ACC “crisis” was all in Nick Smith’s head

by frog

Remember the financial crisis with ACC?  Remember Nick Smith describing ACC as “technically insolvent”, a claim that was rubbished at the time by NZ Herald economics editor Brian Fallow and actuary Jonathan Eriksen?  Remember the appalling Bill to restrict ACC cover and slash entitlements that was pushed through Parliament despite overwhelming opposition from submitters.  And remember the ACC levy increases that are about to impact on all New Zealanders. 

Well, it turns out that the only crisis with ACC was the one in Nick Smith’s head.  Last Thursday Smith appeared before Parliament’s Transport and Industrial Relations Select Committee to answer questions about ACC’s budget appropriation: 

[ACC] would make about $1.5 billion from its investments this year, he said, and the total surplus would be about $2 billion because of a drop in the cost of claims, better rehabilitation rates and cuts to administration costs. 

That’s right, a $2 billion surplus, and that’s before the levy increases and entitlement cuts have any impact, as they are only now beginning to phase in. 

Meanwhile, the Government continues to roll out proposals to further cut ACC entitlements, including this pernicious proposal that will leave thousands New Zealanders whose hearing has been impaired by accident or workplace noise unable to afford hearing aids. 

The real agenda is clear – get ACC making mega-surpluses in order to facilitate flogging bits of it off to the Government’s mates in the insurance industry.

frog says

Published in Economy, Work, & Welfare by frog on Mon, June 28th, 2010   

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