ACC trust and confidence up

May 12th, 2016 at 3:00 pm by David Farrar

Nikki Kaye announced:

ACC Minister Nikki Kaye has welcomed the results of a Research New Zealand survey which shows that public trust and confidence in ACC has reached a new high.

“The survey shows that 61 per cent of New Zealanders surveyed in the 12 months to March 2016 have full trust and confidence in ACC, up from 56 per cent in the previous 12 months, and the result for the last quarter is 64 per cent, which is the highest result since the survey began in 2004,” says Ms Kaye.

ACC used to be in the news a lot for the wrong reasons. It hasn’t been for some time. And levies are dropping and the scheme is now fully funded.

45% of Kiwibank to be sold by NZ Post to Govt funds

April 6th, 2016 at 10:49 am by David Farrar

Bill English has announced:

NZ Post’s proposal for the Accident Compensation Corporation (ACC) and the NZ Super Fund (NZSF) to purchase part of Kiwibank will ensure the bank remains wholly owned by the Government, Ministers Bill English and Todd McClay say.

Kiwibank is currently a subsidiary of NZ Post. If the proposal goes ahead, a total of 45 per cent would be owned by the two additional taxpayer-owned shareholders.

“Kiwibank will remain 100 per cent Government-owned – that is a bottom-line,” Finance Minister Bill English says.

“To ensure this occurs, the proposal includes a right of first refusal for the Government over any future sale of shares – which we would exercise.”

State Owned Enterprises Minister Todd McClay says that the proposal, which values Kiwibank at $1.1 billion, could see benefits for Kiwibank, NZ Post, ACC, NZSF and taxpayers – but needs to stack up for all parties before it proceeds.

“When NZ Post’s Chair Sir Michael Cullen approached Ministers with the proposal, he explained it could give Kiwibank access to extra sources of capital for future growth and broaden its exposure to commercial expertise,” Mr McClay says.

Very interesting.

This is a proposal from NZ Post to the Government, not vice-versa.

On first glance it seems an improvement on the status quo. The NZ Super Fund and ACC have highly skilled investment staff who would be very good at weighing up decisions around future capital for Kiwibank to grow.

NZ Post has limited capacity to invest more in Kiwibank, as its main business line is fading.

Personally I’d sell both NZ Post and Kiwibank, but that is politically not going to happen.

“NZSF and ACC would have an investment in a profitable local company. NZ Post would receive a return for the shares, some of which would be used to repay debt built up to support Kiwibank’s expansion and some would be paid to the Government as a special dividend.”

NZ Post, NZSF and ACC are currently in discussions over the details of the transaction. A final decision about whether it goes ahead will be made later this financial year.

I can’t see any reason to say no, so long as the price for the shares is fair.

ACC changes

March 8th, 2016 at 11:00 am by David Farrar

The Herald reports:

Changes will include:

• Allowing self-service online, and shifting from paper-based processes that were judged to increase the risk of privacy breaches.
• Moving resources away from minor injuries and claims, meaning people with complex claims will receive more support.
• Improving the transparency of claim decisions, with people able to go online and “track and trace” decision-making as it progresses.
• Use data and evidence to identify what actually makes a difference, particularly in injury prevention.

I love the idea of being able to track and trace decisions on claims as they progress. Also the focus on data and evidence being used more.

No Fairfax these are not New Zealand’s riskiest industries

November 18th, 2015 at 2:00 pm by David Farrar

The headline:

ACC statistics show New Zealand’s riskiest industries

Note that headlines are not written by the journalist who wrote the story:

The data:

Top 10 industries for ACC claims in 2014

Dairy cattle farming 11,748

House construction 8,741

Sheep and beef cattle farming 7,687

Meat processing 6,081

Fabricated metal product manufacturing 4,862

Supermarket and grocery stores 4,859

Electrical services 3,540

Plumbing services 2,775


This data does not show risk. It primarily shows how many people work in an industry. There were four times as many claims in supermarkets as in logging. Does that mean supermarkets are riskier? Of course not.

What would be useful is adjusting for population the number of claims for each industry.

ACC residual levies to end

September 23rd, 2015 at 4:00 pm by David Farrar

Stuff reports:

More than half of New Zealand businesses will have their yearly ACC contributions cut after an old charge has been thrown out.

Residual levies, which have been collected since 1999, will be removed from ACC’s Work, Earners’ and Motor Vehicle Accounts next year, ACC minister Nikki Kaye announced Tuesday morning.

That means 53 per cent of Kiwi businesses will see decreases in their contributions to the Crown entity beginning in April next year, while 47 per cent will be paying more.

