McCarten on ACC
April 4th, 2010 at 10:29 am by David FarrarMatt McCarten writes in the HoS:
One hundred thousand workers on the legal minimum wage of $12.50 an hour get 25 cents added to their hourly wage this week. Thousands of others between the minimum and $12.75 an hour will get a top-up.
Given that we have a recession, many people may think those workers should be grateful to John Key for giving them anything. As Key said, at least the 25 cents would cover inflation, making them no worse off, and a group of low-paid workers told me this week that “it’s better than nothing”.
But as with many stories about workers and their relationship with the employment system, all is not as it seems. The fact is that, from today, low-paid workers will be worse off than they were this time last year even after the supposed largesse from our Prime Minister, because their Accident Compensation levies go up this week, too.
The Government hopes workers won’t notice, but those on the minimum wage will have an extra 3.75 cents an hour automatically deducted from this week’s pay packet.
It’s a tax increase, although National pretends it’s not. What is galling is that the levy increase is being imposed to ensure ACC can show a big profit and then be flicked off as a cash cow to some multinational after the next election.
Matt is right that ACC premiums are going up, from 1.7% to 2.0%.
However what he overlooks is that National’s pruning of ACC has prevented the premiums from going up even further. The massive unfunded liabilities left by Labour would have pushed the employee ACC levies up to over 3.0% of income.
Matt was one of those protesting the pruning of ACC’s costs, so for him to them protest about the levy increase is rather hypocritical.
This is not Disneyland, where you can have the costs of ACC increase, but not have levies increase.
And frankly the idea that anyone would buy ACC is as nonsensical as the notion that anyone would buy Kiwirail.
April 4th, 2010 at 10:36 am
Why not have a workcover system like in Australia? The private scheme is cheaper and gives bigger payouts than ACC.
Vote:April 4th, 2010 at 10:41 am
Doesn’t all this prove the point that ACC tries to be too all emcompassing. Why shouldn’t sporting clubs or individual motorists for example pay for their own third party insurance? What absolve responsibility and hand it to the taxpayer.
Vote:April 4th, 2010 at 10:46 am
“Unfunded liabilities” is a myth invented by Nactional. These liabilities will be funded by future levies. It is a fiction that all the costs incurred in one year should be paid in taht year as lump sums are rare, drip feed payments the norm.
gazzmaniac (410) Says:
April 4th, 2010 at 10:36 am
Why not have a workcover system like in Australia?
Maybe because ACC covers a lot more than work related injuries. Have you comapred the ACC levy part of vehilce registartion with the third party levies on Oz registrations?
Vote:April 4th, 2010 at 10:54 am
LRO – there is a Compulsory Third Party injury scheme in Australia. You have to pay it to register your car. It’s roughly the same price as the ACC component of registration in New Zealand, but you get a bigger payout if you’re injured by a vehicle and not at fault (and about the same if you are). You also don’t get an ACC levy on petrol, so in fact it’s a cheaper scheme. You also get a choice of providers – I’m with Suncorp.
Vote:As an added bonus, you don’t have to deal with the government.
April 4th, 2010 at 11:30 am
>And frankly the idea that anyone would buy ACC is as nonsensical as the notion that anyone would buy Kiwirail.
Inefficient money losing enterprises that provide a low level of service and only survive because they are a legislated monopoly are the “family silverware” in LeftyWorld. They cherish that sort of hopeless corporation and think other people do to. Socialists love ugly faulty tat.
Vote:April 4th, 2010 at 11:55 am
No it’s socialism… People who believe socialism works think the gummit has lots of money and can’t understand that govt spending needs to be funded from tax payers. Remember tax payers – them evil rich pricks who have more money than a beneficiary….
Vote:April 4th, 2010 at 12:06 pm
gazzmaniac
Choice of providers…. so not a one size fits all system designed to make life easy for central administration… wow, kind of designed for the people who use it rather than the people who run it. How quaint.
Vote:April 4th, 2010 at 12:11 pm
“This is not Disneyland”
Careful Disney was an adamant anti-socialism campaigner- nearly shut down the studios over it!
Vote:Why cannot McCarten just crawl back into one of the political party echelons and away from the public eye again to give so many people peace of mind
April 4th, 2010 at 12:19 pm
burt –
Vote:The best bit is that if you are injured, the insurance company want to give you a payout so your liability is off their books. Plus you can take them to court if you don’t agree with the offer presented. Bit of a contrast to ACC.
