Response from the AA

[p.dath]

I got this email from the senior policy analyst at the AA today, Mark Stockdale, MStockdale@aa.co.nz.

Dear Philip, thank you for your comments on ACC. I can understand your concern about the increasing registration levies for motorcycles. Our role at the AA is with regard to motoring policy and advocacy and I can give you an overview of the AA’s position on the levy increases and advise that the AA has made submissions to both ACC, and the Parliamentary select committee reviewing associated legislation. We have also met with the Minister of ACC, and ACC (twice) to outline our views.

According to ACC’s consultation document the ACC account is in a mess and severely underfunded. Subsequent legislative amendments have changed the design of the scheme from the Woodhouse era and under the current model ACC must account for future costs of current claims. That means ACC calculates it has a deficit of $13 billion, which must be paid off within the next 5-10 years, hence levies for all account classes are increasing. The AA’s submissions focussed on getting the best outcome for motorists under the scheme as it is currently designed; the wider principles of the scheme are not under review by the current National Government.

However, the consultation documents reveal that motorcycles and mopeds are not covering their ACC claim costs (by a large margin) and so are being subsidised by other vehicle classes, this is not new but the ACC annual costs for motorcycles have increased to around $60m for past and present claims against around $12m collected per year. The ACC consultation document says that even if the proposed increases occur in full then passenger vehicles would still be subsidising motorcycles by $77.65 each. The question is, is this fair?

When we analysed serious and fatal accidents involving motorcycles between 2003-2008, the police determined riders to be at fault in 85% of cases. Common crash causes were loss of control on bends or crossing/turning.

For these various reasons the AA supported an increase in ACC levies for the motorcycle class than for passenger vehicles. The AA is also concerned that the current low registration fee for motorcycles (proportional to ACC cost and risk of injury) sends a poor signal to new riders of their risk in taking up riding and is not a good signal.

BUT: We have advised that the AA is concerned that the increases proposed by the ACC board for motorcycles were too large and will for many be unaffordable and will likely lead to an unwanted increase in unregistered motorcycles and mopeds. Our submission proposed a lower increase and/or for this to be phased in over time (i.e. a number of years).

We also said to the Minister and ACC that there needed to be increased support for motorcycle training, particularly for new riders and that ACC has a vested interest in supporting this as they are paying for the crash costs. The Minister’s announcement last Thursday on the final, lower, levies and $3m fund for motorcycle safety appear to reflect these concerns.

For copies of our submissions on the levies and the legislation review, see: http://www.aa.co.nz/about/submission...overnment.aspx

Regarding the AA Auckland district council AGM, these are usually held in February and the exact date and details will be advertised in the Saturday NZ Herald at least 4 weeks prior. The AGM for the NZAA is to be held in Hamilton on 25 March; a public notice with the details will also be published in the national daily newspapers at least 14 days prior to the meeting. To contact the AA Auckland District Council, you would be best to forward your concerns to the regional manager, Stephen McLellan smclellan@aa.co.nz and ask them to be raised at the next meeting.

[p.dath]

This was my response:

To say that ACC accounts is in a mess would be to pre-support that ACC needs to be pre-funded. I put it to you that this accounting policy change made by the most recent Labour Government is not in the best interests of ACC or those it aims to protect, and that there is in fact nothing wrong with the ACC accounts.

Let me direct your attention to the University of Auckland’s business school which analyses the case for pre-funding, and comes to the conclusion that there is no need for it.
http://www.business.auckland.ac.nz/P...Ffinal1811.pdf
In an interview with Owen Woodhouse, frequently considered to be the founder of ACC due to his significant input into its creation, Owen Woodhouse suggested that having everyone pay for the care off all those injured in a calendar year for all the care they would need for the rest of their life would be like having someone turn up to school and on their very first day asking them for payment for the entire rest of the their education. How could they possible know what that was going to cost?

Pre-funding is most commonly used in the insurance industry, because in insurance you do need to account for the cost of future claims made by current customers. However ACC is not an insurance scheme. It never has been. It is a compensation scheme that was created to replace the Works Compensation Act. Prior to ACC there was significant incentive for insurance companies to not pay out on claims, which frequently resulted in very expensive court action.
The Woodhouse report (Woodhouse himself having been a supreme court justice) noted that often substantial amounts of compensation were used up in legal fees.

So I put it to the AA that it should not be so much backing a change in levies, but a return to the original Woodhouse principles.


Once you drop the pretence of ACC being insurance, and accept (as per the current legislation) that it is a compensation scheme, then you comes back to the original Woodhouse principles that the community (aka, all users) should contribute equally. This is because there is no “risk” in a no-fault scheme. All that merely needs to be done is to collect sufficient funds from everyone to cover the compensation that is required to be paid out (plus a reserve so that the scheme has a buffer in bad times).


I note you make reference that the Police claim 85% of motorcyclists where at fault in accidents. ACC’s only figures are closer to 46%, but ACC only consider injury accidents that require an ACC pay out. If you were to try and attribute risk, and I’m not suggesting you do, then it is clear car owners should be paying for around 54% of the cost of motorcycle accidents.

However, this is not about car or motorcycle users, it’s not about pitching one group of ACC users against another – it’s about the premise that pre-funding is required. ACC currently has an operating surplus of around $900m – it most certainly is not in any financial crisis. The much publicised crisis is nothing more than a PR exercise based around accounting principles.


