Friday, February 17, 2012

Strapping the chicken

This year, the government is planning to open up ACC to private-sector competition. The problem? ACC is already hyper-efficient, and so the ideologically more efficient private sector wouldn't be able to compete. Fortunately, Nick Smith has a solution: force ACC to hike levies, to give an advantage to private competitors:

The Government is considering raising Accident Compensation Corporation levies just months after it decreased them, Cabinet papers released to a claimants lobby group show.


ACC Futures Coalition spokeswoman Hazel Armstrong said today papers obtained under the Official Information Act showed former ACC minister Nick Smith was looking at making the corporation charge a ''top up'' on its premiums so private insurers could compete on a level playing field.

So, National's plan is to make ordinary kiwis pay more for their accident insurance, to their mates in the bloodsucking Aussie insurance industry can make bigger profits. So much for a government that works for us. But its gets worse, because Smith isn't just planning to hobble ACC, he's planning to raid their piggy-bank as well:
ACC would also be required to pay built up reserves to the Government to ''avoid a build-up of excess reserves that could reduce financial disciplines or be used by ACC to reduce its prices (which would make it difficult for insurers to compete)''.
Those reserves exist for a reason: to fund the lifetime cost of claims, both past and future. ACC is required to hold them by law (as should any insurance company). Raiding the piggy-bank will mean ACC is not able to fund those claims (well, not unless it hikes levies even further). But it will give the government access to a pile of cash, which they can use to mask the terrible effect on government revenue of their tax cuts for the rich.