April 4th, 2010 at 12:31 pm
The game being played is to change ACC accounts so they are the same as a private insurer, laudable aim but not needed but it will show a large loss/ liability. Then you put up the levies to cover this loss and hence higher premiums which will encourage private providers to set up shop here and you get a bit of competition as promised in the manifesto.
Vote:Typical Nick Smith behaviour, he is fundamentally dishonest in pursuit of his own agenda. Key runs a pretty honest ship and dosent seem to play the political games of yore but Smith and English play media games and perpetuate the ongoing distrust of politicians.
Having said that I would welcome competition for ACC but I prefer my politics upfront and honest.
April 4th, 2010 at 1:34 pm
” Why cannot McCarten just crawl back into one of the political party echelons and away from the public eye again to give so many people peace of mind ”
Because the out of touch elitists at the Herald mistakenly think people are interested in the drivel McCarten spouts. Its another reason the net is so useful, in that much more in touch and astute people can decimate such drivel, as Mr. Farrar has done here.
The Herald is full of left wing liberal or progressive opinion, with no countering argument from the right. A disgraceful disgusting rag, is it any closer to going broke this year?? I hope so.
Vote:April 4th, 2010 at 2:20 pm
How can you take Matt seriously… when the media just use him for a time filler.
Vote:April 4th, 2010 at 2:31 pm
i’m the first to admit that the ACC system isn’t perfect and that it could certainly do with some bottom-pruning to remove the burden of trivial and vexatious claims, however National have manipulated figures to create an excuse to bleed a little more out of the average worker.
Vote:Keys’ claim that workers on the minimum wage will be ”no worse off” than this time last year, is at best delusional and at worst down right dishonest. Anyone who spends the bulk of their income on items such as groceries, petrol, electricity, rent etc, will tell you that the disparity between ‘reported’ and ‘real’ inflation is massive and that the resulting decrease in living standards is like the mammoth in the study.
The 25cent per hour increase in the minimum wage was a cynical and insulting move by a National government intent on lowering taxes for the wealthiest New Zealanders at the expense of those who can least afford it.
What i would like to see is a show of strenghth from those earning the minimum wage, because their combined power is immence. Concider this all you ineducable right-wingers, if every worker on the minimum wage went on strike they would bring the country to its knees- that is every supermarket, petrol station, many service industries and manufacturers would be shut down and the flow on effects would be massive. Maybe when you couldn’t drive down to the deli, in your BMW to pick up your pure goats cheese feta, you’d acquiesce to approving perhaps a $1per hour increase in the minimum wage.
If the dead wood in middle management in many sectors was removed, there would be ample opportunity to pay those productive workers lower down the chain more. However ‘punishing’ low income earners by increasing their costs, while lowering their living standard will simply drive them to the greener pastures of Australia. But then i guess the wealthy with their newly acquired tax cuts won’t mind doing alot of the ‘menial’ tasks for themselves.
April 4th, 2010 at 2:34 pm
I see Matt thionks the 25 cents an hour pay rise comes from the Prime Minister. Anyone else would realise it comes from employers (and also from the unemployed).
Vote:April 4th, 2010 at 2:52 pm
“… National’s pruning of ACC has prevented the premiums from going up even further.”
With this impeccable logic we all should be grateful for that. I say: bollocks.
Where is this government’s instestinal fortitude to dismantle ACC? Nowehere.
Why is National unable to open ACC up to competition? Because it lacks the courage to undertake any reform and prefers to take the easy way out, in this case raise the premium.
So, Key’s pattern of inaction and indecisiveness continues, which of course requires spin and more spin from his followers.
Vote:April 4th, 2010 at 3:10 pm
Matt demands he gets paid by the hour not by word for his oral speeches..
Vote:April 4th, 2010 at 3:16 pm
I am so proud that we have a socialist police and court system in new zealand.
Although i would get a kick out of everybody having to have barbed wire and guards around there houses. It would bring nz more into line with some of my favourite third world haunts.
As for acc, im proud that we have a social system there also.