When ACC was set up in 1974,  it operated on ‘pay-as-you-go’ funding model, where every year a levy was collected to meet costs of claims for just that particular year.

But when the funding model changed in 1999, the levy changed to collect enough money to meet the anticipated long-term costs of claims.

Suddenly, for the 25 year period between 1974 and 1999, ACC hadn’t collected enough money to pay for future costs.

The residual levy was introduced to play catch up for the downstream costs of old claims, ensuring there were enough funds set aside to pay for ongoing claims predating 1999.

Now, the Government has has announced enough money has been collected to fund the ongoing costs of all claims on ACCs books, including for claimants who will rely on ACC for lifetime support.

The levies companies pay are experience rated, reflecting the likelihood of injury in their particular industries.

The safer the industry a company is in – and the less likely it is that its employees will make have to make claims – the less the company has to pay.

The residual component was fixed, based on old injury rates, some of which date back 10 years or more and have become outdated.

Now, all businesses will have their levies calculated on the most recent data around injuries, rather than historical data, which will see 53 per cent pay less to ACC, while 43 per cent would see hikes.

Having the levies reflect current accident rates, rather than historical rates, is a good thing.

Also good to see the accounts are now fully funded.

However, Kaye also announced Tuesday that there were further levy cuts in store which could lead to three out of four Kiwi businesses decreasing their contributions starting in the 2016/17 year.

“The ACC Board has advised me they intend to propose significant average levy reductions next year, which could mean only 25 per cent of businesses get a work levy increase,” Kaye said.

“Around 75 per cent of businesses would see their work levy reduced, with the reduction being very significant for some. This is because they will effectively get a reduction through both the residual levy being removed, as well as potential reductions to the work levy.”

That’s good. The key to keeping levies down is both a reduction in accidents, but also not increasing the scheme’s coverage constantly.

An end to one rort

August 10th, 2015 at 12:00 pm by David Farrar

The CTU has complained:

The CTU has today announced that its Health and Safety Representative Training programme, supported by ACC since 2003, will be ending in its current form this November.

Business New Zealand and private provider Impac Services are also affected by ACC’s decision.

ACC has supported this training since 2003, and over 33,000 Health and Safety Reps have been upskilled by the CTU in this period.

This training was a huge money maker for the CTU and Business NZ. The Taxpayers Union in 2014 exposed that ACC’s own internal papers found that of every $1 spent on this training, it returned a benefit of just 16 cents, so 84 cents was wasted.

Over ten years the CTU and Business NZ had received $19 million of ACC funding, yet the benefits delivered were estimated to be just $3.04 million.

I’m pleased to see ACC focus its money on effective prevention programmes, rather than fund two wealthy organisations.

The lengths some will go to, to rort the system

July 16th, 2015 at 11:00 am by David Farrar

Stuff reports:

A worker at a food processing plant deliberately poured chemicals into his own boots, a judge has ruled.

The man’s ACC payments were halted after a ruling found the “only plausible” way the worker could have received serious chemical burns to his feet was if it was self-inflicted.

The man was a machine operator at the plant in 2012 when he suffered the burns, caused by ‘Glissen’, a commercial cleaning agent containing high levels of sodium hydroxide.

A judgment made by Judge Grant Powell last month stated it was the third time the man had suffered burns by Glissen.

The earlier incidents occurred in March and April, 2007. The second of these resulted in fifth degree burns and led to the amputation of the toes on his left foot as well as a long period off work, during which he was provided ACC cover. He returned to his job in November 2011.

So it seems he first poured chemicals onto himself in March 2007. Didn’t do enough of a job, so he did it again a month later and got ACC for four and a half years, and then did it a third time a few months after returning to work.

A long time since I’ve heard of fifth degree burns, as you often don’t survive them. The description is:

Fifth and sixth degree burns are most often diagnosed during an autopsy. The damage goes all the way to the bone and everything between the skin and the bone is destroyed. It is unlikely that a person would survive this type of injury but if a miracle occurred then amputation of the affected area would be necessary.

How could you do that, just to get off work?

Labour says scrap the system because of a 0.3% error rate

July 2nd, 2015 at 7:00 am by David Farrar

The Herald reports:

The chaos caused by the new car registration system has led to it being labeled the “Novapay of transport” by Labour.

The party’s ACC spokeswoman Sue Moroney said minister Nikki Kaye needed to scrap the entire system after errors emerged in the lead up to its launch today.

