ACC ACCidentally discloses intention to become an insurance company

[James Deuce]

James can you clarify was this a $700 million dollar dividend to the government or a $700 million paid in tax?

I guess you could call a levy a kind of tax.

[FastBikeGear]

I guess you could call a levy a kind of tax.

No.

Some of the levy goes into the ACC motor fund.

I assume the ACC pays income tax and I am trying to clarify if the 700 million was income tax or a dividend.

[Winston001]

James can you clarify was this a $700 million dollar dividend to the government or a $700 million paid in tax?

The ACC investment fund made a profit and $700 million was the tax on that profit. The Cullen Fund paid tax and also the Reserve Bank. I know it seems weird to have government agencies and SOEs paying tax but the result is they are placed on a level playing field with private businesses.

Additionally SOEs pay dividends to the government but I don't think ACC is in this category.

Even if you are unemployed you will still need to pay an ACC premium if you want personal injury cover and it will still be compulsory. Can't get blood out of a stone you say. No but you can deduct it directly from your unemployment allowance.

Cover is already provided for in tax on the benefit - no reduction involved. No loss-of-income payment of course if you don't have a job but that is logical. Otherwise a canny unemployed person would be looking for "accidents" all of the time.

[FastBikeGear]

The ACC investment fund made a profit and $700 million was the tax on that profit. The Cullen Fund paid tax and also the Reserve Bank. I know it seems weird to have government agencies and SOEs paying tax but the result is they are placed on a level playing field with private businesses.

Additionally SOEs pay dividends to the government but I don't think ACC is in this category.



Cover is already provided for in tax on the benefit - no reduction involved. No loss-of-income payment of course if you don't have a job but that is logical. Otherwise a canny unemployed person would be looking for "accidents" all of the time.

Winston, thanks for the clarification on the $700 million.

It seems that you are suggesting under the new privatised personal injury insurance scheme that we are discussing in this thread that if you are on the dole that your motorvehicle ACC levy could be paid to the insurance company from the tax on your dole?

[Winston001]

Winston, thanks for the clarification on the $700 million.

It seems that you are suggesting under the new privatised personal injury insurance scheme that we are discussing in this thread that if you are on the dole that your motorvehicle ACC levy could be paid to the insurance company from the tax on your dole?

Ah - I don't believe there is or will be a privatised personal injury scheme. For one thing the coalition government would not have the support to pass the required legislation.

However we can expect to see work compensation cover being offered by insurance companies in competition with ACC. It happened in 1998 and society as we know it did not end. There was no right to sue. Nevertheless I'm opposed to this because its unnecessary.

An unemployed person who drives a motorvehicle relies on the owner to pay the registration. Regardless, that unemployed person is covered by ACC from the motorvehicle account. Just as they are covered by general taxation for childbirth, appendictus etc.

Outside the workers account and the motorvehicle account, we all contribute 0.5c/$ in tax to ACC to cover sports/household etc injuries.

[FastBikeGear]

Ah - I don't believe there is or will be a privatised personal injury scheme. For one thing the coalition government would not have the support to pass the required legislation.

However we can expect to see work compensation cover being offered by insurance companies in competition with ACC. It happened in 1998 and society as we know it did not end.

Winston I think you are right privatisation is a done deal on work compensation.

However I am not so sure you are right about your first prediction. They have already got rid of the core principal of ACC 'no-fault cover' and i think very few people would have thought they would get support for that!

From the Injury Prevention, Rehabilitation, and Compensation Amendment Bill 90-1 (2009), Government Bill

"Enable risk rating in Motor Vehicle Account for both vehicles and vehicle owners

The Bill will allow regulations to be made for risk rating in relation to Motor Vehicle Account levy rates. Risk rating regulations for motor vehicles, registered owners of motor vehicles, and persons who hold trade licences under section 34(1) of the Transport (Vehicle and Driver Registration and Licensing) Act 1986 will link safety behaviour to levy payments, for example potentially offering no-claims bonuses for vehicle owners, or allowing discounts for vehicles with high safety ratings. These categories are consistent with section 216 of the IPRC Act."


