ACC’s unlawful stealth policy change
30/03/10 16:30 Filed in: News Releases
People who are injured are having their claims ruled out because of a stealth policy change at ACC that the government won’t acknowledge, Progressive Wigram MP Jim Anderton says.
In parliament today he challenged the ACC minister over a doubling in the number of cases being taken on formal review after being declined because of a pre-existing condition.
“The law is clear that ACC cannot cover situations caused wholly or substantially by pre-existing conditions or aging. Fair enough. But the law does not permit ACC to decline cover just because of a pre-existing condition.
“Since the change of government, ACC has been declining cover on that ground in what appears to be unprecedented numbers. The government refuses to fess up to a policy change, but record numbers of people are contacting me. And how else to explain a doubling in numbers of claims sent for formal review - suddenly on national taking office.”
From 2004/05 the proportion of claims sent for formal review fluctuated between 0.13 and 0.18 per cent of all claims (about 2,200, to 3,000 a year). Suddenly, when national took office the numbers increased to 0.33 per cent. That would amount to around two thousand affected people.
Many thousands more people are having their claims denied, and can’t afford the cost of formal review and court cases.
Jim Anderton says the government has no satisfactory explanation for the sudden increase.
“There must have been a policy change. According to some of the best surgeons and specialists many of the ‘pre-existing conditions’ have nothing to do with the cause of injury and ACC has no grounds in law to reject people who need cover. This policy change is therefore unlawful,” Jim Anderton said.
The information below was provided by a series of written questions from the Minister for ACC and clearly shows that ACC did not have any information on which they could base policy changes as substantial as they have been.
In parliament today he challenged the ACC minister over a doubling in the number of cases being taken on formal review after being declined because of a pre-existing condition.
“The law is clear that ACC cannot cover situations caused wholly or substantially by pre-existing conditions or aging. Fair enough. But the law does not permit ACC to decline cover just because of a pre-existing condition.
“Since the change of government, ACC has been declining cover on that ground in what appears to be unprecedented numbers. The government refuses to fess up to a policy change, but record numbers of people are contacting me. And how else to explain a doubling in numbers of claims sent for formal review - suddenly on national taking office.”
From 2004/05 the proportion of claims sent for formal review fluctuated between 0.13 and 0.18 per cent of all claims (about 2,200, to 3,000 a year). Suddenly, when national took office the numbers increased to 0.33 per cent. That would amount to around two thousand affected people.
Many thousands more people are having their claims denied, and can’t afford the cost of formal review and court cases.
Jim Anderton says the government has no satisfactory explanation for the sudden increase.
“There must have been a policy change. According to some of the best surgeons and specialists many of the ‘pre-existing conditions’ have nothing to do with the cause of injury and ACC has no grounds in law to reject people who need cover. This policy change is therefore unlawful,” Jim Anderton said.
The information below was provided by a series of written questions from the Minister for ACC and clearly shows that ACC did not have any information on which they could base policy changes as substantial as they have been.
- ACC does not capture data on ‘pre-existing degeneration’, as a decline of cover classification,
- ACC does not capture data on the proportion of claims for treatment of shoulder injuries that have been declined due to a finding of ‘pre-existing degeneration’,
- ACC does not capture data regarding the number of reviews which dispute an ACC decision to decline treatments and/or cover on the grounds of ‘pre-existing degenerative’ condition,
- ACC does not capture data regarding the number of appeals which dispute an ACC decision to decline treatment and/or cover on the grounds of ‘pre-existing degenerative’ condition,
- ACC does not keep data on the average legal costs of defending court decisions relating to the presence of a ‘pre-existing degenerative’ condition,
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Changing ACC policy by stealth
29/03/10 08:01 Filed in: Columns
Column by Jim Anderton, MP for Wigram and Progressive Party leader
Published in the Press, 29 March 2010
Imagine your insurance company decides to change the coverage of your home contents insurance without telling you. You’ve paid your premiums for years but when you come to make a claim after a burglary, they turn you down. Something to do with your house now having a new pre-existing vulnerability to burglars. This is news to you.
You would have grounds for taking them to court for breach of contract, and the chances are you’d win.
If ACC was a private insurance company, the New Zealand public could right now take them to court, because under the direction of this National government they are perverting the spirit and the letter of the ACC legislation by turning down injury victims just for having a ‘pre-existing condition.’
New figures just released show that the number of claims sent to formal review by ACC because of ‘pre-existing conditions’ has doubled since National came to power.
Minister for ACC Nick Smith and the CEO of ACC Dr Jan White say they are just ‘sticking more closely to the legislation.’
But according to some of the best surgeons and specialists in the country, many of these ‘pre-existing conditions’ have nothing to do with the cause of the injury. And if the ‘pre-existing condition’ didn’t cause the injury, ACC has no grounds in the legislation to reject people who need help.
Here’s what the legislation says; ACC cannot cover situations caused “wholly or substantially” by pre-existing conditions or aging. Fair enough. It doesn’t say you can reject people just for having a pre-existing condition.
That is a change in policy.
I would like to know who rubber stamped this change, and under what authority they acted.
It’s ironic that President Obama has just introduced health reforms in the United States to stop insurance companies turning people away because of ‘pre-existing conditions.’ Some people were even being rejected because they had hay fever. Meanwhile New Zealand’s National Government is turning ACC into the worst kind of private insurance company.
What makes this change in policy even worse is that the government appears to be acting on a complete absence of data and information.
When I asked the Minister for ACC Nick Smith, in Parliament, how many accident victims with ‘pre-existing conditions’ have successfully overturned their ACC review in court, he said that ‘ACC does not keep this data’. He couldn’t tell me anything.
It’s ironic that when it comes to proving that ACC has gone to hell in a hand basket and has no money, suddenly the Minister does have data.
But that data is highly controversial. ACC was set up to be a pay-as-you-go fund. In other words, you pay for the injuries that happen with the levies raised in the same year. The figures that the government and ACC use to show that ACC is in financial hot water are based on paying money now for accidents that may or may not occur in the future.
That’s just silly. If fifty years ago we had put aside money to pay for all the polio and TB cases we thought we’d have to treat in the future, based on the number of cases in the 1950s, we’d feel pretty stupid now.
We can’t possibly predict what improvements will be developed in the future that may or may not reduce the number of accidents.
The truth is ACC took in $1 billion more than it spent on claims last year, and it’s investment portfolio has increased by over $2 million in the last two years. It’s hardly going down the plug hole.
ACC isn’t free - we all pay levies. We pay to have a system that isn’t one in which an insurance company tries to find ways to avoid helping its policy holders when they need it. We pay to have a no fault compensation system which covers us all, no matter what risks we have to take in our work or on the sports field, and no matter how old we are.
