As expected, Nick Smith has imposed substantial ACC levy hikes on families. For a worker on $40,000 with a car, you’re looking at $150 more a year. I would say that would take a large bite out of most people’s tax cuts but the fact is most people didn’t get a tax cut from National. This government that promised the average worker ‘north of $50 a week’ in tax cuts has only succeeded in increasing the amount that goes from your wages to the government.
Of course, Smith’s increases are smaller than his handpicked head of ACC John Judge proposed but we always knew that would be the case. Judge’s job is to paint ACC as broken and costly. He has failed to draw attention to ACC’s successes (like the fact work injuries are falling) and overhyped every problem. Judge is now furiously denying he has acted politically. What a laugh. The guy’s a member of the Business Roundtable. His agenda is clear. Smith didn’t appoint him by accident.
Now, if these increases were necessary to keep our excellent ACC system healthy and sustainable, I would be the last to oppose them. But the fact is, they are unnecessary. ACC is taking in more than enough money to cover its annual costs and even the whole-life costs of new claims. The supposed ‘deficit’ is just the cost of old ongoing claims from before they switched to a fully-funded model. Insurance companies need to be fully-funded in case they go under; ACC is not an insurance company, it is a universal, no-fault compensation scheme and it can’t go under.
The only reason that ACC would need to be fully-funded like an insurance company is to prepare it for sale to insurance companies. That’s National’s long-game. To get there, they need to make the public dissatisfied with ACC and get it on a financial footing where it is ready for privatisation. And that’s what these levy hikes are all about.