by frog
Someone in the insurance industry has leaked National’s secret agenda for ACC to the Sunday Star Times. Now, why would they be consulting with the insurance industry on ACC, I wonder? Unless privatisation is also a part of their secret agenda.
ACC Minister Nick Smith has now confirmed these proposals are all on the table:
- Introduce a $50 or $100 excess on every claim.
Try selling that one to someone on the minimum wage! Go to your local A&E clinic to get your cut finger stitched and a quarter of your take home income disappears – even if the accident happened at work and was because the employer’s equipment was faulty.
This will end up like National’s ill-fated public hospital out-patient charges from the 1990s – costing more to collect the fees than is returned in revenue, because people either can’t pay or won’t pay.
- Reduce income compensation from 80% to 70% after one year and 60% after two.
This breaches the social contract under which New Zealanders gave up the right to sue for personal injury, and will leave many people with insufficient to live on. For someone on the minimum wage, 60% of their pre-injury earnings is only $255 after tax a week. For a couple or family this is clearly inadequate, so the “savings” to ACC will just be loaded onto Work and Income as they are forced to apply for an invalid’s benefit or sickness benefit to top up the ACC payment.
- Impose a two-year limit on compensation for soft tissue injuries, such as back pain.
This ignores clinical evidence that while soft tissue injuries normally heal reasonably quickly, some develop into a secondary consequential injury known as chronic pain syndrome. Chronic pain syndrome is classified as a mental injury, so ACC will need to contract an army of psychiatrists and clinical psychologists to do the assessments for each long-term claimant. More likely, they will just boot people who cannot work because they suffer chronic pain syndrome off weekly compensation, so they too will end up on a Work and Income benefit – but receiving far less than they were getting from ACC.
- Introduce wider surveillance powers for ACC investigators to stamp out fraud.
What more do they need? ACC already have contracted private investigators undertaking surveillance on claimants they are suspicious about. Surely they are not contemplating search, seizure, and telephone tapping powers?
- Legislate to make it easier to get workers back to work.
How on earth can they legislate to make it easier to get workers back to work? Whether someone can get back to work or not is a medical decision, and ACC already have the power to refer a claimant to a doctor of their own choice if they are concerned a claimant might be malingering. I suspect what they really mean is legislate to make it easier to get claimants off weekly compensation – whether they have a job to go to or not.
And they are already planning to do that. If they can get the numbers in Parliament, that is.
It’s just not fair!
Published in Economy, Work, & Welfare | Featured by frog on Mon, October 19th, 2009
Tags: ACC, ACC cuts, Nick Smith, privatisation, Work and Income
on the trolls and those who are unable to keep on topic
I have worked part and full time for over 20 years, and not once in that time used ACC for anything. So, who is using ACC? The fact that I haven’t used ACC, would, if it was a proper company, result in myself paying lower premiums as I am a good risk.
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There is a joke in the US. We don’t need a law permitting assisted-suicide, we have an HMO. Worse luck, the system doesn’t work unless the MD is associated with the HMO. With so many different sorts of paperwork and policies the clerical staff outnumbers the nursing staff in many clinics. Aspiring to privatization here in NZ is just another mistake that National seems intent on making. Listing all of their errors at this point goes far beyond my patience. I am simply aware that this government is collectively and individually, the most stupid and incompetent bunch of greed worshiping pigs I’ve ever seen in NZ, and that is saying something because I watched two Labour governments before this.
Privatization of services gets a maybe… but of insurance? Not smart at all… unless you are in the insurance industry. Then you’d be rubbing your hands with glee and salivating at the prospect. Which I rather imagine they are doing.
So far you’ve been lucky. ACC applies the principle of insurance to the country as a whole. Collective risk. Competing the insurance means that yes, YOU will pay less and someone with more risk factors pays more. It means the insuror will do his/her best to keep from having to pay you if you get hurt. Will do their best to keep from having to insure someone with more risk factors. The incentives for the company are ALWAYS going to be contrary to the best interests of the insured.
People keep harping on the notion that privatization is the answer for EVERYTHING when it so clearly is good for some things and not good for others. This is one of the not good ideas.
BJ
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I don’t know where you work, but if it is a low risk industry, your employer will already probably be paying less for ACC than if you were a forestry worker (for example).
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I suffer from a diagnosed chronic pain syndrome. Not related to any work I have ever done. It is actually the reault of me trying to flip a mattress on a bed. I felt a twinge, and, as with any back twinge, assumed it would get better.
It didn’t. Not in weeks, not in months, and now not in years.
But I am lucky. I can still work. But I always have to work through pain. I hope to be able to work for another 20 years, but there are no guarantees. Sometimes I have to take a lot of painkillers to get through a day’s work, and sometimes I have to give up and go home to rest. But I can still hold down a job, and am lucky I have a good employer who understands my injury.
