ACC board chair accused of political actions

BY TRACY WATKINS

Accident Compensation Corporation board chairman John Judge today rejected an allegation he had acted politically over ACC levy proposals.

At a select committee in Parliament today Labour ACC spokesman David Parker questioned Mr Judge's motivation for issuing levy increase proposals that did not take into account a pending law change which would make them much lower.

ACC was legally required to recommend levies based on current legislation but Mr Parker said accurate information could have been presented and the board had not bothered to seek approval to include that in its press releases.

ACC Minister Nick Smith this afternoon released final increases that were lower than ACC proposed.

Mr Parker alleges that the Government scaremongered by allowing publication of the high proposed increases to worry people and make the actual increases more palatable while also preparing the public for user pays and further claw backs.

"Do you think there's a danger that you could be perceived as being politicising these arguments rather than simply implementing the law, if on one hand you say `we should be looking at cuts to cover', but on the other hand you say `well I'm sorry I'm only bound by the existing law when it comes to the notification of rates`?" Mr Parker asked.

Mr Judge said information in appendices of consultation documents reflected levies should the law pass.

"I see my role not as supporting one side or another but clearly saying to this group and any other group that the scheme as it was unsustainable, that one needed to either increase levies or decrease costs/entitlements," he said.

"Most of those decisions are political. Some of them are not, but I would not be doing my job if I didn't bluntly report what the facts of the matter are."

A bill is before Parliament to extend the date for full funding for residual claims liabilities from 2014 to 2019.

The bill also reverses extensions made to the scheme in recent years.

It allows for compensation for casual and part-time workers to be calculated to reflect their earnings over the past year rather than the past four weeks to prevent them earning more on ACC than when working. It reduces compensation for loss of earnings for non-earners from 100 per cent to 80 per cent. Another change requires holiday pay to be used first before ACC payments are made, while families of those who commit suicide or people who harm themselves will no longer be eligible for compensation.

Mr Parker today released a Cabinet social policy report that highlighted some risks associated with the changes.

They included concerns that the bill was contrary to the New Zealand Suicide Prevention Strategy, that claimants may find the holiday pay change unfair, and that costs would be transferred to the welfare and health systems

Asked about Mr Judge's performance, Dr Smith said he supported him.

"I have total confidence in John Judge. He has taken on an organisation that has huge difficulties and in his first year I think he has made good progress in getting ACC into good shape."

He was asked about views Mr Judge reportedly expressed about the appropriateness of the Crown owning an insurance company with a long tail.

Dr Smith said he had no difficulties with Mr Judge expressing views but made it clear the Government intended to retain ACC in public ownership.

Dr Smith defended changes in the bill as necessary for ACC's future.

NEW LEVIES

Confirming the new levies today, Dr Smith said registration rates for motorcycles would range from $327.70 to $426.92, compared with rates of between $511.43 and $745.77 under rates proposed by ACC. But that is still an increase of between $75 and $174 for the owners of petrol powered motorcycles.

Registration costs for petrol powered cars will rise to $198.46 – up about $30 on the current rate but less than the $272.72 proposed by ACC. For non-petrol cars, the rate has risen $311.38, up from $279.09.

The work levy has gone up to $1.47 for every $100 of payroll, compared with $1.31 now.

The earners levy has risen to $2 for every $100 earned, compared with $1.70 now.

Dr Smith said the levy increases were necessary because ACC’s claim costs had increased by 57 per cent in the past four years.

He said the Government had opted for more moderate motorcycle levy increases than ACC recommended but his message to motorcyclists was that the escalating costs of motorcycle accidents could not be ignored.

BIKERS MULL NEW LEVIES

Bikers Rights Organisation of New Zealand president Les Mason, one of the organisers of last month's protests, said the hikes were "liveable with".

"We're pleased that the Minister has recognised that the original ACC proposals were unjustifiable but that is still a very substantial levy hike."

He said bikers harboured concerns that further hikes would be proposed next year.

"They haven't got what they wanted this time so it seems a pretty likely bet that they'll try for it again next year."

He would not comment on whether protests would carry on, saying it would be up to the BRONZ membership.

"Obviously the motorcyclists of New Zealand will be having a think about that over the next couple of days and they'll come back to their representatives and tell us what they want to do," he said.

"We need to make it clear to ACC that this is not something they can try again."

However November's Bikoi organiser Brett Hutchison warned that they would be taking further action.

"They didn't trim anywhere near enough to make us happy," he said.

He said he had been in discussions with several of the major unions, which he would not identify, and said a planned protest in February could draw as many as 20,000 people.

"We're going back in huge numbers."

The focus on motorcyclists was a "red herring" to distract people's attention. Wage earners and employers were yet to realise the fact that they too would be affected, he said.

- with MICHAEL FOX, Stuff.co.nz, NZPA