If this National-led government wants to destroy ACC and prepare it for privatisation, then they will overturn the spirit of fairness and decency that led Sir Owen Woodhouse to come up with an accident compensation scheme that is the envy of the world. It helps people, not the insurance companies and lawyers who want to make a quick buck. I don’t think New Zealanders will not give that up without a fight.
I certainly won’t.
Published in the Press, 29 March 2010
Imagine your insurance company decides to change the coverage of your home contents insurance without telling you. You’ve paid your premiums for years but when you come to make a claim after a burglary, they turn you down. Something to do with your house now having a new pre-existing vulnerability to burglars. This is news to you.
You would have grounds for taking them to court for breach of contract, and the chances are you’d win.
If ACC was a private insurance company, the New Zealand public could right now take them to court, because under the direction of this National government they are perverting the spirit and the letter of the ACC legislation by turning down injury victims just for having a ‘pre-existing condition.’
New figures just released show that the number of claims sent to formal review by ACC because of ‘pre-existing conditions’ has doubled since National came to power.
Minister for ACC Nick Smith and the CEO of ACC Dr Jan White say they are just ‘sticking more closely to the legislation.’
But according to some of the best surgeons and specialists in the country, many of these ‘pre-existing conditions’ have nothing to do with the cause of the injury. And if the ‘pre-existing condition’ didn’t cause the injury, ACC has no grounds in the legislation to reject people who need help.
Here’s what the legislation says; ACC cannot cover situations caused “wholly or substantially” by pre-existing conditions or aging. Fair enough. It doesn’t say you can reject people just for having a pre-existing condition.
That is a change in policy.
I would like to know who rubber stamped this change, and under what authority they acted.
It’s ironic that President Obama has just introduced health reforms in the United States to stop insurance companies turning people away because of ‘pre-existing conditions.’ Some people were even being rejected because they had hay fever. Meanwhile New Zealand’s National Government is turning ACC into the worst kind of private insurance company.
What makes this change in policy even worse is that the government appears to be acting on a complete absence of data and information.
When I asked the Minister for ACC Nick Smith, in Parliament, how many accident victims with ‘pre-existing conditions’ have successfully overturned their ACC review in court, he said that ‘ACC does not keep this data’. He couldn’t tell me anything.
It’s ironic that when it comes to proving that ACC has gone to hell in a hand basket and has no money, suddenly the Minister does have data.
But that data is highly controversial. ACC was set up to be a pay-as-you-go fund. In other words, you pay for the injuries that happen with the levies raised in the same year. The figures that the government and ACC use to show that ACC is in financial hot water are based on paying money now for accidents that may or may not occur in the future.
That’s just silly. If fifty years ago we had put aside money to pay for all the polio and TB cases we thought we’d have to treat in the future, based on the number of cases in the 1950s, we’d feel pretty stupid now.
We can’t possibly predict what improvements will be developed in the future that may or may not reduce the number of accidents.
The truth is ACC took in $1 billion more than it spent on claims last year, and it’s investment portfolio has increased by over $2 million in the last two years. It’s hardly going down the plug hole.
ACC isn’t free - we all pay levies. We pay to have a system that isn’t one in which an insurance company tries to find ways to avoid helping its policy holders when they need it. We pay to have a no fault compensation system which covers us all, no matter what risks we have to take in our work or on the sports field, and no matter how old we are.
If this National-led government wants to destroy ACC and prepare it for privatisation, then they will overturn the spirit of fairness and decency that led Sir Owen Woodhouse to come up with an accident compensation scheme that is the envy of the world. It helps people, not the insurance companies and lawyers who want to make a quick buck. I don’t think New Zealanders will not give that up without a fight.
I certainly won’t.
ACC relies on out-dated methods to test injuries
25/02/10 15:09 Filed in: News Releases
Accident victims who are being turned away by ACC because of fictitious ‘pre-existing conditions’ are in some cases being assessed by non-practicing elderly surgeons who rely on text books dating back to 1934, says MP for Wigram and Progressive Party leader, Jim Anderton.
An orthopaedic surgeon has contacted Jim Anderton to express concern that 85% of their patients needing surgery after accidents are being rejected on below-average assessments by a company contracted and paid by ACC to test claims.
“This seems a clear conflict of interest.
“A specialist surgeon currently practicing, and using the latest equipment and clinical research decides that a plumber who has fallen at work needs shoulder surgery as a result of the accident. Then retired surgeons, who are no longer specialists, probably never used an MIR scan in their working lives, and quoting from a text book which dates back to 1934, reject the claim on behalf of ACC, because of ‘pre-existing’ conditions.”
“The onus of proof had been reversed by ACC and is now on the patient to prove that their injury occurred at the time of their accident, and not ACC’s job to prove that there was a pre-existing condition. And yet there has been no public debate about this.
“It’s happened behind the scenes, and the public have been kept in the dark.”
The surgeon who contacted Mr Anderton’s office recently saw a seventeen year old who plays water polo competitively. The teenager had dislocated her shoulder and needed surgery. But ACC rejected her claim on the basis that the girl was ‘pre-disposed to dislocate her shoulder because she was very flexible.’
“That’s rubbish; it’s like saying someone is ‘pre-disposed to break their arm.’
“The typical patient being rejected is fit and well, and has been involved in occupations like the construction industry up until the time of their injury.”
“There’s no money saved here; specialists predict that up to 50% of these people who don’t get treatment straight away will have marked deterioration as they get older and will require much more expensive surgery later in life,” says Jim Anderton
An orthopaedic surgeon has contacted Jim Anderton to express concern that 85% of their patients needing surgery after accidents are being rejected on below-average assessments by a company contracted and paid by ACC to test claims.
“This seems a clear conflict of interest.
“A specialist surgeon currently practicing, and using the latest equipment and clinical research decides that a plumber who has fallen at work needs shoulder surgery as a result of the accident. Then retired surgeons, who are no longer specialists, probably never used an MIR scan in their working lives, and quoting from a text book which dates back to 1934, reject the claim on behalf of ACC, because of ‘pre-existing’ conditions.”
“The onus of proof had been reversed by ACC and is now on the patient to prove that their injury occurred at the time of their accident, and not ACC’s job to prove that there was a pre-existing condition. And yet there has been no public debate about this.
“It’s happened behind the scenes, and the public have been kept in the dark.”
The surgeon who contacted Mr Anderton’s office recently saw a seventeen year old who plays water polo competitively. The teenager had dislocated her shoulder and needed surgery. But ACC rejected her claim on the basis that the girl was ‘pre-disposed to dislocate her shoulder because she was very flexible.’
