Submission to ACC

[dpex]

This is the first of a number of submissions I intend to make to ACC and every parliamentarian.

I trust you will find it reasonably balanced and worthy of either copying and sending, or taking out bits to use for your own submission.

consultation@acc.co.nz

Submission
ACC Motorcycle Levy Increase.

Submitter:
David Peppiatt
6/80 Bruce McLaren Rd
Henderson
Auckland.
09-8387276


1. Relative Costs Per Claim/Type.

It has been claimed by ACC lawyer Philip Schmidt that the motorcycle levy increase was justified because motorcyclists' claims were disproportionately more expensive than claims by car drivers.

Yet the statistics prepared by ACC and available at HTTP://tr.im/BV1k and BV8c testify to something quite different.


Car Occupants:
- 8525 active claims
- $208,305,000
- $24,434 per claim

Motorcyclists:
- 3173 active claims
- $62,523,000
- $19,704 per claim

These official figures clearly demonstrate that the cost, per claim, by motorcyclists is, in fact, nearly 20% lower than the per-claim cost by car occupants.

Tim Macindoe (Nat Hamilton West) asserts the total ACC payout was $24 billion for the 2008/2009.

Of that sum, motorcyclists account for just 0.002%, car drivers 0.0086%, and collectively 0.011%.

It follows that 99.98% of claims are being made by persons other than motorcyclists and car occupants, collectively. So why are we being so shabbily penalised?

Now allow me to bring your attention to two more types of road-user whom, collectively, account for 0.0015% of all ACC claims, yet pay not one cent in road-user levies.


Cyclists:
- 567 active claims
- $12,573,000
- $22,174 per claim

Pedestrians:
- 1115 active claims
- $24,494,000
- $21,967 per claim

Surely, if ‘road-users’ as a generic group are being targeted, then ‘all’ road users should pay an equal share for all road-user claims against ACC?

However, the greatest anomaly is found in the proven fact that 99.98% of all claims against ACC are made by persons when ‘not’ using the roads in any way whatsoever.

Agreed, you have announced your intention to raise annual ACC payments from all tax-payers by around $300 per year. But we bikers and car-driver/occupants are also taxpayers, so we face a double penalty.

Such is manifestly inequitable since we, as a total group represent a miniscule proportion of ACC claims yet are to be severely penalised.

Social and Financial Pressure Leading To Unintended Consequences.

By setting the new levies at the levels being suggested two unintended consequences will result.

1. The criminal fraternity will find a whole new field of endeavour by producing and selling counterfeit warrants and registrations. These are freely available now, from almost any pub in New Zealand, but rarely used by other than the die-hard criminal types. But increase motorcycle levies by anything more than car levies and you will see a wholesale supply of such counterfeits flood the market.

2. Many bikers are seasonal recreational riders who prefer to ride during the summer, only. Whereas, at the moment, most maintain registration throughout the year, soon many of this type will register for only the three summer months then put the motorcycle registration on hold.

Some will kick over the traces and ride anyway, but most will want to remain good, law-abiding citizens, and ride for only three months of the year.

And so, such seasonal riders will crank up their bikes and head out onto the roads with only the practice they gained from last season’s run. Thus, they will become an even greater risk.

3. There are over 483,000 registered motorcycle licences in New Zealand. As a group they tend to be slightly reactive and cherish their freedom. Sickened by the evermore pervasive ‘nanny-statism’ of Clark’s lot, many of them voted National (there is an existing poll, somewhere on Kiwibiker. Co.nz, regarding this vote shift) presuming National would be a far more reasonable government.

Clearly, this is not to be the case.

Penalty V Reward

Nowhere within the bizarre suggestions of levy increases is there any mention of a no-claims bonus. In other words the levy increase suggested is simply a cynical attack on a whole group of road users, irrespective of their claim history.

I, for one, have never made an ACC claim for any road accident during over 40 years of driving/riding yet, statistically I am to be treated as as great a risk as all other car drivers and motorcycle riders.

