Levy hikes prelude to privatisation

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.

2 Comments Posted

  1. Well the equivalent of ACC was Privatised in Australia, but with the notorious tricks and denials employed by Insurance Companies there, their system became inaccessible to the average worker (legal costs).
    This necessitated a further Law change where these cases were handled, in bulk, by Pro Bono work through the Major Law Firms.
    The upshot being, that nothing changed much, that Costs were every bit as great (or little) as they were before everyone had wasted a huge amount of time and money in changing the system to begin with.
    Efficiency can only be improved by removing incompetent Doctors (and other Gravy Train Paramedics) from the system.
    A lot of the Great Holy Cows of Medicine were reduced to level of well, normal Human Responsibility and honesty – so the Table of Maims was substantially reduced instead by a cynical Government.
    But an underlying equation remains the same – impoverish your people – wreck your economy – there is no way around this equation.
    And one would hope that our Politicians are bright enough to realize this

  2. I dont see how we poor workers can afford this… It’s tight enough as it is with regular hikes on prices of everything but not on the wages we get paid…

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