“That’s rubbish; it’s like saying someone is ‘pre-disposed to break their arm.’
“The typical patient being rejected is fit and well, and has been involved in occupations like the construction industry up until the time of their injury.”
“There’s no money saved here; specialists predict that up to 50% of these people who don’t get treatment straight away will have marked deterioration as they get older and will require much more expensive surgery later in life,” says Jim Anderton
ACC turning people away
18/02/10 15:09 Filed in: News Releases
Victims of vicious attacks, a 17 year old girl who had an accident at the gym, and many other accident victims, are being turned away by ACC for having non-existent ‘pre-existing conditions’, says MP for Wigram and Progressive Party leader, Jim Anderton.
The Minister indicated in Parliament today that he would be willing to look at this issue if a clear pattern emerges.
“There is a clear pattern. He needs to do something now. My electorate office, and the offices of other MPs in Christchurch are inundated with stories of people who have been turned away by ACC after accidents or attacks,” says Jim Anderton.
“Wayne Direen, one of my constituents, was injured in an unprovoked attack in Christchurch, and sustained multiple injuries.
“Initially ACC paid for his treatment, but when his shoulder failed to come right, his GP referred him to an orthopaedic surgeon who recommended surgery. ACC declined to cover the surgery on the basis that the shoulder injury was a ‘pre-existing condition’ – which is clearly ludicrous.
“He had been a keen martial arts student and a rugby league player before the attack, and clearly did not have a long term shoulder problem - until the night he was attacked,” says Jim Anderton.
“Other cases include a businessman with his own cleaning business who fell at work and hurt his knee. He had no trouble with his knee prior to the accident, but again ACC declined to cover surgery on the grounds that he had a pre-existing medical condition.
“A self-employed electrician broke his elbow at work. ACC covered treatment for the bruising but not the broken bone because the break had caused on-going nerve problems which required surgery. He was forced to sell his wife’s car to pay for the operation.
“There are many more cases like this. Some of these people have contacted Nick Smith Minister for ACC, only to be sent away and told to take their case to the District Court. None of my constituents can afford to take this option, nor should they have to. Nick Smith needs to take responsibility and do something to stop this happening,” says Jim Anderton.
The Minister indicated in Parliament today that he would be willing to look at this issue if a clear pattern emerges.
“There is a clear pattern. He needs to do something now. My electorate office, and the offices of other MPs in Christchurch are inundated with stories of people who have been turned away by ACC after accidents or attacks,” says Jim Anderton.
“Wayne Direen, one of my constituents, was injured in an unprovoked attack in Christchurch, and sustained multiple injuries.
“Initially ACC paid for his treatment, but when his shoulder failed to come right, his GP referred him to an orthopaedic surgeon who recommended surgery. ACC declined to cover the surgery on the basis that the shoulder injury was a ‘pre-existing condition’ – which is clearly ludicrous.
“He had been a keen martial arts student and a rugby league player before the attack, and clearly did not have a long term shoulder problem - until the night he was attacked,” says Jim Anderton.
“Other cases include a businessman with his own cleaning business who fell at work and hurt his knee. He had no trouble with his knee prior to the accident, but again ACC declined to cover surgery on the grounds that he had a pre-existing medical condition.
“A self-employed electrician broke his elbow at work. ACC covered treatment for the bruising but not the broken bone because the break had caused on-going nerve problems which required surgery. He was forced to sell his wife’s car to pay for the operation.
“There are many more cases like this. Some of these people have contacted Nick Smith Minister for ACC, only to be sent away and told to take their case to the District Court. None of my constituents can afford to take this option, nor should they have to. Nick Smith needs to take responsibility and do something to stop this happening,” says Jim Anderton.
Jim's E-News, November 2009
16/11/09 15:00 Filed in: Newsletters
DENTAL CARE ISSUES FOR NEW ZEALANDERS
I am involving myself in a project to raise the profile of, and extend the services for, dental treatment in New Zealand.
The cost of dental treatment is a significant barrier to lifetime dental care and as a result, neglected teeth and gums are a hidden but critical problem for New Zealand’s healthcare system which needs to be urgently addressed.
It is my strongly held view that a high quality, accessible and affordable dental system should be part of the general medical health system in New Zealand. This would provide a public-private partnership which would enable all of our citizens from their earliest years right through to their last, to have their teeth cared for by qualified dental professionals at an affordable cost.
From one end of New Zealand to the other I have been made aware of the importance of this issue to a large number of our citizens, young and old, and it is well beyond time when action rather than words was seen and heard to be taking place.
I would be grateful to hear from you by email, fax or letter about your thoughts on this vital issue.
Contact me here.
ACC IS THE BEST IN THE WORLD - BIKERS RALLY, CHRISTCHURCH
Let’s be clear about one thing; New Zealand has the best accident compensation scheme in the world. It’s not broken, so why try and fix it; and no matter what Nick Smith tries to tell you - it’s not broke. It has reserves of money. It has over $11 billion of reserves, and last year it collected $1 billion more in levies, than it spent on claims.
Bikers are being unfairly targeted – Nick Smith wants them to pay three times as much in ACC levies as they are paying today.
Today motorcyclists are paying about $252. Tomorrow they will be paying $735.
This is outrageous. And it is completely unnecessary - because ACC can pay its bills without making them pay three times as much.
ACC was set up as a no-fault system to be run by a government-owned company so that everyone who has an accident gets looked after, and at a lower cost than overseas.
It was never intended to penalise certain groups that it saw as ‘high risk’ - otherwise where do you stop? If its bikers today, why not old people who are more likely to fall over than anyone else; why not 6 year boys who play rugby and are more likely to get hurt than kids playing chess?
The point of the scheme was to avoid this situation, and draw on the overall resources of the whole community. So we all pay a bit, and no one is disadvantaged. Every one avoids the very large lawyers’ bills and insurance company profits that have to be paid under a private insurance system.
We gave up the right to sue under this system, in return for the fair treatment of injured people.
The National-led government is playing dirty with the figures. It’s insisting that all imagined accidents in the future should be paid right now by people like the bike riders. But this wasn’t what ACC was set up to do. It was always intended to be a ‘pay as you go’ scheme.
That means the levies received in any one year, pay for the accidents in that year. And that system has been working fine - in fact ACC has even managed to put aside significant resources.
The real agenda here, is to set up ACC for a gradual return to a privately run insurance scheme. Scaremongering about costs is just the Trojan horse. And inside the Trojan horse is a bunch of lawyers and foreign insurance companies, licking their lips and looking forward to getting their hands on your levies!
I am entirely opposed to any private scheme. And I totally reject the National government’s attempt to make bikers pay three times as much.