The AA has generated a lot of distrust among the motorcycling fraternity. I would have to say a lot of AA members have cancelled their insurance and membership over this issue. Having been a long term member of the AA I would like to take a different tact, which I’ll be encouraging other members to adopt.

I intend to get a large group of motorcycling members to attend their district meetings, and make our desires known to the local district councillors. We also intend to quiz those standing for re-election, and I feel we’ll hold a big enough voting block to be able to affect the outcome of any voting, should more people stand for election than seats available.

I’ll also be re-enforcing the very first rule in the AA’s constitution:
“To promote an organisation or association of persons who own motor vehicles or are otherwise interested in motoring.”

So as senior policy analyst, I encourage you to support those interested in motoring, and a return to the original Woodhouse principles. They are as valid today as when the original study was done.

[bogan]

would pay to point out that as a motoring advocay group (or whatever it is they claim to be) they should be able (and obliged) to fact check the figures, such as the complete BS $77 dollar one, especially if such a figure has been repeatedly disputed.

[StoneY]

Well done Phil

Green bling comin your way man
Times like this I bet its a issue of pride to be the site weenie

Excellent post mate, well bloody done
As Bogan points out, the disputed and often proven to be BS 77$ maybe needed to be addressed but really well written reply

Brent

[MSTRS:Me]

This was my response:

Pity you put 'Labour' in there...it was actually the last National Government that introduced the pre-funding (or fully funded) model, and privatised the work account. When Labour took power at the end of '99, they reversed the privatising, but left the motoring account as is.
I'm not blowing a political trumpet, but accuracy is essential when dealing with this sort of stuff.

[Naki Rat]

It would seem the AA is just as willing as the media and others to swallow the statistical BS that ACC and National are spooning out over this issue.
Definitely worth considering motorcyclists taking up membership of AA in force and block voting these pillocks into line

[p.dath]

Pity you put 'Labour' in there...it was actually the last National Government that introduced the pre-funding (or fully funded) model, and privatised the work account.

Oops, I think your right. It was introduced in 1998 by the National Government. The following Labour Government then just increased the levies to speed up the full funding.

[p.dath]

It would seem the AA is just as willing as the media and others to swallow the statistical BS that ACC and National are spooning out over this issue.
Definitely worth considering motorcyclists taking up membership of AA in force and block voting these pillocks into line

I was tossing up putting forward a motion for a constitutional change, so they are forced to be advocates for "motorcyclists", rather than the broader term "motorists" as it says now.

I think they are probably breaking their own constitutional rules. However if AA members express to their regional directors their opinions, then they are likely to take the views to their AGM, and it can become new policy.

And that would truly be a change made from within, using a positive approach.

[StoneY]

I have already suggested AA centers and offices as a valid passive protest target

Imagine if 30 bikers all arrive at once and ask loads of stupid questions, fill in forms to 'join' suddenly realise AA is not pro biker, tear form up and leave

Duration of event 1 hour, stacking up all other customers, LOL

Oh, the images it creates

Anyway, I cancelled 6 insurance policies with AA last month, and when my mebership expires it wil not be renewed, after 8 years of my loyalty has been tossed back in my face

[p.dath]

Anyway, I cancelled 6 insurance policies with AA last month, and when my mebership expires it wil not be renewed, after 8 years of my loyalty has been tossed back in my face

How about you attend one last AA meeting while your still a member, just so you can vote against anyone being elected that doesn't support motorcyclists?

The regional meetings happen in February.

Or you could give your proxy to someone who can attend.

[Swoop]

It is pleasant to see that the AA has just followed the position of ACC.
ACC: "Here, have some propaganda which is backed up with some vague, innaccurate figures".
AA: "Why thank you. The AA will now take this as gospel and proceed with this wonderful knowledge".

[ukusa]

a great letter pdath, well done. It reads well & gets many points through that seem to have gone right over (or through ?) the heads of those at the AA.

One thing not mentioned in either letter is the discrimination in the new rates caused by the cc ratings. I can't see the AA ever agreeing with a cc based car levy, so why have they been quiet on this issue regarding bikes?
They should know as much as anyone that cc ratings are not the be-all and end-all of vehicle speed. 600cc for bikes is not a "BIG BIKE", and in many cases a smaller sport bike will out run a 1200cc or larger cruiser when it comes to speed.
As far as I'm concerned, the open road speed limit is 100kph, so any bike that can break this (which is obviously most) should all be in the same catagory

[p.dath]

a great letter pdath, well done. It reads well & gets many points through that seem to have gone right over (or through ?) the heads of those at the AA.

One thing not mentioned in either letter is the discrimination in the new rates caused by the cc ratings. I can't see the AA ever agreeing with a cc based car levy, so why have they been quiet on this issue regarding bikes?
They should know as much as anyone that cc ratings are not the be-all and end-all of vehicle speed. 600cc for bikes is not a "BIG BIKE", and in many cases a smaller sport bike will out run a 1200cc or larger cruiser when it comes to speed.
As far as I'm concerned, the open road speed limit is 100kph, so any bike that can break this (which is obviously most) should all be in the same catagory

Ixion posted a good break down of accidents by engine size, and found there was no statistical correlation between the two.

Your no more likely to have an accident riding a 100cc bike as you are ride a 2000cc bike.

[Waxxa]

excellent reply p.dath.

bloody brillant....

[yachtie10]

Well done phil
I think their letter reads as having a them and us attitude
so good luck with trying to change from within
my membership has lapsed and im not prepared to pay them for the right to vote. Good luck though ill help if I can