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ACC levies used as budget bribe

16 May 2013
ACC levies used as budget bribe

National is meddling with ACC levies to try sugar a budget that does little for ordinary New Zealanders.

As part of today’s budget announcements ACC Minister Judith Collins said there would be levy reductions of around $300 million for 2014/15, reaching $1 billion in 2015/16.

“ACC levies are used as a political football. Every year the government of the day can play God bestowing a cut or slapping on an increase,” Green Party ACC spokesperson Kevin Hague said.

“The volatility of levies is caused by the inherent instability of the future funding model. This model treats ACC as if it’s a private insurance company when it is not,” Mr Hague said.

The reality is that ACC functioned perfectly well for 25 years from its inception in 1974 by funding each year's claims from that year's revenue.

"The fully pre-funded model was introduced in 1998 as part of the then National-led Government's failed experiment of privatising ACC's work account and turning ACC into an insurance scheme.

“When it got into Government, National invented a financial crisis in ACC based on a target of being fully pre-funded by 2019 when in fact its revenue was more than its expenditure.

“There’s absolutely no good reason why ACC should not be funded as every other public service in the country is under a pay as you go model.

“ACC is not a private company. Our no-fault system is a world leader, and while not perfect it provides a fair go for people regardless of their job, income or the sports they play.

“The Green Party would look at investing some of the reserves built up by ACC to achieve better health outcomes for New Zealanders.”

As at 28 September 2012 ACC has total reserves of $21.543 billion.

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