The new system links each car model and make to a “risk rating” then adds a fee to the cost of car registration that is between $68.46 for the safest vehicles and $158.46 for lower ranked models. Previously, all motorists paid $198.65.

The system has caused frustration with motorists after computer errors impacting about 9000 motorists.

It’s not acceptable that there were errors, but let’s put this in context. Around 9,000 motorists were affected. There are over 3.5 million motor vehicles registered in NZ. That is a 0.25% error rate.

The individual ranking of each make and model fluctuates against a database of accident data at Monash University, an Australasian safety ranking system based on laboratory tests and information from the insurance industry.

Excellent – data based costings.

The idea of linking the cost of registration to risk rating was hoped to encourage motorists towards safer cars – a premise Ms Moroney said was flawed.

“It’s not a perfect science. The minister has implemented a system that pretends it is a perfect science and it will change behaviour.”

No one has claimed perfect science. What is being claimed is that it is sensible to have a higher levy for less safe vehicles, just as less safe industries have higher ACC premiums.

Labour against tying premiums to risk!

June 29th, 2015 at 12:00 pm by David Farrar

Stuff reports:

Labour is accusing the Government of rewarding those with “flash” cars at the expense of older and poorer owners, with ACC levies tied to vehicles safety ratings.

The new risk-rating ACC regime, which kicks in next month, means some owners of older cars will pay $158.46 annually – 52 per cent more than the $104.09 they would have paid without the differentiated system

Labour ACC spokeswoman Sue Moroney said more than a million owners would pay more than necessary.

Labour once again being silly. First of all the differentiated system collects the same amount of money in total. If you charge older less safe cars the same as newer more safe cars, then the fee for newer cars would be more.

ACC Minister Nikki Kaye said the purpose was to improve safety and the regime gave incentives to have safer vehicles.

About 50 per cent of older vehicles were in the safest band.

“There is a bit of a myth out there you have to have the flashest car to have the safest vehicle – that’s not correct.”

She said she understood many people did not have the choice to buy another car, but if they were choosing between two cars they could choose the safer one.

But Moroney questioned whether targeting the cost of registering a car was the best way to improve safety.

She asked if the system meant “the superannuant who’s never had an accident in her life, who happens to drive an older car because she’s on a fixed income is less safe than the corporate executive who’s just been to the long boozy lunch and gets in his Merc to drive away?” 

Now Sue Moroney is basically arguing to abolish ACC as a no faults scheme!

Tying premiums to risk is sensible and what happens with other levies such as the employer levy.

Labour looks at going back to huge unfunded liabilities for ACC

May 14th, 2015 at 7:00 am by David Farrar

Fran O’Sullivan reports:

Labour says it would consider widespread changes and might look at a “pay as you go” scheme rather than fully funding ACC in the future – should it become Government.

This would be a huge reckless step backwards. It was actually Labour that started to implement full funding, and very sad to see them backtrack on it.

If you go back to non fully funded levies, then you end up with ever increasing unfunded liabilities. Even worse the Government can make eligibility decisions that will have a huge impact in the long-term, but will escape scrutiny if levies are on a pay as you go basis. It allows Labour to massively increase costs, with the bills being left for future levy payers.

Once again we see Labour moving to the left of the Helen Clark Government. They have learnt nothing.

$500 million cut in ACC levies

May 12th, 2015 at 7:00 am by David Farrar

Nikki Kaye has announced:

Budget 2015 will signal ACC is on track to provide further levy cuts of around $375 million in 2016/17 and $120 million in 2017/18, says ACC Minister Nikki Kaye.

“These indicative levy cuts represent a total saving for New Zealanders of around $500 million, and will be spread across the motor vehicle, work and earners accounts,” says Ms Kaye. …

“The indicative reductions, if confirmed, will take total levy cuts since 2012 to around $2 billion, benefitting businesses, workers and motor vehicle owners alike.

“As an example, this year the average ACC motor vehicle levy, including the annual licence levy and petrol levy, will fall from around $330 to $195 a year.

“On current projections, this is likely to fall further to around $120 next year, making the average motor vehicle levy around one third of what it is right now.

You can’t complain about a reduction by two thirds.

“These levy cuts are possible because of ACC’s sound financial performance under the current government, which means the scheme is now essentially fully funded. In other words, it now has enough money invested to meet the future costs of all current claims.

“This is a far cry from six years ago, when we inherited a scheme that saw the gap between its assets and liabilities grow by $4.8 billion in one year alone.”

The levies will always, over time, reflect expected expenditure. Labour constantly increased ACC coverage which sent expenditure out of control. National has managed to get expenditure under control, which is why the levies can now reduce.