My vehicle insurer sees me as an excellent insurance risk and thus provides me with maximum policy discounts.

Why does the proposed ACC model ignore my exemplary driving/riding history?

Multiple Vehicle Owners.

I own two cars and one motorcycle. Thus I get to pay three lots of excess ACC levy when I register each vehicle. But I can use only one of these vehicles at any one time.

There are many bikers who own multiple bikes, yet they too can use only one at a time. Thus I am paying three times for the one event horizon.

My Submission

It is my submission that the proposed ACC levy increase for motorcyclists is cynical, ill-considered, and demonstrably undemocratic, and is based upon false use of statistical data.

Furthermore, I submit the individual, not the vehicle, should be subject to ACC levy, if in fact it can be justified that less than 1% of all ACC claims are made by road users and therefore road users should be separated and charged more.

Frankly, I cannot see the justice in such an arrangement.

Kind regards
David Peppiatt.

[Tink]

Statistics speak for themselves... I can say in 23 years of working I have never claimed ACC either, have a excellent rating in all my insurances and a AA credit rating... yet I can't borrow money because I put my children first... there are many many faults in the system, and this as you say proves to be another one.!!

[Jogger]

Well said, dpex.

[Mystic13]

Can we leave this thread chatter free and just have people post the letters they've sen in so others of us can cut and paste without having to read through tons of pages? Please.

[Mystic13]

Email to: consultations@acc.co.nz

Hi

I wanted to advise that today I put my motorcycle registration on hold in response to your proposed levy increase based on poor statistics. There is a huge groundswell of opposition to this proposed increase on the basis it is unfair.

I wanted to address;

Revenue Drop
Questionable Statistics - Motorcycle Accidents
Questionable Statistics - Rate of Injury in relation to cars
Questionable Statistics - Revenue from Motorcyclists
Questionable Statistics - Amount cars would have to pay
Outcome Wanted


Revenue Drop

ACC have assumed that this increase in fee will see an increase in income on a proportional basis. Because of the excessive and unfair nature of the fee I believe this will not occur. I believe many will put registrations "On hold" fully or partially throughout the year and ACC will not see the increased income they had anticipated. I have ... road registered bikes ... of which I will now put on hold fully so you will lose that income. For the odd time I ride the others it will be cheaper for me to chance the odd ticket. I believe your strategy was misjudged and nothing short of a full withdrawal will help deal with the ill will you've generated. To meet your needs you should look to other revenue sources.

Questionable Statistics - Motorcycle Accidents

ACC have quoted motorcycle accidents but there is no separate statistic for road registered riders and non road registered riders. When an off road rider goes to the doctors or hospital he is recorded as a motorcycle injury. Having ridden both road and off road I estimate that at least 50% of your injury costs are attributable to non road registered riders and as such your claims and proposed increase are totally unwarranted and certainly Kiwi's get pretty annoyed when someone or some corporation is trying to rip them off. You've made an error of judgement based on poor statistics. I urge you to cancel the increase fully until you have relevant data.

Questionable Statistics - Rate of Injury in relation to cars

Figures have been bandied around of 16 - 18 times more likely to have an injury over car drivers. This is absurd. From your figures on a per vehicle basis this is closer to 3 times with the actual cost being closer to the same (edit - from the post above it's less). The 16-18 times was derived by then taking the average number of kilometres each travel and with the car travelling more then multiplying the actual statistic by that figure. That is wrong. When you then take into account that 50% of those injuries don't relate to road registered motorcycles that figure is reduced. Then just under 50% of those remaining injuries are caused by cars. At this point there seems to be serious manipulation of the statistics or just plain errors made that mean this information is a long way off correct. This is incredibly unfair and I think the fair thing to do is to cancel the idea of any increase and seek AC revenue elsewhere.

