Quote Originally Posted by wingrider View Post
Original quote scanned from dom-post

Why ACC hikes are necessary

David Rett and Kirn Naylor (Letters,
Nov 24) suggest some ACC levy
payers, mainly motorcyclists, are be-
ing singled out for levy increases.

That's not true. ACC proposes
increases for almost all levy payers
this year. That will include others
with high risks, such as cyclists or
rugby players, who will pay
increased levies through the
earners' levy that all workers pay to
cover non-work injuries. Mr Flett
asks why ACC is increasing levies
when it has investment assets of $11
billion. The answer is that these
assets are needed to cover ACC's
$24b in future liabilities.
ACC uses its investment and levy
income not just to cover new claims
each year but also to cover the
ongoing costs of previous claims.
ACC's future liabilities are growing
faster every year than its investment
assets, meaning increased income
also has to come from levies.
ACC is, of course, also trying to
control the liability growth.

Kim Naylor suggests levies have
reached too high a level. ACC has
acknowledged the increases might
be unpalatable, especially in the cur-
rent economic climate. However, we
remain convinced that levy
increases of this scale are needed to
ensure the scheme's sustainability.
KEITH McLEA
General manager, ACC

I note he singes off with no mention now of ACC Insurance.
Well - it has inspired me to make a reply:

To the editor

I note Mr McLea has taken the time to reply to some of the points I raised and I think him for it. As usual, however, the devil lies in the (unsaid) details.
Two of his assertions bear closer examination. The first that motorcyclists are only amongst a raft of levy payers facing increases. The unsaid detail is that only motorcyclists are being faced with increases of over 300% and they are the ONLY levy payers still recommended to have an increase designed to hit the 2014 timeline for full funding. All other payers in the motor vehicles account have had their timeline pushed out to 2019.

The second assertion is that the 11 billion dollar investments only go part way to meeting 24 billion dollars of liability. The unsaid detail is that the liability is only a future PROJECTED liability based on a range of assuptions including an investment return using current recession-hit rates of return. I cannot speak to Mr McLea's pessimism about any economic recovery but the fact remains that the liability could quite easily be less. As a universal publically funded compensation scheme it would seem unlikely that ACC's income stream is going to suddenly dry up.
That only becomes a risk if it was sold to become a private insurance scheme.
Surely not?

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