URGENT INQUIRY INTO MONETARY POLICY NOW
We should put party politics aside and come up with a new approach to monetary policy which supports people in New Zealand who produce tradeable goods, rather than those who speculate on property and take the profits off-shore.
The National-led government and its coalition partners refused to take part in the inquiry, with the PM cynically calling it a ‘stunt’ from the opposition parties.
I don’t believe in the “nothing we can do” stance of this government. We could be looking to remove the incentives for those buying investment properties. Banks need to be encouraged to lend to businesses; and we need to review our tax system which at the moment encourages unproductive property investment and discourages investment in the productive tradeable export goods sector.
We need to look at regulating the banking sector so that ordinary New Zealanders don’t pay (in interest rates or hidden bank fees) while the Australian-owned banks make excessive profits.
With the National-led government complacently sitting on the sidelines, New Zealanders will be the losers for it.
To download the banking inquiry report, go here, or get in touch with my office.
BANKING INQUIRY BACKGROUNDER AND FINDINGS
The ‘big four’ Australian banks control nearly 90% of banking assets in New Zealand. The three New Zealand owned banks have 4% of banking assets.
Have the Banks made a profit?
The combined profits of the ‘big four’ Australian owned banks now exceed the combined profits of all other companies listed on the stock exchange NZX 50 series.
In 2008 Banks earned $3.26 billion; the earnings of the NZX 50 were $2.89 billion.
Did the Banks pass on the cut to the Official Cash Rate (OCR)?
The Reserve Bank cut the OCR from its high of 8.25 % in mid 2008, to only 2.5% today.
But the overseas owned banks reduced interest rates by less than the fall in the OCR. 1% margin in interest rates was not passed on to bank customers. 1% extra interest added $787 million to costs for New Zealand businesses; and 1% higher margin on loans added $460 million to the net interest costs to the farming sector.
The biggest cost was in the housing sector: 1% extra interest cost added over $1.6 billion to mortgage repayments.
New Zealand businesses are suffering
In 2009 bank lending for home loans rose about $3.2 billion (to $164.8 billion). Meanwhile business lending fell by about $3 billion (to $78 billion.)
The effects on the farming sector have been negative
Federated Farmers interest rates survey in June 2009 found that farm business overdraft interest rates had fallen an average of 2.68 % since December 2008. Meanwhile the OCR was cut by 4%.
Ordinary New Zealanders had problems paying their mortgages
In five years, Budgeting and Family Support Services has only seen one family lose their house in a mortgage sale. But in the first three months on 2009, fifteen families had already lost their home.
Have the Banks contributed to overseas debt and a housing bubble?
In the last ten years, personal lending has almost doubled, from $60 billion to $105 billion; most of the lending has been for housing.
Home loans now make up 55% of bank lending, up from 35% ten years ago. The banks borrowed more money to fund property price increases which contributed to a rise in overseas debt.
Between 2003 and 2009 net overseas liabilities rose from $100.6 billion to $176.3 billion; that’s a rise from 76.8% of GDP to 98%.
What have the banks got to do with our volatile exchange rate?
High overseas borrowing has impacted on the exchange rate which is subject to high volatility. The export sector makes up roughly 30% of GDP - about $40 billion per year but suffers the most from currency instability which means uncertain returns.
PROGRESSIVE SUBMISSION ON THE LAW COMMISSION PAPER: ‘ALCOHOL IN OUR LIVES’ I am under no illusion about the challenge involved if we are to seriously reduce the harm caused by alcohol. But doing nothing is not an option.
Alcohol is by far the most damaging drug in the country. It causes between $2-$3 billion dollars worth of economic and social harm each year. The personal cost to families and loved ones is incalculable. How can we measure the cost of a family tragedy?
One of the most damaging drugs we face right now is not even illegal; our kids can buy it in the local dairy; they play sports and have it promoted to them all the time; they see it on TV, on billboards and hear about it on the radio.
The abuse of alcohol amongst our young people is on the rise and it’s destroying lives.
I have been working with others like Dr Doug Sellman of the Otago School of Medicine to raise awareness of the damage that alcohol is causing. We have a unique opportunity right now to do something, through the Law Commission’s review of the legislation to do with the drinking age, the availability and the advertising of alcohol.
Did you know that every advertisement seen by a young person increases the number of drinks they consume by 1%. They become customers for life. And people like you end up picking up the pieces.
Currently, $200,000 per day is spent on marketing and advertising alcohol. About half the marketing is spent on sponsorship.
I welcome the Law Commission’s issues paper which gives New Zealanders a unique opportunity to reform the legal framework in which alcohol is sold, advertised and promoted.
It gives us a chance today to do more to protect New Zealanders from the harm caused by the abuse of alcohol.
The Progressive Party submission calls on the Law Commission to do more in its final recommendations to guide law makers on how to further curb alcohol advertising, particularly to the most vulnerable New Zealanders - the young. I would like to see more options put forward by the Law Commission on how we can greatly reduce the availability of alcohol to young people. I have also given my opinions and made comments on every option put forward in the Law Commission’s paper, ‘Alcohol in our Lives’.
For the full submission: go here.
For my speech to the National CAYAD hui, go here.
"Ten things the alcohol industry won't tell you about alcohol"
Alcohol Action are holding their last two last meetings this week with presenter Dr. Doug Sellman.
The meetings are at: CHRISTCHURCH: Art Gallery Theatre, Tuesday 17th November, 7.30-9pm PORIRUA: Helen Smith Community Room, Wednesday 18th November, 7.30-9pm
There is still time to get in a late submissions to the Law Commission.
Use milk payout to farmers to strengthen industry
It's important that the increase in Fonterra's payout to farmers is used to strengthen the industry, and not squandered.
The increased pay out is very timely for a large number of farmers who have been struggling with higher input prices and enormous costs for financing. Interest rates for many farmers have not come down.
But the risk is that the higher payout will lead to higher farm valuations and in turn to yet more farm indebtedness. That's what happened too often when the milk payout reached $7 a kilo. When the price then dropped, it left a lot of farmers under mortgage stress.
Banks should be careful about getting into the same position of lending against valuations based on favourable milk payouts.
The payout shows New Zealand is well positioned as a food producer to continue to earn a living when global conditions are less than favourable.
When payouts increase as much as this one has, the extra earnings need to be used to strengthen the industry, for example by stronger investment in research and development, and strenthening balance sheets to reduce our exposure to rapacious overseas owned banks.
A generation of kids will be lost – New Zealand must do more
Launch of the Mutima Project in Christchurch
16,000 children are dying from hunger every day because food aid is now at its lowest level in twenty years, but the National government remains determined not to use our aid for ‘poverty reduction.