Ms Kaye is also introducing legislation, developed over the past year, to put in place a new ACC levy-setting framework, which will take effect in 2016/17. …

“The legislation I’m introducing will bring the levy setting process into line with the kind of accountability and transparency requirements that already apply to the operation of the government’s core budget under the Public Finance Act.

“New binding principles will be introduced to ensure the scheme is adequately funded to withstand economic volatilities, while ensuring levies are kept as low as possible and stable over time.

Greater transparency in the levy setting process will also be a good thing.

Much ado about nothing

April 21st, 2015 at 1:04 pm by David Farrar

Stuff reports:

Not all children will receive free GP visits as promised by the Government, according to documents revealed by the Greens.

That’s because they have never promised it. It is impossible to promise it as GPs do not work for the Government and the Government can not set their fees for them – unless you nationalise the entire primary healthcare sector.

ACC Minister Nikki Kaye has set the funding level at a rate that will only cover an estimated 90 per cent of doctors’ visits for children who are injured, Radio NZ has reported.

At last year’s election the Government campaigned on making doctors’ visits and prescriptions free for all children under 13 from July this year.

However the Green Party has called out Kaye for deciding 90 per cent coverage was close enough.

This shows a misunderstanding (either deliberate or not) of how the funding level is set.

GPs around NZ will currently charge a wide variety of fees for under 13s. For example some may charge $10 and some may charge $30. Each GP practice can be different to reflect their costs – rent, salaries etc. These are different in Epsom and in Rotorua, for example.

The Government set the funding at the level at which 90% of GPs are currently charging. Now this doesn’t mean that 10% of GPs will still charge a fee. If for example the subsidy is $30 and your charge was  $32, you may well decide that it is not worth the hassle, or the bad publicity, to charge a $2 part fee.

Over time more and more GPs will not charge a part fee, because if they do it is bad publicity, and patients may move.

Coleman and Kaye point out:

“We expect levels of uptake by general practices of the free under 13s scheme to be similar to uptake of the under 6s scheme,” says Dr Coleman.

“Currently 98 per cent of general practices offer free doctors’ visits for under 6s. Initial uptake was 70 per cent in January 2008, and it has steadily increased to current levels. There are only around twelve general practices in New Zealand that are not offering free under 6s doctor visits.”

So the fact the funding is set slightly below the level at which the 10% most expensive GPs charge, doesn’t mean you don’t get close to universal coverage.

But less us look at what the Greens are actually arguing for, and you will see that they are actually arguing for an incredibly appalling waste of scarce health dollars.

They are saying that the level of subsidy should be set at the level above which 100% of GPs currently charge.

Now think about that. The Greens are saying that the subsidy to GPs should be based on what the most expensive GP in NZ charges.

This would result in a massive wealth transfer to GPs. 99% of GPs would get a higher subsidy from the Government, than they were previously getting from patients. This would cost tens of millions of dollars.

And what would be the benefits to families? Well possibly it could result in no part-charges to the families who live in the areas with the most expensive GPs. These are generally the very wealthy suburbs such as Epsom, Wadestown etc. So the richest families in NZ would be the ones who benefit by not having a small part-charge.

I don’t have the exact numbers, but a ballpark estimate is that the cost per additional family subsidised to taxpayers and levypayers would be over $1,000!

You would be spending tens of millions more to eliminate part-charges for a handful of the wealthiest families.

The losers would be every family in NZ who pays tax and ACC.

The winners would be every GP in NZ, and the families who live in the wealthiest areas.

A huge transfer of wealth from middle income and low income NZ to the wealthiest. What the Greens call income inequality – and they are demanding it.

So I’m glad the Greens aren’t in Government, and that the subsidies are set at a sensible point such as the 90% level, rather than having the most expensive doctor in NZ determine the subsidies for the entire country.

The $800,000 man

October 24th, 2014 at 7:00 am by David Farrar

The Herald reports:

An unnamed ACC employee – understood to be investment manager Nicholas Bagnall, who oversees almost $27 billion in taxpayer funds – got over $800,000 in pay last year, likely making him our highest paid public servant.

The breakdown of staff pay in ACC’s annual report yesterday reveals its highest paid received between $810,000 and $820,000 in the last year.

Some may be surprised that a manager may get less than a CEO, but I’ve seen this before with IT Managers getting paid more than their bosses.

The Herald understands the ACC employee is not ACC chief executive Scott Pickering but a member of the state-owned injury insurer’s investment team, as was the corporation’s second highest-paid staffer, on just over $700,000.