Questionable Statistics - Revenue from Motorcyclists

You have listed the revenue from motorcyclists as being a certain figure. If I was insured privately they would assess my risk profile and I would be charged on my greater risk factor. The majority of motorcyclists own cars and in a survey I ran this figure exceed 99%. On this basis you are getting revenue for the motorcyclist from his car and motorcycle registration. On this basis alone the increase is not justified. When you consider that some of us own multiple cars and motorbikes in my case ... cars and ... motorbikes it means I am severely penalised for my vehicle ownership. The only fair system should be a levy on fuel. Motorcycle ACC levy's should drop to the same rate as cars so that would mean a reduction in our current levy on motorcycles.

Questionable Statistics - Amount cars would have to pay

Nick Smith has thrown around the figure of $77 extra(edit - per car if loaded on car drivers). This would mean based on the best stats I can find an income of some $202 million. This is 3 1/2 times motorcycle injury cost and further it is 7 times the road registered motorcycle cost or 14 times the actual at fault road registered motorcycle claims. This is a misleading statistic. I am becoming increasingly concerned that this is more than just honest errors and an attempt to whip up hysteria. Is this a matter of seeking further income or is it a case of pushing toward getting private insurers involved?

ACC - No Fault System

ACC have not targeted any other group and it's unfair to target us as a group. Not only are they labelling us as an at fault group they are also wanting us to pay for injuries to non road registered motorcycles and pay twice through our car and motorcycle registrations. So we are being asked to pay over and above our claims when other groups are ignored. To lump these together would be the same as lumping most sports injuries under cars. I would be more than willing to have an at fault system because I have not made one ACC motorcycle claim yet I have ... road registered motorcycles and ... cars. This attributing of fault and targeting is unfair, unwarranted and based on poor statistics and should be abandoned.


Outcome Wanted

1/ I want to see the government increase the period that it builds these additional funds over from 5 years to 15 years at best and 12 years at worst. This would dramatically reduce increases. I am aware that these reserves would likely be invested in government bonds and provide a cheap source of government funding with Bill English recently stating the government was looking for $40 Billion. The ACC scheme looks like it will provide some $12 Billion over 5 years.

2/ I want the proposed increase to be cancelled and further that the Motorcycle ACC fee is reduced and bought into line with Cars. This would mean that as motorcyclists own a car they are individually paying double the car fee.

3/ I suggest ACC look at increasing the fuel levy as a fair and equitable way of having consumers pay.

4/ I would urge ACC to accept that they will not get the revenue increase they are expecting from the proposed increase and that the clearly unfair nature of it means they are alienating a section of the community. This proposed increase based on poor statistics shows incredibly poor judgement.


Kind regards

[slofox]

This sent to every MP in the country...courtesy of the list posted in here somewhere...several replies so far. Some just acknowledge receipt of the email. National members reply with a stock formula - same from each of them - obviously toeing the party line. Labour reply snipes at the government and says they are trying their best to stop the changes. Most sympathetic replies from Green members (bikes = lower carbon footprint etc) as might be expected.

Dear MP

I have spent the last few days reading a lot of material about the proposed ACC levy increase for motorcycles. Certain things have become clear to me and some of these, I think, need to be addressed.

First Issue: There is considerable debate about the figures that have been quoted in the proposals. Claims by the Minister do not match up with accident figures from ACC itself and from NZTA. I cite you the following two examples. There are more but I don't want to bog everyone down in a myriad of figures:

1. In ACC's Injury Statistics 2008 report (http://tr.im/BV1k), ACC details claims against the Motor Vehicles account - the virtual pool that gets claimed upon whenever a road-registered vehicle is involved in an accident. The report gives statistics for the number of new claims, the number of active claims and the cost of those claims. As the report breaks down the claims by vehicle type, it's easy to compare the cost of claims:

Cyclists:
- 567 active claims
- $12,573,000
- $22,174 per claim

Pedestrians:
- 1115 active claims
- $24,494,000
- $21,967 per claim

Car Occupants:
- 8525 active claims
- $208,305,000
- $24,434 per claim

Motorcyclists:
- 3173 active claims
- $62,523,000
- $19,704 per claim

It would seem that motorcycle claims are not as expensive as the Minister suggested.