The head of the United Nation’s World Food Programme recently announced that tens of millions of the world’s poor will have their food rations cut or cancelled in the next few weeks because some OECD countries have slashed aid after the financial crisis.
The Mutima project is a volunteer organisation and will send a team of cardiac surgeons to Zambia to perform life-saving heart surgery on young adults.
I commend them for the strength of their personal commitment and their determination to serve. We are a stronger and more caring community because of people like these Christchurch surgeons. Because of them, a hundred young Zambians will have a second chance at life.
About 60% of the Zambian population are living on less than a $1 per day.
But where is the urgency from the National government to save a generation of children who will die from starvation if the world does nothing?
The National government has recently announced that it will abolish the goal of ‘poverty reduction’ for our aid, and replace it with a goal of ‘economic development’.
I am a strong champion of economic development but you can’t do much business development if people don’t have enough to eat or clean water to drink.
I want to see the National government do more about bad governance and corruption in some of the poorest countries and see New Zealand get behind a new international Natural Resource Charter which sets out ‘best practice’ in countries with natural resources like oil (or copper in Zambia), so proceeds of those resources go to the poorest people and don’t end up in the pockets of the corrupt.
For the speech, go here.
Who owns the ASB? Not us.
The ASB has been an Australian owned bank for the last two decades, and it is misleading the public when it pretends to be a ‘Kiwi Bank’.
The ABS is running promotional ads claiming ‘We’ve been a Kiwi Bank since 1847’.
The truth is we don’t really know who owns the ASB. We know it is owned 100% by the Commonwealth Bank of Australia (CBA), but who owns the Commonwealth Bank?
It used to be owned by the Federal Government of Australia but it was privatised in stages beginning in 1991.
Almost half of the current owners of the Commonwealth Bank are ‘nominee’ companies.
That means their identities are hidden behind other well-known companies, like the Hong Kong and Shanghai Banking Corporation (HSBC).
We don’t really know who owns ASB. All we know for sure is that New Zealand doesn’t.
For the release, go here.
An ‘unfortunate arrangement’
The Auditor General’s findings about Bill English’s accommodation arrangements go significantly further than findings that caused Marion Hobbs and Phillida Bunkle to stand down from ministerial office in 2001. This makes Mr English’s position as finance minister very difficult. I have been in the same position as Mr Key, in having to make a decision on the future of the Minister. A precedent for the right thing to do has been set.
I wrote to the Auditor-General saying Mr English’ arrangements needed scrutiny. The report finds Mr English’s arrangements were not within the rules. The Auditor General’s report states:
The result was that the Crown was renting a property for Mr English from a trust in which he had an interest, and the arrangement was explicitly based on a view that he did not have an interest. Clearly, this was unfortunate.
The report discloses Mr English went to some lengths to arrange his affairs around the accommodation allowance entitlement. That is not a good look for a Minister of Finance.
The Auditor-General’s advice does not even mention other issues that the Prime Minister still needs to consider: that Mr English was giving his Wellington address as his home for the purpose of being a director of a company (incidentally, the company that owns his Dipton investment), but claiming to live in Dipton for the purpose of receiving an accommodation allowance.
A prudent minister might have noticed the contradiction between those two claims.
I have always welcomed the idea of Mr English having his family with him in Wellington. That is not the issue. The question is whether he was right to claim entitlements for doing so. It would not have been in any way objectionable if Mr English had lived in Wellington with his family and claimed an out of town allowance for his occasional trips to Dipton.
For the release, go here.
I am involving myself in a project to raise the profile of, and extend the services for, dental treatment in New Zealand.
The cost of dental treatment is a significant barrier to lifetime dental care and as a result, neglected teeth and gums are a hidden but critical problem for New Zealand’s healthcare system which needs to be urgently addressed.
It is my strongly held view that a high quality, accessible and affordable dental system should be part of the general medical health system in New Zealand. This would provide a public-private partnership which would enable all of our citizens from their earliest years right through to their last, to have their teeth cared for by qualified dental professionals at an affordable cost.
From one end of New Zealand to the other I have been made aware of the importance of this issue to a large number of our citizens, young and old, and it is well beyond time when action rather than words was seen and heard to be taking place.
I would be grateful to hear from you by email, fax or letter about your thoughts on this vital issue.
Contact me here.
ACC IS THE BEST IN THE WORLD - BIKERS RALLY, CHRISTCHURCH
Let’s be clear about one thing; New Zealand has the best accident compensation scheme in the world. It’s not broken, so why try and fix it; and no matter what Nick Smith tries to tell you - it’s not broke. It has reserves of money. It has over $11 billion of reserves, and last year it collected $1 billion more in levies, than it spent on claims.
Bikers are being unfairly targeted – Nick Smith wants them to pay three times as much in ACC levies as they are paying today.
Today motorcyclists are paying about $252. Tomorrow they will be paying $735.
This is outrageous. And it is completely unnecessary - because ACC can pay its bills without making them pay three times as much.
ACC was set up as a no-fault system to be run by a government-owned company so that everyone who has an accident gets looked after, and at a lower cost than overseas.
It was never intended to penalise certain groups that it saw as ‘high risk’ - otherwise where do you stop? If its bikers today, why not old people who are more likely to fall over than anyone else; why not 6 year boys who play rugby and are more likely to get hurt than kids playing chess?
The point of the scheme was to avoid this situation, and draw on the overall resources of the whole community. So we all pay a bit, and no one is disadvantaged. Every one avoids the very large lawyers’ bills and insurance company profits that have to be paid under a private insurance system.
We gave up the right to sue under this system, in return for the fair treatment of injured people.
The National-led government is playing dirty with the figures. It’s insisting that all imagined accidents in the future should be paid right now by people like the bike riders. But this wasn’t what ACC was set up to do. It was always intended to be a ‘pay as you go’ scheme.
That means the levies received in any one year, pay for the accidents in that year. And that system has been working fine - in fact ACC has even managed to put aside significant resources.
The real agenda here, is to set up ACC for a gradual return to a privately run insurance scheme. Scaremongering about costs is just the Trojan horse. And inside the Trojan horse is a bunch of lawyers and foreign insurance companies, licking their lips and looking forward to getting their hands on your levies!
I am entirely opposed to any private scheme. And I totally reject the National government’s attempt to make bikers pay three times as much.
URGENT INQUIRY INTO MONETARY POLICY NOW
We should put party politics aside and come up with a new approach to monetary policy which supports people in New Zealand who produce tradeable goods, rather than those who speculate on property and take the profits off-shore.
The National-led government and its coalition partners refused to take part in the inquiry, with the PM cynically calling it a ‘stunt’ from the opposition parties.