Mr Bagnall has led ACC’s investment team for the past 15 years. He would not confirm he was the employee referred to in ACC’s report but said he was “very well paid”.

I don’t have a problem with Mr Bagnall being paid that much, if he is performing well enough to justify it.

The ACC Annual Report shows ACC has financial assets of $27.6 billion and they got a 6.3% return on investment which is $1.6 billion of income. Paying someone $800,000 a year to manage $27.6 billion of assets seems reasonable. A 0.1% improved return of investment of those assets is worth $27 million.

Three ACC levy reductions

August 6th, 2014 at 2:00 pm by David Farrar

Judth Collins has announced three reductions in the levies we pay to ACC. They are:

  1. Petrol levy drops 3 cents a litre
  2. Employer levy drops 5 cents per $100 of earnings
  3. Motor Vehicle registration fees drop an average of $136 (including impact of petrol levy drop)

The good news about these drops are that they are sustainable, with their respective accounts being at least 90% fully funded.


Changes to ACC and sexual abuse victims

April 30th, 2014 at 7:00 am by David Farrar

The Herald reports:

ACC will pay for every cent of rape victims’ counselling as part of a major overhaul of its sensitive claims system later this year.

The corporation is bracing for a significant increase in the number of sensitive claims in the next six years as the stigma around sexual violence is increasingly broken down in New Zealand.

In response, it was planning an expanded, more flexible service which took into account the sensitivity, length of time, and cost of treating rape-related trauma. These changes were based on the recommendations of a highly critical independent review in 2010. …

ACC strategy manager for sexual violence Emma Powell said the overhaul would give victims more time, funding and choice.

“We are no longer going to be approving 10 counselling sessions here, or 10 there, we are actually saying ‘Here’s 12 months, you and your therapists … build a programme around the person’s needs … and that’s about providing a much more holistic approach’.

“We’re throwing away the calendar and throwing away the clock and just letting people focus on getting better.” …

At present, ACC funded counselling for rape victims but only up to $80 for a one-hour session. Counsellors often charged a “top-up”, or additional fee of up to $90.

Ms Powell said the corporation was concerned that this cost was putting people off a crucial service. Claimants were taking an average of 7.8 sessions despite being entitled to 16 sessions, or more depending on their circumstances.

Under the new service, ACC would cover the full cost of the sessions. The overhaul would also allow victims to shop around for a therapist who they felt comfortable with.

These are very significant changes. The estimated cost to levy payers is an extra $45 million per year.

BusinessNZ misses the point

January 17th, 2014 at 11:00 am by David Farrar

Vernon Small at Stuff reports:

Business NZ today broke its silence on the issue, with a press release quoting its chief executive, Phil O’Reilly.

“For the record, Business NZ utterly rejects mistaken allegations made by lobbyist Jordan Williams since repeated by the ACC minister,” O’Reilly said.

“The BusinessNZ family’s involvement has been completely ethical at all times, and I am confident that this is also the case with the involvement of the CTU and Impac Services.”

The CTU has also strongly rejected the criticisms by Collins and Williams.

O’Reilly said it was “unfortunate that important debate on workplace safety has been undermined by intemperate media comment”. …

O’Reilly said claims about the training scheme had been “regrettable and BusinessNZ had so far refrained from commenting on them because it has not been possible to have constructive dialogue in the context of overblown media comment”.

“Key issues are that New Zealand’s health and safety has just been changed and more stringent focus is needed on the goals of improving workplace safety,” O’Reilly said.

“The ACC and the Government are central to this goal, and BusinessNZ and the CTU as the largest representatives of people in the workplace also have a critical role to play.

BusinessNZ does have a role to play. That role should be representing the interests of businesses to ACC. When it sticks its hand out for effective taxpayer (or levy payer) funding, it becomes hopelessly compromised. How can it advocate for (for example) a reduction in levies when those levies help fund it?

Instead we have BusinessNZ defending ACC, themselves and the CTU, rather than sticking up for its members who I am sure the vast majority would like to see ACC more cost effective.

The goals and outcomes of the ACC courses appeared to have been misunderstood, O’Reilly said.

“The training part-funded by ACC is being run according to the brief set by ACC and is achieving the outcomes it was set up for. The objectives include ensuring that health and safety reps are able to reduce and remove workplace hazards, co-develop safety plans for their workplace, promote safety management among their co-workers, and train others to do the same.

“The course objectives are clearly specified and are being successfully delivered according to specifications.”