So why is this clause critical?

Motorcycle levies make up 0.3% (12.5 million out of 4.3 Billion) of total revenue for the ACC.

So why focus on this?

Why the urgency to become fully funded?

What could be the possible strategy that requires risk based levies and fully funding?

To open the way for privatisation or to triple the revenue from 0.3% to 0.9% of their revenue?

[Winston001]

However I am not so sure you are right about your first prediction. They have already got rid of the core principal of ACC 'no-fault cover' and i think very few people would have thought they would get support for that!

From the Injury Prevention, Rehabilitation, and Compensation Amendment Bill 90-1 (2009), Government Bill

"Enable risk rating in Motor Vehicle Account for both vehicles and vehicle owners

The Bill will allow regulations to be made for risk rating in relation to Motor Vehicle Account levy rates.......


So why is this clause critical?

Motorcycle levies make up 0.3% (12.5 million out of 4.3 Billion) of total revenue for the ACC.

So why focus on this?

Why the urgency to become fully funded?

What could be the possible strategy that requires risk based levies and fully funding?

To open the way for privatisation or to triple the revenue from 0.3% to 0.9% of their revenue?

Nicely argued and that is a good question. I'll suggest some answers which you needn't accept.

1. Fully funding ACC has been government policy for 10 years. Its not a new idea. The reason is the longterm cost of ACC is projected to be too high for a shrinking taxpayer base. Same problem incidentally with old age pensions which is why we have the Cullen Fund and Kiwisaver.

2. No fault does not equal no risk. People in high risk jobs pay much higher ACC levies than office workers and always have.

3. Why pick on motorcycles? It's easy. Logically skateboarders, cyclists, rugby players ad infinitum should also be levied but there is no simple way to do it. Vehicle registration makes us easy pickings. And we do get hurt a lot........

Incidentally truckies also face a $250 ACC increase and we are being a bit selfish forgetting that. Bikers aren't the only ones in the pot.

[FastBikeGear]

Nicely argued and that is a good question. I'll suggest some answers which you needn't accept.

1. Fully funding ACC has been government policy for 10 years. Its not a new idea. The reason is the longterm cost of ACC is projected to be too high for a shrinking taxpayer base. Same problem incidentally with old age pensions which is why we have the Cullen Fund and Kiwisaver.

2. No fault does not equal no risk. People in high risk jobs pay much higher ACC levies than office workers and always have.

3. Why pick on motorcycles? It's easy. Logically skateboarders, cyclists, rugby players ad infinitum should also be levied but there is no simple way to do it. Vehicle registration makes us easy pickings. And we do get hurt a lot........

Incidentally truckies also face a $250 ACC increase and we are being a bit selfish forgetting that. Bikers aren't the only ones in the pot.

I have to return the compliment and say nicely put. Unfortunatey I also own a truck!

I think many people have over looked the point you make that 'no fault' can be interpreted as not meaning the same as 'no risk'.

[Hawk]

read the first sentence, did you notice anything.............................

http://www.google.co.nz/#hl=en&q=acc...533f3836616102

[R6_kid:Me]

funny how it somewhat contradicts the leading sentence on the actual page:

"The Accident Compensation Corporation (ACC) provides comprehensive, no-fault personal injury cover for all New Zealand residents and visitors to New Zealand."

It's meant to be an Accident Compensation Corporation, not an insurance company.

[Slyer]

<meta content="MSHTML 6.00.2900.3429" name="GENERATOR" />
      <META NAME="KEYWORDS" CONTENT="ACC, Accident, New Zealand, No-Fault, Injury, Prevention, Rehabilitation, Injury Prevention, Compensation, Care, Recovery, Community">
    <META NAME="DESCRIPTION" CONTENT="New Zealand’s accident compensation scheme provides 24-hour no-fault personal accident insurance cover."> 

They put that there in the source, not google.