I don’t believe in the “nothing we can do” stance of this government. We could be looking to remove the incentives for those buying investment properties. Banks need to be encouraged to lend to businesses; and we need to review our tax system which at the moment encourages unproductive property investment and discourages investment in the productive tradeable export goods sector.
We need to look at regulating the banking sector so that ordinary New Zealanders don’t pay (in interest rates or hidden bank fees) while the Australian-owned banks make excessive profits.
With the National-led government complacently sitting on the sidelines, New Zealanders will be the losers for it.
To download the banking inquiry report, go here, or get in touch with my office.
BANKING INQUIRY BACKGROUNDER AND FINDINGS
The ‘big four’ Australian banks control nearly 90% of banking assets in New Zealand. The three New Zealand owned banks have 4% of banking assets.
Have the Banks made a profit?
The combined profits of the ‘big four’ Australian owned banks now exceed the combined profits of all other companies listed on the stock exchange NZX 50 series.
In 2008 Banks earned $3.26 billion; the earnings of the NZX 50 were $2.89 billion.
Did the Banks pass on the cut to the Official Cash Rate (OCR)?
The Reserve Bank cut the OCR from its high of 8.25 % in mid 2008, to only 2.5% today.
But the overseas owned banks reduced interest rates by less than the fall in the OCR. 1% margin in interest rates was not passed on to bank customers. 1% extra interest added $787 million to costs for New Zealand businesses; and 1% higher margin on loans added $460 million to the net interest costs to the farming sector.
The biggest cost was in the housing sector: 1% extra interest cost added over $1.6 billion to mortgage repayments.
New Zealand businesses are suffering
In 2009 bank lending for home loans rose about $3.2 billion (to $164.8 billion). Meanwhile business lending fell by about $3 billion (to $78 billion.)
The effects on the farming sector have been negative
Federated Farmers interest rates survey in June 2009 found that farm business overdraft interest rates had fallen an average of 2.68 % since December 2008. Meanwhile the OCR was cut by 4%.
Ordinary New Zealanders had problems paying their mortgages
In five years, Budgeting and Family Support Services has only seen one family lose their house in a mortgage sale. But in the first three months on 2009, fifteen families had already lost their home.
Have the Banks contributed to overseas debt and a housing bubble?
In the last ten years, personal lending has almost doubled, from $60 billion to $105 billion; most of the lending has been for housing.
Home loans now make up 55% of bank lending, up from 35% ten years ago. The banks borrowed more money to fund property price increases which contributed to a rise in overseas debt.
Between 2003 and 2009 net overseas liabilities rose from $100.6 billion to $176.3 billion; that’s a rise from 76.8% of GDP to 98%.
What have the banks got to do with our volatile exchange rate?
High overseas borrowing has impacted on the exchange rate which is subject to high volatility. The export sector makes up roughly 30% of GDP - about $40 billion per year but suffers the most from currency instability which means uncertain returns.
PROGRESSIVE SUBMISSION ON THE LAW COMMISSION PAPER: ‘ALCOHOL IN OUR LIVES’ I am under no illusion about the challenge involved if we are to seriously reduce the harm caused by alcohol. But doing nothing is not an option.
Alcohol is by far the most damaging drug in the country. It causes between $2-$3 billion dollars worth of economic and social harm each year. The personal cost to families and loved ones is incalculable. How can we measure the cost of a family tragedy?
One of the most damaging drugs we face right now is not even illegal; our kids can buy it in the local dairy; they play sports and have it promoted to them all the time; they see it on TV, on billboards and hear about it on the radio.
The abuse of alcohol amongst our young people is on the rise and it’s destroying lives.
I have been working with others like Dr Doug Sellman of the Otago School of Medicine to raise awareness of the damage that alcohol is causing. We have a unique opportunity right now to do something, through the Law Commission’s review of the legislation to do with the drinking age, the availability and the advertising of alcohol.
Did you know that every advertisement seen by a young person increases the number of drinks they consume by 1%. They become customers for life. And people like you end up picking up the pieces.
Currently, $200,000 per day is spent on marketing and advertising alcohol. About half the marketing is spent on sponsorship.
I welcome the Law Commission’s issues paper which gives New Zealanders a unique opportunity to reform the legal framework in which alcohol is sold, advertised and promoted.
It gives us a chance today to do more to protect New Zealanders from the harm caused by the abuse of alcohol.
The Progressive Party submission calls on the Law Commission to do more in its final recommendations to guide law makers on how to further curb alcohol advertising, particularly to the most vulnerable New Zealanders - the young. I would like to see more options put forward by the Law Commission on how we can greatly reduce the availability of alcohol to young people. I have also given my opinions and made comments on every option put forward in the Law Commission’s paper, ‘Alcohol in our Lives’.
For the full submission: go here.
For my speech to the National CAYAD hui, go here.
"Ten things the alcohol industry won't tell you about alcohol"
Alcohol Action are holding their last two last meetings this week with presenter Dr. Doug Sellman.
The meetings are at: CHRISTCHURCH: Art Gallery Theatre, Tuesday 17th November, 7.30-9pm PORIRUA: Helen Smith Community Room, Wednesday 18th November, 7.30-9pm
There is still time to get in a late submissions to the Law Commission.
Use milk payout to farmers to strengthen industry
It's important that the increase in Fonterra's payout to farmers is used to strengthen the industry, and not squandered.
The increased pay out is very timely for a large number of farmers who have been struggling with higher input prices and enormous costs for financing. Interest rates for many farmers have not come down.
But the risk is that the higher payout will lead to higher farm valuations and in turn to yet more farm indebtedness. That's what happened too often when the milk payout reached $7 a kilo. When the price then dropped, it left a lot of farmers under mortgage stress.
Banks should be careful about getting into the same position of lending against valuations based on favourable milk payouts.
The payout shows New Zealand is well positioned as a food producer to continue to earn a living when global conditions are less than favourable.
When payouts increase as much as this one has, the extra earnings need to be used to strengthen the industry, for example by stronger investment in research and development, and strenthening balance sheets to reduce our exposure to rapacious overseas owned banks.
A generation of kids will be lost – New Zealand must do more
Launch of the Mutima Project in Christchurch
16,000 children are dying from hunger every day because food aid is now at its lowest level in twenty years, but the National government remains determined not to use our aid for ‘poverty reduction.
The head of the United Nation’s World Food Programme recently announced that tens of millions of the world’s poor will have their food rations cut or cancelled in the next few weeks because some OECD countries have slashed aid after the financial crisis.
The Mutima project is a volunteer organisation and will send a team of cardiac surgeons to Zambia to perform life-saving heart surgery on young adults.
