$220,000. That's what the levy hikes may cost YOU

[Ixion]

Just to put the hikes into context, I did a calulation of the lifetime value of an increase of $500 (new levy $750 less, roughly present levy).

For a 25 year old rider who means to keep riding until 65 (though why you'd give up then buggered if I know), the total cost is $222000 odd

For a 40 year old ditto, it's $50000.

I've assumed 10% as a combined interest and opportunity cost value, which is highish , but in line with the numbers ACC are using .

Multiply appropriately for multiple bikes.

Are your eyes watering ?

[Reido]

couple typos there? 40 years times $500 = 20,000
plus 10% . 22k

i fail XD

[Ixion]

The marvels of compund interest , over 40 years. Same reason why your mortgage ends up costing so much. the 10% is every year on the accumulated total

[Cheshire Cat]

Don't worry the American banks are going to lend the world billions more dollars soon anyway so you will be getting pay rises and what not.


unless you want to rebel and blow them up Guy Fawkes would love you for that.

[Ixion]

Fuck. i forgot to allow for inflation. back to Excel

[Reido]

The marvels of compund interest , over 40 years. Same reason why your mortgage ends up costing so much. the 10% is every year on the accumulated total

wowzers didnt think of that

[Ixion]

Woo. now MY eyes are watering.

Assuming a 10% interest and opportunity cost, and a constant 10% rate of inflation (I now, highly unlikely both, but no more so that ACCs figures) -

By the time our 25 year old rider gives up at 65 , he'll be paying a $34000 levy annually, and the cost of the levy hikes in total will be $1.25 MILLION !

The 45 year old will be paying $4600 when he gives it away and in all will have been pinged for $76000

[Ixion]

Cutting back to a more real world 7% interest/opportunity cost, and 5% inflation gives

25 yo = $5300 levy at the end and a lifetime cost of $266000
40 yo = $1900 at the end and lifetime cost of $35000

[TerminalAddict]

are these NPV and FV calcs?

or opportunity cost calcs? (assuming the money is put in a bank and compound interest is earned)

[riffer]

It's not that easy.

You also need to allow for the effect of decreases in crashes, the effect of variation in the return of the investment portfolios and pollies changing ther minds about how the scheme works.

By the way, what do you REALLY think will happen to ACC levies once the scheme becomes fully funded?

[Ixion]

Opportunity cost basically. I started out with FV then realised I needed to allow for inflation which FV doesn't easily do. And of course I could have made the number even bigger by asuming the opportunity cost related to a inflation proofed investment vehicle (eg land banking or something).

Please don't take it too seriously.

Extrapolation over a 40 year time period is meaningless. And very riders would keep riding continuously for 40 years.

let alone whether we still have ACC or a country even by then.

I really just wanted to show that if you take wild assumptions and throw them into calculations you can asily come up with big frightening numbers.

Which is exactly what ACC have done.

[Voltaire]

I was looking at this from an oppressing a minority view.....

"Non-discrimination and minority rights
You have the right to freedom from discrimination on the grounds of sex, marital status, religious belief, ethical belief, colour, race, ethnic or national origins, disability, age, political opinion, employment status, family status, and sexual orientation."

Register BRONZ as a church, all KB members join up, then we claim religious oppression. ( also probable tax deductable...don't tell Brian Tamaki.)

or

There has to be some technicallity of a legal kind....

Something like:

" Why is the Government pricing off the road the very type of vehicle that the rest of world is embracing as reducing carbon emissions"

" They should be encouraging the use of fuel efficient transportation not oppressing it"

" raise the ACC on cars and get them off the road as they are causing the majority of ACC claims in New Zealand"