Levy hikes prelude to privatisation

by frog

Nick Smith has announced the ACC levy increases.  They are somewhat less than initially flagged, but still a substantial hike.  A person earning the average wage who owns one car will be paying an extra $178.50 in ACC levies next year.  And most of it is unnecessary.  As Kevin Hague pointed out yesterday, ACC’s revenue last year was $4.5 billion, which is $1.5 billion more than it spent on claims.

NZ Council of Trade Unions economist Bill Rosenberg has calculated:

  • The increase in the earner’s levy needed to fund the cost of non-work accidents is 4.7%, but the Government has increased this by 17.6%.
  • The employer-funded work account needed an increase of 3.6% to fund work accidents. Instead the employer’s levy is increasing by 12.2 %.

The reason for the difference?  It’s the Government’s insistence that all future costs on current claims be financed from current levies.

We don’t fund the public health system like that.  We don’t fund the education system like that.  And even though we partially pre-fund NZ Superannuation through the Cullen Fund, no government has ever suggested it be fully pre-funded.  So why fully pre-fund ACC?

The only answer I can come up with is to prepare it for privatisation.


If it is made to work like an insurance company, then it’s a lot easier to flog bits of it off to insurance companies some time in the future.  Levy increases and entitlement cuts will undermine public confidence in ACC and soften up public opinion for the privatisation agenda.

frog says

Published in Economy, Work, & Welfare by frog on Fri, December 11th, 2009   

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