post-privatization changes in output, efficiency, profitability, capital investment spending, and leverage document significant increases in the first four measures and significant declines in leverage.

The studies examined here are far less unanimous regarding the impact of privatization on employment levels in privatized firms. All governments fear that privatization will cause former SOEs to shed workers, and the key question in virtually every case is whether the divested firm’s sales will increase enough after privatization to offset the dramatically higher levels of per-worker productivity. Three studies document significant increases in employment [Galal, Jones, Tandon, and Vogelsang (1992); Megginson, Nash, and van Randenborgh (1994); and Boubakri and Cosset (1998)], but most of the remaining studies document significant-sometimes massive- employment declines. These conflicting results could be due to differences in methodology, sample size and make-up, or omitted factors.

However, it is more likely that the studies reflect real differences in post-privatization employment changes between countries and between industries. In other words, there is no “standard” outcome regarding employment changes.

Perhaps the safest conclusion we can assert is that privatization does not automatically mean employment reductions in divested firms, though this will likely occur unless sales can increase fast enough after divestiture to offset very large productivity gains. Since the empirical studies discussed in this chapter generally document performance improvements after privatization, a natural follow-up question is to ask why performance improves. For utilities, the need to introduce competition and an effective regulatory regime emerges as key, but there is no “silver bullet” answer for what makes privatization successful for firms in competitive industries. As we will discuss in the next chapter, a key determinant of performance improvement in transition economies is bringing in new managers after privatization. No study explicitly documents systematic evidence of this occurring in nontransition economies, but Wolfram (1998) and Cragg and Dyck (1999a,b) show that the compensation and pay-performance sensitivity of managers of privatized U.K. firms increases significantly after divestment. Studies that explicitly address the sources of post-privatization performance improvement using data from multiple nontransition economies tend to find stronger efficiency gains for firms in developing countries, in regulated industries, in firms that restructure operations after privatization, and in countries providing greater amounts of shareholder protection.”

Sunita Kikeri and John Nellis write in their article, An Assessment of Privatization, “The World Bank Research Observer”, vol. 19, no. 1 (Spring 2004)

“This article takes stock of the empirical evidence and shows that in competitive sectors privatization has been a resounding success in improving firm performance. In infrastructure sectors, privatization improves welfare, a broader and crucial objective, when it is accompanied by proper policy and regulatory frameworks.”

Mary M. Shirley and Patrick Walsh write in “Public versus Private Ownership: The Current State of the Debate”, Working Paper, The World Bank,

“Our review found greater ambiguity about ownership in theory than in the empirical literature. In the debate over the effects of competition, theory suggests that ownership may matter and if so, that private firms will outperform SOEs. The empirical studies squarely favor private ownership in competitive markets. Theory’s ambiguity about ownership in monopoly markets seems better justified, since the empirical literature is also less conclusive about the effects of ownership in such markets. Theories that assume a welfare maximizing government suggest that SOEs can correct market failures. In contrast, public choice theories are skeptical of the benevolent government model. Corporate governance theories suggest that even well intentioned governments may not be able to assure that SOE managers do their bidding. The empirical literature favors those skeptical of SOEs as a tool to address market failures. In studies of industrialized countries, where we might expect more developed political markets to motivate greater government concern with welfare maximization or better information and incentives to overcome corporate governance problems, private firms still have an advantage. The private advantage is more pronounced in developing countries, where market failures are more likely.”

[DPF: Read what I said. I said good on them for protesting and that there were some issues with the levy calculation. But what is moronic is claiming increasing levies decimates the scheme - is is the opposite.]

No need to let a double standard get in the way of a good story…

On the other hand the attitude could be – this is a stealth tax increase, it is wrong, where can I join the campaign against it?

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