Contrary to claims by Williams, who is the spokesman for the anti-waste lobby group the Taxpayers’ Union, the training objective was not set in terms of reducing the number of workplace accidents in New Zealand, O’Reilly said.

But that’s the point. They should be.

What BusinessNZ and the CTU both overlook (because of course they get funded from the status quo) is the opportunity cost of the $19 million they have received. No one is saying what they have done is of no value. But think what could have been achieved if that $19 million had been spent on (for example) a campaign to reduce forestry accidents, or a campaign focusing on the five most dangerous industries.

I expect the CTU to not really grasp the reality that money doesn’t grow on trees, and that ACC should prioritise its limited budget to areas where it gets the best value for money. But I would have hoped Business NZ would realise this, especially as it is primarily their own members who fund ACC. This again show how hopelessly conflicted they have become on this issue, by allowing themselves to become part of the system they are meant to be a watchdog over.

The response from Business NZ is one of the reasons so many people have been supportive of the Taxpayers’ Union. Many people have complained to me that it has been some time since there has been a strong voice sticking up for those who fund the Government. Once upon a time Business NZ may have been that strong voice, but now it seems they’re about taking money from the Government, instead of demanding less wasteful spending on behalf of those who fund the Government.

CTU tries to defend their troughing

January 15th, 2014 at 2:00 pm by David Farrar

The Taxpayers Union yesterday revealed that ACC has spent $19 million funding Business NZ and the CTU for training which even if it lowered accident rates by 50%, would only return a benefit of 16 cents for every dollar spent.

The CTU has tried to justify their troughing by saying:

“We trained nearly 2000 health and safety representatives last year and the feedback from participants has been overwhelmingly positive. 97 % felt they could perform the role of health and safety rep more confidently than before the course, 96 % said the course showed them how they could improve health and safety in their workplaces and nearly 99 % found that these courses were beneficial and helped with their understanding of the role and the importance of health and safety at work. Feedback has been consistently positive since we began these courses.”

The measure of effectiveness is whether there are fewer accidents at workplaces that receive the training, not on whether participants in a course tick a form saying they enjoyed the course.

The CTU is rightfully focusing on the appallingly high level of deaths in the foresty sector. They would be outraged if the Government’s response was that it doesn’t matter whether or not there are fewer deaths, so long as as employees who do a safety course rate it as beneficial.

CTU President Helen Kelly has also had a rant at The Daily Blog. She thinks there is something sinister that the TU got a response to our OIA 19 days after it was filed. Is she unaware that 20 days is the legal limit? She also says:

The training deliverables for the contract do not focus on the outcomes of the training only the numbers trained but the course is approved and overseen by a tripartite group.

That is the problem. It should be about outcomes. The CTU demand better outcomes in the forestry sector (and I agree with them) but don’t think their own levy payer funded training courses should be linked to improving outcomes. This is the problem when you stick your hand out for government funding – you become conflicted and even hypocritical.



January 14th, 2014 at 4:00 pm by David Farrar

The Herald reports:

The Accident Compensation Corporation will end a health and safety training programme it said today after activist group the Taxpayers Union highlighted almost $20 million in spending on the training which generated few benefits.

The union today released documents detailing the corporation’s spending since 2003 on the programme to train employees in health and safety practices.

Beginning in 2003, the money was paid to the Council of Trade Unions (CTU), employers’ group Business NZ and private training provider Impac Services.

However the documents showed the $19 million spent “did little, if anything, to reduce workplace accidents”, Taxpayers Union executive director Jordan Williams said.

The release and detailed data from the Taxpayers Union is here. What is staggering is that even if you make the incredibly generous assumption that the training resulted in a 50% reduction in workplace accidents in sites visited (and of course it did not), then it is still wasting 84 cents in the dollar.  The benefits are just 16 cents for every dollar spent, even under the most generous assumptions.

It should have stopped years ago.

ACC analysis found that over the time the programme was working there was a reduction in claims even in workplaces where no safety or workplace activity has occurred.

The analysis suggested that even if the training was responsible for half of the reduction in accidents, at best only 16c in every $1 spent did any good, or in other words, 84c in every $1 was being wasted.

The documents reveal that Business NZ and the CTU worked together with ACC to create the venture and doubts about the value of the scheme had existed since at least 2008.

“Business NZ and the CTU have created a nice little earner for themselves”, said Mr Williams.

“It’s a disgraceful example of big corporate and union welfare chewing through taxpayer cash.”

There are many many organisations out there receiving taxpayer funding, and not producing enough benefits to justify it.  It’s good that ACC has decided to put a stop to this one, saving employees and employers money.

