The Standard Week 28 Nov – 5 December

Written By: - Date published: 3:59 pm, December 5th, 2008 - 1 comment
Categories: standard week - Tags:

At the election, National won a mandate for its platform to review the Work Account of ACC, to see whether privatisation might make it better. Of course, we know that they’re not interested in the findings of any fair review, which would show ACC is a worldleading, cheap, efficient system that would be wrecked by privatisation. Lacking the mandate to just go ahead and privatise the thing, giving a bonanza to their insurance industry pals, National/ACT is trying to spin up a crisis around ACC. It spent this week trying to tell us ACC is in trouble, threatening us with higher levies, all to get people annoyed with ACC and soften the ground for privatisation (even though privatisation is in no way, shape, or form an answer to the costs coming from ACC’s reserves being hit by the credit crisis). Conveniently too, this ACC beat-up distracted the media from asking any hard questions of Key’s handling of the Thailand situation or taking a closer look at the tax package National will be ramming through when Parliament sits next week. Here are our favourite posts of the week:

CTU calls for fairer tax cuts
despite the media narrative about National’s ‘moderate’, ‘centrist’ policies the figures show its tax package is actually incredibly regressive. In fact, you could argue it’s been explicitly designed to divert money out of the pockets of working families and into the pockets of the already very wealthy..[more]

Nowhere to Hide
The problem National/ACT is now discovering is that you might be able to win power with endless repetition of this rubbish but, once you’re in power, you have high expectations to meet and no substance with which to fulfil them…[more]

For the sake of the hundreds of Kiwis stranded in Thailand, can’t John just spare us the dithering and let Phil Goff handle the crisis?…[more]

A journal for the ruling class
The Herald acts like it’s a journal for the ruling class, then they wonder why people aren’t buying their newspapers…[more]

Laying the foundations
Let’s not fool ourselves that what we’ve seen from National over the last 24 hours on to the shortfall in the ACC non-earners account hasn’t been carefully managed in a way to lay the foundation for their arguments in favour of privatising the scheme…[more]

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One comment on “The Standard Week 28 Nov – 5 December”

  1. Tim Ellis 1

    Of course, we know that they’re not interested in the findings of any fair review, which would show ACC is a worldleading, cheap, efficient system that would be wrecked by privatisation.

    SP just in case you want to take up the challenge, feel free to explain how you reach these conclusions. I agree that ACC is a world-leading system. It is possibly efficient, in that it delivers universal cover in a no-fault scheme, which makes it unique. Claiming opening up the Work Account to competition would “wreck” the ACC scheme is even more tenuous. The Work Account constitutes 15% of ACC claims, and about 10% of ACC liabilities. It is a relatively small part of the ACC system.

    Claiming that the non-work accounts are “cheap” is just nonsense. They have only historically been cheap through an archaic pay-as-you-go funding system, which isn’t cheap at all. It just transfers the cost of injuries onto future generations. It is as fiscally responsible as Rob Muldoon’s superannuation scheme: promise coverage now, pay for it later. The whole idea behind the Cullen Fund was to pay the future retirement cost for current employees now, rather than pass their future superannuation costs onto future taxpayers. If it is good enough for superannuitants to pay the full cost of their super entitlements when they are able to fund them (i.e., working), then it’s good enough for current levy-payers to pay the future cost of their injuries while they are able to pay levies.

    The reality is that the current entitlement regime for ACC, in a fully-funded accounting model, is not cheap at all. It’s very, very expensive. Which is why we’re looking at levy rates ballooning from 1.4 cents in the dollar to 2.2 cents, just in the next three years. That isn’t a cheap system. It’s a gold-plated system, which many would argue that our present economy just can’t afford.

    Let’s have a proper debate about the true costs of ACC, not just in the Work Account (which is the only account that works in a competitive insurance model), but also whether in a fully-funded system New Zealanders are prepared to pay for the gold-plated entitlements regime that are currently specified within the ACC system. It simply isn’t good enough to promise more entitlements while passing the funding of those entitlements onto future levy-payers.

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