Ive asked around and in the countries where there health system is private(or at least half private) its lots more expensive than here. This is what I’ve come to believe from asking first hand, the people from other countries, generally the right guys at kiwiblog say that public is more expensive, I’m open to some info that would back those claims up.
Vote:April 4th, 2010 at 3:29 pm
real independent, bang on dude.
Vote:One friend of mine went to oz not so long ago and is now earning 11500 bucks a month and still only working at Australian work pace. He is unqualified and i don’t think we would of ever earned more than 18 buck an hour in nz.
When you meat people in life, in a social scene for eg, you shake hands and be polite etc. Well you don’t have to do this there no law saying you have to etc. This is the way i see the minimum wage, its just a lack of respect for people, so in turn I show my employers the respect they show me, and some of them are destined right from the start to left high and dry on that mourning that i decide that Im done with them.
April 4th, 2010 at 3:47 pm
exactly menace.
Particularly if you are in ‘casual employment’ (which is just an excuse to avoid committments and shaft you at a moments notice).
If that is the contempt you are to show me, well fck ya.
I moved over here to Aus and my wage has doubled; really opened my eyes. I think employers here have a different philosophy and they are getting a lot more out of me than any New Zealand employer ever did.
Vote:April 4th, 2010 at 3:53 pm
Ditto boredboy.
Vote:April 4th, 2010 at 3:54 pm
“”countries where there health system is private(or at least half private) its lots more expensive than here. This is what I’ve come to believe from asking first hand, the people from other countries, generally the right guys at kiwiblog say that public is more expensive, I’m open to some info that would back those claims up.”"
Private health is less expensive for the government .. therefore less expensive to the taxpayer.
Vote:Public health is more expensive for the government .. therefore for more expensive for the taxpayer.
It’s about personal responsiblity if you have to pay for your health you will take better care of yourself, and have cheap health insurance. If you don’t you will pay more. Why should those who take care of their own health have to pay for those who continue to smoke and drink for instance. Thats where our health dollar is going besides bureaucracy is simply to people who don’t take care of themselves in life coursing them health problems later in life. They need to take responsiblity for the own health.
April 4th, 2010 at 4:07 pm
Gonna back those claims up with some comparisons or something BK?
Vote:April 4th, 2010 at 4:13 pm
A couple of years ago I read McCarten’s book- the most self indulgent and anderton loathing tripe (of course some of us do loath him a little
) Ii had ever read – I actually wonder how he managed to become a pundit in the first place
Vote:April 4th, 2010 at 5:05 pm
DPF said: Matt was one of those protesting the pruning of ACC’s costs, so for him to them protest about the levy increase is rather hypocritical.
This is not Disneyland, where you can have the costs of ACC increase, but not have levies increase.
No, he is not being hypocritical. Both the levy increases and the entitlements cuts are a consequence of the stupid decision of both Labour and National to fully pre-fund projected future entitlements on existing ACC claims.
Revert to Pay As You Go, and the accounting problem that has been used as the excuse for both levy increases and entitlement cuts disappears – it is a creation of the unique funding model that has been adopted for ACC. We don’t insist on pre-funding Health or Education, so why ACC?
Vote:April 4th, 2010 at 5:09 pm
Insurance by its nature needs future accounting practises, Labour hid the liability and saddled the country with yet more debt to stay in power.
Thanks Labour.
Vote:April 4th, 2010 at 5:23 pm
menace @4:07 pm
Gonna back those claims up with some comparisons or something BK?
I’m not BK… but here’s something.
http://www.bodymindspine.co.nz/images/stories/spend%20our%20health%20dollars%20at%20dinner%20041108.pdf
Vote:April 4th, 2010 at 5:28 pm
McCarten seems to believe that catching up with Australia is a matter of the Govt giving an order, as it the Govt could legislate to double all wages and this would fix the problem.
The reality is that catching up means catching up on Australian productivity. That is something that will take years to even start to affect, and in the best case scenario, decades to reach the goal.
“What,” says Matt? “We are not there yet after 16 months? Sack the Govt! Bring back the socialists who didn’t even try to achieve this goal.”
Vote:April 4th, 2010 at 6:36 pm
@ expat 5:09 pm
It is you underlying assumption that is wrong expat. ACC is not insurance, and was never meant to be insurance.
If it were insurance, people would be able to negotiate their levies and potential entitlements. With ACC they are constrained by statute.