Labour on ACC levy reductions

December 4th, 2013 at 7:39 am by David Farrar

NewstalkZB reports:

Labour believes ACC levy cuts next year are timed to be an election bribe.

The Government has announced earners’ levies will be cut 15 per cent and the employers’ levy by 17 per cent.

Labour’s Iain Lees-Galloway says the cuts are overdue – and the timing is cynical. …

“There’s no doubt that the timing of this is designed to be an election bribe.”

Okay so in this paragraph Labour effectively says the reductions should not occur in an election year.

It’s disappointment for motorists, who’ll have to wait another year before paying lower ACC levies.

ACC had recommended cutting the motor vehicle levy by at least five per cent.

But the Government’s putting it off until 2015.

Mr Lees-Galloway says that means the least risky road users will continue subsidising the most risky.

While in this paragraph they attacking the Government for delaying motor levy cuts until 2015.

They’re not happy campers!

He wants $4 million of our money

November 28th, 2013 at 9:00 am by David Farrar

Stuff reports:

Nearing a month of living on the streets without food, Mike Dixon-McIver says only two things will end his protest – death, or a fair deal from ACC.

The 75-year-old ACC advocate has long assisted people with their claims, but has been locked in a six-year battle with the corporation after it tried to prosecute him for fraud.

The case was thrown out, and earlier this year a judge awarded Mr Dixon-McIver full legal costs of $13,000, but the corporation refused to go to mediation to discuss damages.

That led to Dixon-McIver camping outside ACC’s head office in Aitken St, demanding more than $4 million for damages and losses.

ACC agreed to talks, but the protest resumed last month after Dixon-McIver declined a $90,000 compensation offer that he considered an insult.

He wants those of us who fund ACC to hand over $4 million to him. That’s greed.

Dixon-McIver said he believed he would win if he took his case to court again, but did not have the will to spend another three years tied up in legal wranglings.

It had been difficult not eating for almost a month, but he was adamant he would not alter his course of action, even if that meant dying.

Emotional blackmail is so much easier than actually proving your case in court.

I think $90,000 is pretty generous offer. Demanding at least $4 million is sheer greed.

As I found out last time when I blogged on Mr Dixon-McIver:

Incidentally Mr Dixon-McIver seems to have had some compensation issues of his own, after the Employment Court ordered him to pay three months salary and $6,750 for distress, humiliation and injury to feelings to a former employee who was constructively dismissed after he threatened to assault her, following his son assaulting her.

Maybe the former employee should have gone for $4 million also.

Labour against lower ACC levies for safer cars

November 26th, 2013 at 1:00 pm by David Farrar

Hamish Ruthrford at Stuff reports:

ACC is proposing to cut levies by more than $500 million next year, in what is effectively a tax cut, but workers on average wages with older cars will reap only a few dollars a week.

It’s not a tax cut, even though it is paid through the IRD. The purpose of ACC is to have levies high enough to meet the costs of accidents. It should and must lower levies if it can do so.

All car owners will be better off through lower licensing fees – frequently referred to as registration fees – although the savings are dependent upon safety.

Under a new system, cars will be split into four risk-based categories, with licensing costs dropping from less than $10 a year for the least safe group 1 cars, to more than $92 for the most safe, group 4 cars.

Excellent. Levies should reflect risk. This is the same principle as with employer levies where a manufacturing plant will pay higher levies than a supermarket.

Despite strong lobbying from riders that they were subsidising other road users, there will be no cut in licensing levies for motorcycles, with Rebstock saying in reality car owners already heavily subsidised the cost of supporting injured motorcycle riders.

“If we charged motorcycle owners the full cost of motorcyclists’ injuries, it would make owning and riding a bike unaffordable.”

We should charge the full cost. However as you can only drive one motorcycle at a time, the levy should be per driver not per motorcycle.

Labour’s ACC spokesman Iain Lees-Galloway said people on low incomes would be penalised by the proposed regime.

“The way to improve the safety of our vehicle fleet is to make sure people have enough money to buy safe cars, not by penalising them for being poor.”

So Labour is against lower levies for safer cars. How depressing.

Workers will also take home a fraction more in wages, with the earners’ levy proposed to drop by 22 cents for every $100 earned, or $22 for every $10,000 earned.

Those earning $50,000 will get another $110 a year, while those earning $150,000 will get $330 a year.

I’m not sure this is correct. The earners’ levy is $1.70 per $100 of income but is capped at $116,089. So a 22c reduction per $100 will be a maximum reduction of $255.