I commend them for the strength of their personal commitment and their determination to serve. We are a stronger and more caring community because of people like these Christchurch surgeons. Because of them, a hundred young Zambians will have a second chance at life.
About 60% of the Zambian population are living on less than a $1 per day.
But where is the urgency from the National government to save a generation of children who will die from starvation if the world does nothing?
The National government has recently announced that it will abolish the goal of ‘poverty reduction’ for our aid, and replace it with a goal of ‘economic development’.
I am a strong champion of economic development but you can’t do much business development if people don’t have enough to eat or clean water to drink.
I want to see the National government do more about bad governance and corruption in some of the poorest countries and see New Zealand get behind a new international Natural Resource Charter which sets out ‘best practice’ in countries with natural resources like oil (or copper in Zambia), so proceeds of those resources go to the poorest people and don’t end up in the pockets of the corrupt.
For the speech, go here.
Who owns the ASB? Not us.
The ASB has been an Australian owned bank for the last two decades, and it is misleading the public when it pretends to be a ‘Kiwi Bank’.
The ABS is running promotional ads claiming ‘We’ve been a Kiwi Bank since 1847’.
The truth is we don’t really know who owns the ASB. We know it is owned 100% by the Commonwealth Bank of Australia (CBA), but who owns the Commonwealth Bank?
It used to be owned by the Federal Government of Australia but it was privatised in stages beginning in 1991.
Almost half of the current owners of the Commonwealth Bank are ‘nominee’ companies.
That means their identities are hidden behind other well-known companies, like the Hong Kong and Shanghai Banking Corporation (HSBC).
We don’t really know who owns ASB. All we know for sure is that New Zealand doesn’t.
For the release, go here.
An ‘unfortunate arrangement’
The Auditor General’s findings about Bill English’s accommodation arrangements go significantly further than findings that caused Marion Hobbs and Phillida Bunkle to stand down from ministerial office in 2001. This makes Mr English’s position as finance minister very difficult. I have been in the same position as Mr Key, in having to make a decision on the future of the Minister. A precedent for the right thing to do has been set.
I wrote to the Auditor-General saying Mr English’ arrangements needed scrutiny. The report finds Mr English’s arrangements were not within the rules. The Auditor General’s report states:
The result was that the Crown was renting a property for Mr English from a trust in which he had an interest, and the arrangement was explicitly based on a view that he did not have an interest. Clearly, this was unfortunate.
The report discloses Mr English went to some lengths to arrange his affairs around the accommodation allowance entitlement. That is not a good look for a Minister of Finance.
The Auditor-General’s advice does not even mention other issues that the Prime Minister still needs to consider: that Mr English was giving his Wellington address as his home for the purpose of being a director of a company (incidentally, the company that owns his Dipton investment), but claiming to live in Dipton for the purpose of receiving an accommodation allowance.
A prudent minister might have noticed the contradiction between those two claims.
I have always welcomed the idea of Mr English having his family with him in Wellington. That is not the issue. The question is whether he was right to claim entitlements for doing so. It would not have been in any way objectionable if Mr English had lived in Wellington with his family and claimed an out of town allowance for his occasional trips to Dipton.
For the release, go here.
Nick Smith stigmatises families of suicide victims
15/10/09 13:50 Filed in: News Releases
Minister of ACC, Nick Smith says it was ‘a mistake and wrong’ for the last Labour-led government to support the families of suicide victims through ACC.
“Nick Smith should have the courage to say this directly to the families of suicide victims. It is yet another cowardly and insensitive comment from a Minister who is determined to further stigmatise these families,” says MP for Wigram and Progressive Party leader Jim Anderton.
Nick Smith apologised in parliament today for his comments on TVNZ News last night where he said that the terminally ill might as well ‘throw themselves under a train’ to get the same treatment for their own families as is available for the bereaved families of suicide victims.
“If the children or loved ones of a suicide victim don’t get our support through ACC, then where do they get it from? Is the Minister saying that they don’t deserve our support? Or is he saying that they should go on a sickness benefit?”
“When he said yesterday that the government’s ‘objective is to secure the long-term future of ACC as an efficient and fair 24/7, no-fault insurance scheme for all New Zealanders’, he clearly did not mean the families of suicide victims. He is effectively victimising these most vulnerable of New Zealanders.”
As the Minister in charge of suicide prevention programs in the last Labour/Progressive government, Jim Anderton introduced a program of support for families after a suicide (Postvention). This provided urgent counselling where needed to families, and victim support for those affected.
Nick Smith claims that it is necessary to cut support to the families of suicide victims because ACC has a huge deficit. He said if someone with a family committed suicide, that family could have been given almost $1 million in compensation over time.
“Yet the cost for ACC to give support to a family of three children on an average wage is less than $210,000 over five years. With approximately 350 claims per year, that is about $7 millions per year to all families of suicide victims who make an ACC claim.”
“That is a small cost to pay out of what Nick Smith claims is a $2 billion shortfall annually, to help some of the most vulnerable families in our community.”
“Nick Smith should have the courage to say this directly to the families of suicide victims. It is yet another cowardly and insensitive comment from a Minister who is determined to further stigmatise these families,” says MP for Wigram and Progressive Party leader Jim Anderton.
Nick Smith apologised in parliament today for his comments on TVNZ News last night where he said that the terminally ill might as well ‘throw themselves under a train’ to get the same treatment for their own families as is available for the bereaved families of suicide victims.
“If the children or loved ones of a suicide victim don’t get our support through ACC, then where do they get it from? Is the Minister saying that they don’t deserve our support? Or is he saying that they should go on a sickness benefit?”
“When he said yesterday that the government’s ‘objective is to secure the long-term future of ACC as an efficient and fair 24/7, no-fault insurance scheme for all New Zealanders’, he clearly did not mean the families of suicide victims. He is effectively victimising these most vulnerable of New Zealanders.”
As the Minister in charge of suicide prevention programs in the last Labour/Progressive government, Jim Anderton introduced a program of support for families after a suicide (Postvention). This provided urgent counselling where needed to families, and victim support for those affected.
Nick Smith claims that it is necessary to cut support to the families of suicide victims because ACC has a huge deficit. He said if someone with a family committed suicide, that family could have been given almost $1 million in compensation over time.
“Yet the cost for ACC to give support to a family of three children on an average wage is less than $210,000 over five years. With approximately 350 claims per year, that is about $7 millions per year to all families of suicide victims who make an ACC claim.”
“That is a small cost to pay out of what Nick Smith claims is a $2 billion shortfall annually, to help some of the most vulnerable families in our community.”
Nats’ ACC cuts hit elderly, poor and farmers
05/03/09 13:21 Filed in: News Releases
National’s cuts to ACC and privatisation will mean vicious price hikes and service cuts for the elderly, beneficiaries and farmers, Wigram’s progressive MP Jim Anderton says.