If I can’t work for another 20 years, then I will need ACC to come to the party again, just as they did when I was first injured. Because with my injury history, I don’t have a hope in hell of getting private medical insurance.
Don’t assume that just because you have had good luck in not being injured, others have the same experience.
Many don’t, and usually through no fault of themselves or anyone else.
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Who are these barbarians? these Erehwon’s who as Samual Buler described as punishing the sick and kicking them in the guts while feeling sorry and compassionate for the violent criminals who steal our social inheritance.
I don’t mean the criminals in our jails I mean the one’s running our country.
They are far more dangerous.
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Some very good analysis from Professor Tim Hazeldine in the NZ Herald today.
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Interesting to hear the true perspective of the National Government on ACC. In his comments after discussions with Mr Hide, John Key indicated that for his government to consider opening up ACC to competition they would “need to be convinced that there were benefits both to the Government and the private sector”. It seems that any resulting deterioration of benefits or service to the public of New Zealand are irrelevant in the government’s thinking.
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Tim Hazledine might try some basic accounting. An unfunded liability is always a problem, its even more of a problem if you adopt his do nothing attitude. He probably thinks NZ doesn’t have an unfunded pension problem or health costs due to retiring baby boomers. I do love his suggestions wait and then when it becomes a problem raise taxes to pay for it. Good luck with that.
The Greens need to get serious about understanding the effects of both peak oil and global warming. Both of those are going to lead to a reduction in the taxable incomes of individuals and this means a reduction in government services (health,pensions etc). Thinking you are going to tax young people to pay for old people is something I would expect from the science denying economist. However I expect better from you Toad.
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turnip28, Tim Hazeldine is a Professor of Economics at the University of Auckland. What are your qualifications in that regard?
Your comment about taxing young people to pay for old people makes little sense in the context of ACC. Over half of ACC claims expenditure is on weekly compensation. Weekly compensation ceases when a person reaches the qualifying age for New Zealand Superannuation (or within one or two years of that in some circumstances), so it is actually entitlements to people of working age who are the greatest financial liability of the ACC scheme.
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Arguing to authority doesn’t work Toad when one party doesn’t accept your religion. Economics is a pathetic discipline that offers little insight into the economy it is not a science yet claims to be. It fails time and again with its ability to predict the future.
Economics lacks the credibility to make the claims that it does. Unlike chemistry or physics the subject is divided into a multitude of different camps. Each one thinks they are the true path. It is much closer to a religion than a science. Guess what Toad I don’t give the time of day to the Christian religion and its explanations of the physical universe just as I don’t give the time of day to economists, maybe Tim is your high priest Toad but until he demonstrates his ability to predict the future he has no credibility with me. Please spare me the soft science/ hard science rubbish it doesn’t exist there is science and everything else if economics is a science then so is astrology.
My background Toad has been spent firstly studying computer science and then working as a software engineer for one of the world’s largest financial software companies. You can’t write the software Toad with out understanding the problem domain, in this case Finance & Accounting. This is why I see right through Tim’s arguments. Why does Tim present as his example a family? I take it you think the NZ government should run its finances just like a typical NZ family. Why instead doesn’t he present a company even a small company or maybe instead a large NZ corporation. It wouldn’t have anything to do with the fact his example breaks down maybe due to this. Companies account for future cash flows all the time. In fact the government has passed laws Toad that requires them to do this. An example would be if you bought a corporate 100,000 30 year bond Toad paying a 10% coupon. The company selling you that needs to account for a $10,000 cash flow every year for the next 30 years. Or are you and your friend Tim suggesting they could just decide to say not pay you.
The accounting for all this is called accrual as opposed to cash. Yes families use cash based accounting even small business do this, however large corporations do not and neither should the government.
“the idea that future accident compensation payments are rigid “obligations” which have to be “pre-funded”, as they say, along with some jiggery pokery with the projections of payouts and expenses. It’s dumber because, of course, the Government’s ability to raise revenue when needed is much more secure than any individual’s future income”
Tim also makes a statement here which should in fact scare the hell out of you Toad. Since he is saying the government if it wants to could decide to pay less to people on ACC. If the government did that you Toad would be the first person leaping up in arms.
Notice the economist making his assumptions, I have an engineering back ground Toad I am very weary of assumptions. They ALWAYS lead to system failure down the road. The government’s ability to raise revenue is not secure and comparing it to an individual family is redundant.
As to my final point it is you taking my statement out of context, the governments TOTAL tax take is going to decline Toad that includes ACC, So you can’t make the assumption today that you will raise taxes tomorow when there is going to be less money. Ignore reality all you want Toad economics does it all the time.