UPDATE: Also worth noting that ACC reviews the levies every year, as required to by law.  It’s coincidental that it is election year next year. This is an annual event.

ACC almost fully funded now

October 2nd, 2013 at 2:00 pm by David Farrar

Judith Collins announced:

Two ACC accounts – the Earners Account and the Work Account – are now fully funded and the Motor Vehicle Account is expected to be fully funded soon.

Ms Collins says ACC’s progress to date has allowed this Government to signal $300 million worth of levy cuts for taxpayers for 2014/15.

This is really pleasing. Once all ACC accounts are fully funded, we won’t have a huge unfunded liability dependent on future levypayers.

What is good about getting to a fully funded state earlier rather than later, is that there may be room for significant levy drops for 2015/16 as the levies will no longer be needed to move ACC from pay as you go to fully funded. They’ll still need to meet the total costs of accidents that occur each year – but as I said I suspect further levy drops will be possible – which is good for employees, employers and motorists.

Million dollar union slush fund may be cut

October 1st, 2013 at 12:00 pm by David Farrar

Rob Hosking at NBR reports:

A $1 million government funding to the Council of Trade Unions to run accident prevention workshops is under review.

ACC Minister Judith Collins recently announced a near doubling of the amount of funding the Accident Compensation Corporation makes for accident prevention work, from $22.4 million to $40 million.

However that is accompanied by a review of existing programmes and in an interview with NBR ONLINE Ms Collins said she had told officials there are no sacred cows with regards to existing programmes.

“And I’ve told them if they need to kill sacred cows that need slaughtering, I’ll back them.” 

And in the next breath she queries the value of programmes run by the Council of Trade Unions.

The CTU gets “about a million dollars a year” to run such programmes and she says it is not obvious this is the best use of that money.

“What I want to see is what is working.”

Comparatively few accidents happen in the workplace, she says – about 20%, although these injuries tend to be more serious.

This is beyond excellent. Not only is Judith Collins doubling the amount of funding for accident prevention, she is going to ensure it is actually spent on accident prevention rather than union membership recruitment.

I understand the $1 million a year funding to the CTU was established by a former Labour Deputy Leader when he was ACC Chair. Labour constantly tries to find ways for taxpayers to fund unions so that the unions in turn can fund the Labour Party!

The CTU has responded by hysterically demanding Judith Collins resigns, because she is demanding proof that they actually do anything worthwhile with their $1 million a year.

I understand Business NZ gets some funding also. I’d scrap the funding to both bodies, and use it to run safety campaigns at the coal face.

A win against ACC

September 16th, 2013 at 10:00 am by David Farrar

The Herald reported:

A lawyer has won a three-year battle against ACC, which claimed pain she suffered after a car crash was from degeneration and not a neck injury.

When Madeleine Flannagan appealed against the decision to cut her entitlements – and before the case could be heard in the District Court – ACC accepted her injury was caused by the accident and offered the Orewa woman a settlement.

It’s a pity it took a court case to achieve this.

Madeleine blogs about the case in more detail here.

Supernatural ACC claims

July 17th, 2013 at 12:00 pm by David Farrar

I recently OIA’d ACC and asked them how many compensation claims had been paid out due to zombies, vampires or ghosts in the last five years.

I’ve had a response and there were 25 claims costing a total of $24,500 excl GST.

So not a great impact from our undead brethren. In fact sadly it seems all the claims were due to humans, not the undead.

ACC provided details of some of the claims (not identifying the clients of course), which are quite amusing. They include:

  • Being chased by a zombie at Spookers; turned and hit pole, and flipped over fence
  • Playing “zombies” at school; crashed into pole 
  • Playing ghosts tripped and fell 
  • Accidentally put arm through window telling ghost story
  • Crawling under bed to find ghost – hit head on bed
  • Fell off stage during ghost tour 
  • Playing ghost tag, bumped into dishwasher
  • Playing ghosts with sister; had a sheet over head, and banged jaw
  • Walking like a zombie in hallway; slipped on carpet and twisted ankle sideways
  • Banged forehead on door frame when pretending to be a ghost (wearing a blanket)
  • Theme park ghost ride – was thrown from side to side causing a horrible pain in neck
  • Removing face paint/makeup after zombie party; pain in eye while removing – worsened following morning

I like the crawling under the bed to find a ghost. I suspect they had a child unable to sleep due to the ghost there. Not sure hwo you play ghost tag, but sounds fun. Also unsure why you would walk like a zombie in a hallway, unless you were one.

Dressing up as a ghost is likely to lead you to walk into doorframes, unless you put eye hole in!