Readers of a certain age will remember an Antonioni film called Blowup. The title conceit involves a photographer who finds what appears to be a dead body in one of his photographs but when he blows the photo up to find out more all that happens is the resolution degrades. The more closely he looks the less clear things become. In the end he himself just disappears from the frame. All very existential (it was the 60’s after all)
It would be close to 20 years since I last watched Blowup but over the last few months I’ve had cause to remember it every time Nick Smith opens his mouth about the latest ACC “blow out”. Just yesterday he rode off the back of more dodgy numbers to claim that ACC is in crisis. But here’s the thing, the numbers are based on a reassessment of future costs which are then lumped together with this year’s costs to produce a shock-horror “deficit” of $12.8bn! As you can imagine Smith is already talking about cutting back coverage and the usual suspects in the media are already falling over themselves to breathlessly report this “blow out” despite having fallen for the same trick just a few months ago (I’m reminded of that old saying “Fool me once…”)
But if you were to apply the same logic to other portfolios what would it look like? Say we do the same thing with superannuation and lump all of the future costs into the one year. Why look at that, there’s no way we can fund decades worth of super out of this year’s revenues. It’s a super “blow out”! We better cut pensions to $5 a week right away!
The difference of course is that ACC could be made self-funding over time by chipping away at the backlog of historical long-term accident costs but that will take more time than the last government set aside and isn’t suitable for attacking the the system right now. After all “ACC shift to fully funded model will take a few years more than predicted” isn’t going to stir many voters into support for cutting their coverage and private sector involvement. Bollocks like “Big lift in ACC levies needed” well, that’s another story altogether.
Like Blowup the so-called crisis might be clear at first but the closer you look the less clear things become. Apart from one very clear thing, Smith’s agenda to discredit ACC and the help he is getting from Judge. Unfortunately, like Blowup, nobody seems interested in digging into the truth and, unlike Blowup, Smith won’t just disappear in a final shot as the whole farce is unveiled. In fact it looks like he’ll be given the chance to repeat this number-twisting farce again and again and again.
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