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If the government’s ability to collect tax revenue goes down due to these factors, the value of ACC’s investments on overseas sharemerkets will go down even more, and squirreling all that money away will turn out to have been a bad idea.
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Turnip 28 –
You have a point. Assumption is the mother of all f*ups. And Economists are not scientists, a point I keep making from a Humanities researcher’s perspective, which my Accy-qualified collegues on-campus keep trying to put down.
Briefly, there are a bunch of people out there denying Climate Science, but I think you’ll find on reflection that insurance companies, particularly the ones with global exposure, aren’t amongst them. They’ve worked the odds, they know not to insure properties on the coastal margins, or anywhere the tide will rise, they’re not insuring re-builds of resorts where the new typhoon/hurricane patterns are developing, and they are definitely not keen on insuring the health of the baby-boomers any more; so the rest of us will be picking up the tab, if we qualify for health insurance, ‘cos all those expensively-insured old people will have put up the rates for everyone else – ‘cos they are all lasting a lot longer, and they will all begin to decay at a similar probability rating, which the insurance companies have created a nice, fat loophole for themselves to cover.
ACC policy is merely an attempt by the Government to follow the market-led practice; remove cover for those who are most likely to need it, only cover those who have good health and won’t cost the company more than their annual premiums.
Insurance, after all, is merely one of the forms of gambling that we have become accustomed to – no insurance firm guarantees to cover all eventualities, read the fine print on any insurance policy you’ve ever held. It is an industry based around probabilities of failure – too high a probability of ill-health, for instance (lifestyle factors, inherited traits) and you can’t qualify for health insurance.
If we want the kind of poor service delivery that exists in the USA, where there is no hope for those afflicted with certain kinds of illnessess if they need to use the public health system, then go ahead, vote for John Key’s policies.
But do it clearly, and openly, understanding that you are asking for only the rich to be allowed to have healthcare, and that you are condemning the children of the poor to die for the want of simple drugs, which our current system subsidises for those in need.
Toad,
as always, you have made some very good points, which only another chronic pain sufferer will ever understand fully; and I thank my stars that I’m still able to get my pain-relief funded, despite spending one and a half hours in at WINZ today before getting to this computer terminal to grump about our health system (or lack of system).
Which requires one to have a vast grasp of policy analysis in order to get the provision of policy enacted by those who are in the front line; others not so stroppy or well-informed as I must frequently just give up & decide alcoholism is a more reasonable response than trying to work through the WINZ/ACC maze to get adequate medical funding.
I do not entirely jest
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Toad wrote: “If I can’t work for another 20 years, then I will need ACC to come to the party again, just as they did when I was first injured. Because with my injury history, I don’t have a hope in hell of getting private medical insurance.”
what about those of us whose health problems do not stem from workplace accidents, and have no hope of getting ACC coverage or private medical insurance?
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Good Point Kahi;- there is no absolute safety net. I am in a position very similar to Toad, except I cant work – am bedriiden lots….ACC have been of no value to me as people who have actual Cures, ime are not even funded by ACC – work that one out and you’ll have the keys (?) to the nation.
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Point taken, kahikitea and Mark. I am more fortunate than some, even though I get very grumpy with my pain sometimes, I can usually work through it.
ACC is, in principle, a great scheme. Its author, Sir Owen Woodhouse, in the late 1980s when he was Chair of the Law Commission, recommended its be extended to all impairments, regardless of cause. That would have addressed the issues that kahikatea has raised.
Unfortunately, that was ignored and the incoming National government in 1990 set about demolishing many of ACC’s best features. And we’ve never really got back to the original principles of the scheme.
Sir Owen Woodhouse, whom I believe is probably the greatest living New Zealander following Sir Edmond Hillary’s passing has, at the age of 93 when he should be enjoying his retirement as best as his health permits, felt it necessary to step forward into the public arena to defend what was, and still can be, our world-leading injury compensation scheme.
Well done, Sir Owen, and there are many of us backing you.
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Toad, re your back pain, have you been to an orthobionomist? I reccomend Kym Summers and Dale Speedy in Ngatea (Hauraki plains).
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fin, thanks for the recommendation, but Ngatea is far enough from home to be around my driving limit. I struggled to cope with a three and a half hour flight from Auckland to Brisbane, and the one back as well, a couple of months ago. At least on a plane, I can get up and stretch.
I have to admit (very bad Toad re carbon footprint!) that I have flown from Auckland to Tauranga and back on one occasion for work because I didn’t feel I could cope with the drive at the time.
A couple of stops and a stretch on the road to Ngatea could help though if there is no pressure of time.
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And, as an update, privatisation is now very much a part of the Government agenda, despite the pre-elecion promises.
The good news is that employers are divided over it.
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