More AND Less (Updated)

“There needs to be a balance between cutting ACC entitlements and increasing levies, Prime Minister John Key says.”

The Herald tries to spin this as ACC choice – pay more or get less, says Key. Unfortunately, they are being a little overly optimistic. What Key is actually saying is that we will be paying more for ACC and be getting fewer benefits. All that is left is finding a happy medium between increased levies and decreased “entitlements” (horrible word!).

As I have argued in the previous post, ACC have been seriously underfunded for nearly a decade – basically as soon as Labour reversed the rather timid reforms of National and re-introduced lump sum compensation. It was then made worse by a seemingly never-ending stream of extra benefits granted without a sign of significant fee increases. We were proudly told that ACC pays out 85% of the money that it takes in, without any consideration given to whether this was ever sustainable (and this from a government that was always talking about sustainability!) We were proudly told that ACC was the cheapest form of comprehensive accident insurance in the world, without once being told that the liabilities were increasing by leaps and bounds. We were told that ACC claims were paid far faster than the previous tort law system, without anyone bothering to point out that the vast majority of accident insurance claims were paid out as fast or faster than ACC. It was only liability claims for compensation that usually had to go to the law. We were proudly told that our accident compensation scheme was the envy of the western world, yet, curiously, no other country has adopted it.

Yes, there are a lot of myths about ACC, but the biggest myth of all is that it was anything except an insurance scheme. The previous Labour government attempted to turn it into a de facto welfare scheme, but that is simply not possible without enormous taxpayer contributions. In reality, ACC is still a monopoly insurance scheme, and, like all insurance schemes it must meet its costs. And like all insurance schemes that is usually done by increasing premiums or reducing benefits, or, when the going gets tough, both. Because it is a monopoly, it can get away with both things at the same time, and the general public have little choice but to lump it or do away with ACC altogether.

I favour the latter option.

No matter what you say about the merits, or lack of merits, of ACC, one thing is abundantly clear to me. The devolvement of accident liability onto the taxpayer has made New Zealanders absurdly casual about accidents and, at the same time, completely paranoid about the most trivial of problems.

I see it in the long line of minor accidents that come through my door; minor cuts, grazes and bruises that our mothers would have cleaned and dressed themselves.

I see it in the ludicrous sight of yet another sports injury in a middle aged man with dozens of previous injuries from the same sport. He is safe in the knowledge that the taxpayer will support his reckless behavior.

I see it in the carelessness of the electrician changing the strip lights in our rooms, without turning off the electricity, or bothering to use a step ladder. ACC might be a welcome break – literally.

I see it in the workman with his protective goggles and ear-mufflers draped around his neck. His eyes and ears are “protected” by ACC.

I see it in the behavior of the previously injured, who do not change their behavior, or their work.

I see it in those who are recovering from injuries who re-injure themselves in the most stupid and most obvious fashions.

I see it in the simple statistic that New Zealand has nearly double the work-injury rate of Australia.

Nick Smith would do New Zealand an enormous favour by scrapping ACC immediately. Instead,  he will fiddle with the “entitlements” and increase the reach of his hand into our pockets to fund the Accident Carelessness Causer.

Addition:

And today Nick Smith announces we will be paying more for less. I must admit. I quite like the way Smith has given the figures with and without the legislation reducing benefits. At least we know where we stand.

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