He says new charges for some ACC services will mean low income people can’t afford treatment. Competing ACC providers will mean higher premiums for farmers. And many working people will be left without cover when private providers fail.
“If National charges for some ACC treatment, some low income people won’t be able to afford to pay. That means working people on lower wages, and especially beneficiaries and superannuitants, won’t be able to get treatment if they are hurt in an accident.
“National’s plans mean no rehabilitation for your elderly mum if she falls over in a shop unless someone can cough up for the costs of treatment.
“It is disgusting for the government to save ACC costs by blocking physio and rehabilitation services for elderly New Zealanders. How would a pensioner afford a $50 a week physio fee? Most of them paid their premiums for much of their working lives and national is contemplating increasing their costs at the same time it is cutting tax for the most affluent New Zealanders.
“National’s plans to bring in competition and privatise ACC will put up prices. A report from the previous National-Liberal Government in Australia, comparing accident compensation in Australia and New Zealand in 2004, showed levies in Australia’s competitive market were twice as expensive as those in New Zealand for the primary sector.
“A competitive scheme could result in a levy hike of as much as 250 per cent for rural people like farmers.
“Our ACC administration cost is about a third of Australian schemes.
“In Victoria – where two companies competed so seriously they ran each other out of business – they competed by underfunding the tail. In other words, in a competitive system, companies can go broke and leave liabilities for long term claims unpaid. What happens to people needing long term care for their accidents when the provider goes broke?”
He says new charges for some ACC services will mean low income people can’t afford treatment. Competing ACC providers will mean higher premiums for farmers. And many working people will be left without cover when private providers fail.
“If National charges for some ACC treatment, some low income people won’t be able to afford to pay. That means working people on lower wages, and especially beneficiaries and superannuitants, won’t be able to get treatment if they are hurt in an accident.
“National’s plans mean no rehabilitation for your elderly mum if she falls over in a shop unless someone can cough up for the costs of treatment.
“It is disgusting for the government to save ACC costs by blocking physio and rehabilitation services for elderly New Zealanders. How would a pensioner afford a $50 a week physio fee? Most of them paid their premiums for much of their working lives and national is contemplating increasing their costs at the same time it is cutting tax for the most affluent New Zealanders.
“National’s plans to bring in competition and privatise ACC will put up prices. A report from the previous National-Liberal Government in Australia, comparing accident compensation in Australia and New Zealand in 2004, showed levies in Australia’s competitive market were twice as expensive as those in New Zealand for the primary sector.
“A competitive scheme could result in a levy hike of as much as 250 per cent for rural people like farmers.
“Our ACC administration cost is about a third of Australian schemes.
“In Victoria – where two companies competed so seriously they ran each other out of business – they competed by underfunding the tail. In other words, in a competitive system, companies can go broke and leave liabilities for long term claims unpaid. What happens to people needing long term care for their accidents when the provider goes broke?”
Comment on agriculture - March 2009
12/03/09 13:12 Filed in: Columns
ACC costs are as significant for farmers as they are for any self-employed businessperson. Farming has its share of risk, so the premiums can be higher than in many industries.
I think ACC is far better for farmers than a personal liability scheme such as many overseas countries have. Imagine if farmers could be sued for personal injury to anyone who came on their land.
Currently the National government is getting ACC ready to be taken back to the failed system of the nineties, when businesspeople had to wade through bureaucracy to choose an ACC provider best suited to their needs.
Farmers should beware of a competitive ACC system. Costs are likely to rise far more for farmers than for others. It’s estimated that ACC levies for farmers would rise 250%. That’s three and a half times.
In 2004 the then-government of Australia got an independent report prepared on accident compensation costs over there. It found that levies in Australia’s competitive market were twice as expensive as those in New Zealand for the primary sector.
Not only that, but deadweight admin costs in New Zealand are about a third of the level in Australia.
There’s one thing even worse than higher levies – and that is not getting real coverage for your money.
When ACC is replaced by businesses competing with each other, one way they try to offer lower premiums is by reducing the amount they set aside to pay for claims that take a long time to show up.
This happened in Australia: when those claims finally started to come in, they didn’t have enough set aside. They couldn’t raise premiums to make up the shortfall because their customers would buy elsewhere. As a result, the business went under – and who was around to pick up the bill for the injured farmers who had paid their levies? Nobody. They had to pay all over again.
In the meantime, do you wonder what happened to the executives that ran the company into the ground? They probably got knighthoods. No wonder National wants to bring those back too.
A government that is fiddling around with taking ACC back to the failed policies of the nineties is a government that has its priorities wrong.
There is a global economic crisis underway. There is unprecedented risk and opportunity to our agricultural sector from the way our trading partners see climate change. Market opportunities and development of the rural economy at home are much more important than trying to find ways for insurance companies and money market dealers to make a dollar at the expense of farmers.
I think ACC is far better for farmers than a personal liability scheme such as many overseas countries have. Imagine if farmers could be sued for personal injury to anyone who came on their land.
Currently the National government is getting ACC ready to be taken back to the failed system of the nineties, when businesspeople had to wade through bureaucracy to choose an ACC provider best suited to their needs.
Farmers should beware of a competitive ACC system. Costs are likely to rise far more for farmers than for others. It’s estimated that ACC levies for farmers would rise 250%. That’s three and a half times.
In 2004 the then-government of Australia got an independent report prepared on accident compensation costs over there. It found that levies in Australia’s competitive market were twice as expensive as those in New Zealand for the primary sector.
Not only that, but deadweight admin costs in New Zealand are about a third of the level in Australia.
There’s one thing even worse than higher levies – and that is not getting real coverage for your money.
When ACC is replaced by businesses competing with each other, one way they try to offer lower premiums is by reducing the amount they set aside to pay for claims that take a long time to show up.
This happened in Australia: when those claims finally started to come in, they didn’t have enough set aside. They couldn’t raise premiums to make up the shortfall because their customers would buy elsewhere. As a result, the business went under – and who was around to pick up the bill for the injured farmers who had paid their levies? Nobody. They had to pay all over again.
In the meantime, do you wonder what happened to the executives that ran the company into the ground? They probably got knighthoods. No wonder National wants to bring those back too.
A government that is fiddling around with taking ACC back to the failed policies of the nineties is a government that has its priorities wrong.
There is a global economic crisis underway. There is unprecedented risk and opportunity to our agricultural sector from the way our trading partners see climate change. Market opportunities and development of the rural economy at home are much more important than trying to find ways for insurance companies and money market dealers to make a dollar at the expense of farmers.