The get ACC levy con

Written By: - Date published: 11:52 am, July 12th, 2011 - 14 comments
Categories: ACC, election 2011 - Tags:

After coming to office, National cried ‘crisis at ACC’ as an excuse for raising levies, cutting cover, and privatisation. In truth, the ‘crisis’ at ACC was only ever the decrease in the value of its investment as a result of the global financial crisis. The value of those assets was always going to recover, and it has.

Suddenly, the ‘crisis’ has disappeared and good ol’ National is cutting your ACC levies, back to where they were before National raised them. Now, just forget they put them up in the first place for no reason, and tick the blue box in November.

14 comments on “The get ACC levy con ”

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  1. Kevin Welsh 1
    12 July 2011 at 12:26 pm

    Why don’t they just leave them where they are and use the excess to build the investment fund quicker?

    • Lanthanide 1.1
      12 July 2011 at 12:46 pm

      Or, start providing better care. The 0.3% drop isn’t going to make my life much better, but it could do a lot of good for ACC claimants.

  2. Lanthanide 2
    12 July 2011 at 12:46 pm

    “The value of those assets was always going to recover, and it has.”

    What happens when it doesn’t after the next crisis?

    • Colonial Viper 2.1
      12 July 2011 at 1:20 pm

      There will come a time Lanth when that capital will need to be moved into building up real NZ assets and infrastructure for the long term.

      Its not far away either.

      China sees the writing on the wall and wants foreign dams, farms, ore deposits and tech. Not for their capital or income value, but for the fact they hold real practical value.

  3. Craig Glen Eden 3
    12 July 2011 at 1:05 pm

    THE CRISIS THE CRISIS!

    What crises was that again? Smith and National lied once again to set this up for profiteering for their mates what a disgace. National always stealing or stuff aye Oscar.

  4. Rich 4
    12 July 2011 at 1:15 pm

    They should dump the investment fund.

    Such a fund is necessary for a private life or property insurer that might be hit by an earthquake, or a drop in the number of premium payers, and needs to cover the possibility that claims will exceed premiums.

    ACC doesn’t need to do this. In general* accidents happen at a constant rate year on year, so the claims (including long term rehabilitation) can be covered by the levy on a constant basis. The only reason to have the fund is to enable ACC to be sold, closed or made non-universal in the future (which is of course NACTs plan).

    * The obvious exception is a natural disaster that creates lots of “accidents”. But even that is a relatively small hit and can be covered by specific reinsurance.

    • Blighty 4.1
      12 July 2011 at 1:50 pm

      I guess the argument is that the fund helps smooth costs, like the Cullen Fund does for super or Kiwisaver does for your personal retirement savings. I agree it doesn’t need to be a fully-funded model like a private insurer though.

      • Rich 4.1.1
        12 July 2011 at 2:51 pm

        It doesn’t though, because the stock markets fluctuate *more* than the rate of claims.

        (Incidentally Christchurch created around 10% of the *normal* claims volume – $300mln. Having a cash buffer of a years claims would be more than adequate. Instead they keep nearly 5 times that amount).

        If ACC needs a fund, then shouldn’t the Defence Force have one, in case of war? Or Health, in case of an epidemic?

  5. kriswgtn 5
    12 July 2011 at 1:38 pm

    But not dropping the increased ACC levies for motor vehicles

  6. Ianupnorth 6
    12 July 2011 at 4:14 pm

    From todays Herald – http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10737923
     
    Quite a few people thinking this is all smoke and mirrors and/or an election bribe.
     
    Did I hear correctly that those who would receive the biggest break on levies were the self employed?

    • Lanthanide 6.1
      12 July 2011 at 5:22 pm

      I think people will see this for what it is – a tax cut of $3.26 per week for someone earning $50k. A far cry from “North of $50 a week” and even less than Labour’s $5k tax free threshold.

      No one is going to think this is magnanimous or useful, instead they’ll see it as a blatant bribe or flip-flop on the ‘crisis’ at ACC.

    • Effin Nats 6.2
      12 July 2011 at 9:58 pm

      I am self employed, and an employer. My combined ACC levies rose 45% on the previous year. It would have to be a pretty big break indeed to make up for the shit sandwich that Nick Smith fed us last year.
      And to see Nick Smith and his muddled leader stand in front of the media making this announcement, as if the whole sham was something they could take credit for?
      They have totally stiffed the country with their ACC lies.

      (Oh yeah, of course my vehicle rego’s also skyrocketed with the ACC component hike, and my business is priced ahead 12 months, so I lost 2.5% income with the GST rise – and they call themselves a business friendly government!!)

  7. Drakula 7
    12 July 2011 at 7:43 pm

    People can be forgiven for thinking that it’s a bribe. I think that it’s an insult to the public’s intelligence!!!!

  8. Treetop 8
    13 July 2011 at 11:36 am

    There is a spike of ACC cases to be reviewed, (not sure at what level) but the number is about 800. It will be interesting to find out what percentage of cases after review are successful.