Vote:April 4th, 2010 at 6:50 pm
Der, no shit toad. That’s why ACC is poked.
Vote:April 4th, 2010 at 6:51 pm
toad –
Vote:that is why it is wrong. If people were able to negotiate their levies and entitlements, and had a choice of which provider to use, we wouldn’t be having this discussion.
Instead everyone has to pay an inefficient government agency that caters for a market that the private sector can profitably provide for for less cost and better entitlements. The Australian model is proof of this.
April 4th, 2010 at 6:53 pm
Hell, I agree completely with Toad. On top of that you can foresee ACC adding to their billions in investments from increased levies and a better handle on the claims area. I have no issues with having a buffer but demanding ACC needs the same reserves / accounting system as Soverign is plain unecessary.
Vote:April 4th, 2010 at 6:56 pm
No, you’re right Pongo.
Vote:ACC isn’t an insurance company. It is an inefficient and badly run government agency that needs to be replaced.
April 4th, 2010 at 8:34 pm
I think we have forgotten the original idea of ACC. It has recently been used as a secondary funder of the failing health system. It was set up to stop legal costs for workers and companies and keep pay-outs fair.
With our failing health system doctors have used ACC to to get their patients treatment and as a welfare system. We need to create a fair workable health system that treats people who need treatment on time irrespective of where their health was impaired and have a system which can compensate people for an actual injury that prevents employment.
We don’t want an American system of lawyers but we should set out clearly what we need and develop it. None of Nick Smiths ranting.
Vote:April 4th, 2010 at 8:39 pm
We have to make up our minds about what we expect from ACC.
Fully funding is just kneecapping the whole scheme, which is what I suspect both Labour and National intended by their joint decision.
It’s a ridiculous concept. Future liabilities are actually quite uncertain and could be reduced by any manner of change, including a booming economy where jobs are available and well paid…a fine chance?
ACC in its last years accounts made an operational surplus (ie income from levies exceeded payouts, excluding investments).
Fully funding is an ideological stance, not an economic one. A good case can be made not to fully fund.
It’s just the result of the country being run by two economically dry parties, and with Goff in charge of Labour, that ain’t going to change!
Vote:April 4th, 2010 at 9:03 pm
Agreed Luc. Actuarial predictions of what advances that have the potential to rehabilitate accident victims there may be in medical technology in 25 years time, and what the costs of them will be, are about as accurate as your or my prediction of whether we get a winning hand 157 cards into a blackjack game.
It is indeed an ideological stance, with minimal evidential basis, to fully pre-fund ACC.
Vote:April 4th, 2010 at 11:11 pm
toad
Fully funding ACC is an ideological position, unfortunately for your argument that it’s wrong it is an ideological position that fits perfectly the ideological position that the state should be the sole provider and funder of accident rehabilitation compensation.
If we take the position that the state will pick up the tab for virtually any accident I have today and cover the rehabilitation costs for the rest of my life then it is essential that the state seeks to ensure it has sufficient funds today to lever against that future liability.
The problem is off course that it is no fault and one size fits all. Like that was ever going to work. The Canadian govt sent a social policy task force to NZ circa 1990 to study ACC. The crux of the executive summary said that ACC was a gold solution that Canada would love to have but their population was too small to support it. It’s only ideology that keeps the scheme alive in NZ, only fitting that we get the reality check that we can’t actually afford it unless we continue to shackle future generations of tax payers with the no fault consequences of today.
Vote:April 5th, 2010 at 8:20 am
Well there lies the problem – you can’t challenge an ACC decision in the courts if you disagree with it, the premiums are incredibly high, and payouts are far from fair. How is it fair if somebody causes you harm and you are in the ward of the state for the rest of your life? I’d take a payout from a proper insurance company and look after myself any day.
Vote:April 5th, 2010 at 8:21 am
So let me get this right: the position of the Greens is that because future medical advances making it cheaper to rehabilitate overall cannot be predicted, we should not seek to fully fund the cost of future ACC entitlements? So, instead of getting the generation who will get most of the benefit, we should borrow and get the next generation to pay for it. Of course this only works if the social contract holds up and the next generation receives the same treatment. Somehow, like Superannuation and property, I think the next generation are going to get screwed under that arrangement.
Cheers, Chris W.
Vote: