Must it be this bad?

OPINION: That belt-tightening exercise we're enduring with ACC – there comes a point where what you've got is no longer a tightened belt. It's a tourniquet. Confuse the two and something's going to blacken and fall off, writes The Southland Times in an editorial.

Many eyes are bulging at the severity of the huge rises to ACC levies, and the toughening up of the qualifying criteria. These measures, including an extra $320 a year coming out of the average wage (which actually seven out of 10 workers are on or below), do need scrutiny for over-reaching.

There are some who will go further and see an agenda towards privatising the whole shebang.

It is simultaneously true that ACC is in need of corrective measures and that its financial situation has been portrayed as considerably more parlous than it really is.

Yes its liabilities, as things stand, cast a long shadow. More people have been coming on to the books for compensation, and are shaping up to be staying there for longer, than we would be able to sustain unless something changes.

But the liabilities are quite rightly under regular review because the picture does change. It's not unreasonable to look at cost-cutting measures but there are other ways for that shadow to shorten.

It's entirely on the cards that the corporation will be getting improved returns from those $10 billion of reserve assets as interests rates improve, particularly given that this is one investment fund that has been well managed. It achieved an $187 million gain in the latter half of last year.

What's more, the scheme has been on a schedule to make it fully funded (so there's enough money allocated the year of your accident to cover the future costs of your injury). That transition was scheduled to be achieved by 2014, though the happy day has been pushed back to 2019, which eases a lot of pressure.

There's an extent to which the Government has been minded to make hay while the sun isn't shining. Finance Minister Bill English sees this as a time for New Zealand to "challenge ourselves a bit". He wasn't talking about ACC, but about our national borrowing. While global interest rates are low – or certainly lower than they're going to be – the Government borrowing more than strictly needed, to the tune of some $5 billion in just the past few months. We're getting in and borrowing while the interest rates are lower, the better to improve our climb out of the recession.

We need to be suspicious that the Government is keen to get as much self-challenging into the national agenda as it can, and that ACC is caught up in this. That is not inherently unreasonable, but the case for each painful correction needs to be proved.

Some of the ACC entitlement cutbacks will sail past public scrutiny, though the ineligibility of the burnt P-cook is rather easier to accept than that of the distressed figure who, in a mad moment, deliberately injures himself. Or of the families of suicides. We are a tenderhearted nation and that is not, usually, a failing.

One clearly contentious change will be the heft of the increase being applied to motorcyclists' licensing levies. Motorcyclists are 16 times more likely than any other road user to be involved in a crash, but as things stand they are being slammed for their injudicious participation in a practice that, their fault or not, is dangerous. Now this will make a particularly feisty part of the ACC debate. Hopefully, it will be only one of many.

- © Fairfax NZ News

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