To: Hon. Dr. Jonathan Coleman
Subject: The Unfair Nature of ACC Fees and other taxes
I know that it's not your portfolio, but I'm contacting you as my local MP, about the inherently and blatantly unfair nature of ACC fees.
My understanding is that the size of the levies is supposed to be related in some way to the associated risk. I also read that ACC fees had been reduced, or were supposed to be, due to the enormous excess in recent years of fees over outgoing payments.
Why is it then, that even though I can use only one (1) vehicle at a time, I nevertheless have to pay two (2!) lots of ACC components on my vehicle registration?
I use a motorcycle during the week to travel from Chatswood into the Auckland CBD, due to the abomination that is the only T3 Transit lane in NZ, so that's a total of 2.5 hours a week I am actually being 'risky'. For the privilege of being risky, I pay $427.18/year in ACC fees.
Of course, this is in addition to the ACC fees my computer software company owner employers pay on my behalf, in case I were to get RSI or the like.
By the way - I am 56 this year, not a "born again biker" (having been riding for over 40 years).
Occasionally I use my wagon on the weekends to fetch groceries or other materiel. I bought a very fuel-efficient late-model VW diesel, so the savings I make due to its thriftiness (which also benefits NZ's balance of payments) are more than entirely negated by a combination of paying 5.8c/km
RUCs (the same as a 4.5 tonne diesel truck), and $311 in ACC fees. Yay.
Yet another unfairness in the way we are taxed: classifying small, fuel-efficient diesel vehicles in the same category as trucks.
Way to go. Not!
Why can't the government at least shy away from professing to be fair, and come up with a more equitable system? Like, perhaps licencing the individual?
I was reading last night on a local biker forum that many of my fellow bikers are equally bemused by the government on the one hand talking about being fair, while using the other hand to help themselves to an apparently captive population's hard-earned wages in order to fix the results of their poor accounting skills?
Many of these guys (and girls) are enthusiasts, so have more than one bike (and sometimes one or more cars as well), so they too have to pay multiple ACC fees due to the increased danger of them travelling by several vehicles at the same time...
Anyway, that's enough ranting. I know the Government tries hard to balance the books, and in the unlikely event this year brings a change in our overlords it's very unlikely to be accompanied by any favourable changes to our tax burden. However, I have a strong sense of justice and what is / is not fair, and even if I was paying this tax elsewhere in order that the books could be balanced, if it was at least justified by some logic, where the fees were proportional to the risk, it would make me less grumpy and ranty. I'm sure that would make my wife and mutant offspring very happy.
Sincerely,
Mr Ranty
His Reply:
Thank you for your email. I contacted the office of Hon Judith Collins, Minister for ACC regarding your concerns and I was provided with the following advice.
“All levies received from motor vehicles (including motorcycles) go directly into ACC’s Motor Vehicle Account to fund all injuries that occur on public roads in New Zealand. This account is funded from the petrol levy and a levy collected with the motor vehicle licensing fee. When assessing levy rates, ACC calculates motor vehicle levies based on the level of risk that a particular motor vehicle group bears, and the costs of accidents involving that group. ACC also has to consider the lifetime cost of claims. The ‘life’ of a claim can vary from 1 day to 40 – 50 years.
ACC needs to have enough money in the bank to cover these costs. So when it calculates the motor vehicle levies you pay each year, it factors in all the costs in the year for new injuries and then adds on the estimate of the future costs for those injuries. Through this ACC achieves a ‘fully funded’ ACC Scheme.
On average, ACC receives 3.4 times as many claims per 10,000 motorcycles as cars, and each claim will cost 2.6 times as much over its life than claims for occupants of cars. Ministry of Transport figures show that motorcyclists are 22 times more at risk of being involved in a fatal or serious injury crash than car drivers per kilometre driven.
Injuries to motorcyclists are expected to cost ACC around $104 million for the 2015/16 year. ACC is asking motorcycle owners to pay $27 million of this cost. The rest of the levy, to cover the cost of injuries to motorcycle riders, is charged to owners of other vehicles (mostly by owners of cars).
While it may appear that owners of diesel vehicles pay a higher levy fee than owners of equivalent petrol vehicles, this is not the case. ACC collects the Motor Vehicle levy from owners of petrol driven vehicles when they fill up their tanks (currently 9.9 cents per litre on petrol sales) as well as when their vehicles are licensed each year.
In contrast, the entire levy for diesel-powered motor vehicles comes from the annual licence fee. This is because only a fraction of the diesel sold in New Zealand is used for powering vehicles that travel on public roads. The rest is used for power generation, boats, trains and other industrial purposes.
The Corporation sets its rates to ensure that the average levy collected for diesel vehicles equates to the average combined petrol levy and licence fees for petrol vehicles. This means that, on average, drivers and owners of diesel vehicles pay a similar amount in ACC levies as drivers and owners of equivalent petrol vehicles.
In September last year new regulations were introduced that split the Goods Service vehicles class by weight and these regulations come into force on 2 December 2013. GSVs weighing more than 3,500 kg are now classed as heavy GSVs. GSVs below that weight had a reduction in levies, and are only marginally higher than passenger vehicles.
While it is true that an owner cannot ride more than one motorcycle or drive more than one vehicle at the same time, people have a choice about how many vehicles they own. Similarly, if someone owns more than one property there is no rebate on the rates and other charges on those they are not currently occupying. If a vehicle is not going to be used for an extensive period you are able to register it for only part of a year, which enables you to reduce your overall levy costs.
Applying levies to registered motor vehicles is the simplest way to collect them. It avoids potential difficulties and substantial administrative costs. For example, if ACC levies were applied to every motor vehicle licence holder, people who hold a licence but do not own or use a motor vehicle would have to pay a levy. This would be very unfair. Although other systems of collecting levies from drivers have been suggested none are convincingly more equitable or cost-effective than the current situation.
Each year ACC consults with the public on the upcoming year’s levies. Levy payers are invited to take part in consultation by submitting comment and suggestions directly to ACC. Public consultation for this year has recently closed and the ACC Board has made its recommendations to the Minister for ACC, which include a significant reduction to the average motor vehicle levy. I expect Cabinet will make a decision and announcement on the 2015/16 levy rates shortly.
The ACC Scheme is unique and world-leading in the benefits it provides its clients. The premise of the no-fault scheme is that it is a safety net for all New Zealanders, where injuries that meet the statutory criteria are covered without the need for lengthy and costly litigation. ACC may provide entitlements such as weekly compensation, medical treatment, rehabilitation, lump sums, death entitlements, elective surgery, dental treatment, transport costs and home help, for a person given cover under the Scheme.”
Thank you once again for writing to me and I trust this response addresses your concerns.
Kind regards
Jonathan
Hon Dr Jonathan Coleman
MP for Northcote
Minister of Defence, Minister of State Services, Associate Minister of Finance
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Originally Posted by MrKiwi
(Just as the surgeon warned!)...guess I will just have to wait another 8yrs huh? (And 16 more for my recent injuries from ANOTHER drunk driver hitting me! (shoulder AC joint destroyed) )
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