2. Dr Smith claimed that motorcyclists are 16 times more likely to be involved in an accident. In the Ministry of Transport's Motor Vehicle Crashes in New Zealand report (http://tr.im/BV8c) the 2008 casualty rates for the whole vehicle fleet are given as:

- 1.1 deaths per 10,000 vehicles
- 47 injuries per 10,000 vehicles
- 34 injury crashes per 10,000 vehicles
- 8.6 deaths per 100,000 population
- 356 injuries per 100,000 population

Section 4 of the above report is dedicated to Motorcycle Casualties and Crashes and gives the 2008 motorcycle casualties as 1396 injured, 50 killed in 1378 separate incidents. The total number of road-registered motorcycles (which includes mopeds) is given as 96952. So for motorcycles only, the statistics are:
- 5.2 deaths per 10,000 motorcycles
- 144 injuries per 10,000 motorcycles
- 142 crashes per 10,000 motorcycles

So deaths run at just under 5 times the average, injuries at just over 3 times the average and crashes at 4 and a bit times the average. Not 16 times though.

Perhaps they're using another measure of probability. By licence-holders, maybe. According to the Ministry of Transport's Driver Licence and Vehicle Fleet Statistics report (http://tr.im/BVoh) as of June 2008 there were 3150533 car licences in circulation and 483142 motorcycle licences in circulation.

- Car injury crashes per 10,000 car licences: 24.2
- Bike injury crashes per 10,000 bike licences: 28.2

Still not 16 times as likely. Not that different in fact.


Both of these sets of figures indicate, at best, some degree of doubt over what is being claimed regarding the costs of motorcycles to ACC. I for one, would like some clarification please.



Second Issue: The proposal to levy according to engine size does nothing for the credibility of the proposals. Engine size is not always directly correlated with power output. As an example, I ride a Suzuki SV650S. This is a V twin engined machine of 645cc's producing around 72bhp. The engine size dictates that it will pay a higher levy than a bike like the Yamaha R6. The R6 is 599cc but produces around 127bhp - that's around 76% MORE power than the SV and yet it will pay a lower levy under current proposals. As I said, this undermines the credibility of the proposals and frankly, makes the rules look stupid. If any differentiation is to be made between categories of bike, it should at least be based on something with some credibility - like power to weight ratio, not just plain old engine size. We have tried to find reports on frequency of accident vs engine size but figures seem to be incomplete. The only figure we can find is a modal engine size of 250cc. Not 1000cc or any other size.
My own feeling is that the levy should be standard across all motorcycles and should include scooters and mopeds as well. Falling off any bike hurts, regardless of engine size. I am appalled at the number of scooter riders I see who dress in shorts, a T shirt and jandals when riding. Their only protective gear is a helmet in many cases. Many of them don't even wear gloves. This is just plain crazy in my opinion. I won't even go 1km to the shop without donning the whole cow-suit, boots, helmet, gloves etc. Maybe we need to educate about safety gear...


Third Issue: This is more general and relates to the cost of the ACC itself.
I recently heard it said that one of the units within ACC consumes $8.00 internally for every $1.00 it pays out to its therapists (this figure from one such therapist). If this is true for that one unit, what are the figures like for other subdivisions within ACC? How much of the levies we all pay go on administration within the bureaucracy? Should the figure above be accurate, then we are in the appalling position of having 89% of a unit's budget spent on internal administration and only 11% on the clients.
The current government, during its election campaign, made much of the oversized public sector in New Zealand and its plans to remedy this problem. So let's take a long hard look at ACC shall we? Perhaps internal costs need to be trimmed back. Then the need for levy increases might be less.