Harawira wants to spend ACC fund on policies

In an interview on The Nation this morning Hone Harawira was asked how the Mana Party proposed funding their policies. Harawira suggested raising taxes “on the rich” and using the ACC fund would help pay for them.

Lisa Owen: So, to be clear, you think you can cover several billion dollars worth of spending through taxation?

Hone Harawira: That’s one of them, there’s another one as well. Did you know there’s 22 billion dollars sitting in the hands of ACC, simply amassing wealth, amassing wealth through the corporatisation of injury? There’s something wrong with that notion. That money should be spent on the needs of New Zealanders, not on investments which are aimed at maximising the wealth of the corporates that are running it.

http://www.voxy.co.nz/politics/nation-lisa-owen-interviews-hone-harawira/5/187533

How big is the ACC fund? NZ Herald reported ACC fund doubles to $24.6 billion.

Latest figures show ACC’s investment fund was worth $24.6 billion.

The ACC Annual Report summarises their financial position as at 30 June 2013:

ACC Financial Position 2013So even though they have $24 billion ACC say they need to increase this to cover their liabilities.

This would mean maintaining existing levels of income to grow the fund. ACC explains how they’re funded.

The money we need to provide our services comes from levies on people’s earnings, businesses’ payrolls, petrol and fees from vehicle licensing, as well as Government funding. When working out how much money to collect through levies, we balance the likely cost of claims against the need to keep levies fair and stable. We distribute the money collected into one of five ACC Accounts, each Account covering a specific group of injuries.

If the fund was reduced then over time the Government would have to pay more to cover ongoing costs, so using up the fund now would cost taxpayers more later.

Mana Party draft policy supports returning to ‘pay-as-you-go’ for ACC. From their (Draft) ACC Policy:

MANA supports the principles originally formulated by Justice Owen Woodhouse in his 1967 Royal Commission report, in which he recommended setting up a new, universal, 24 hour, no-fault system for accident compensation and support. The five principles are: community responsibility; comprehensive entitlement; complete rehabilitation; real compensation; and administrative efficiency.

MANA believes that everything should be done to return ACC to the Woodhouse principles so that individuals and whānau are protected and supported when people suffer injury.

Key policies include:

  • Government to return to ‘pay as you go’ for ACC, rather than expecting ACC to collect enough money to cover all future costs in each year.
  • Make health and wellbeing the priority, rather than forcing people off ACC as quickly as possible.
  • Get rid of the vocational independence (work capacity) test which is unnecessary and is often used simply as a way of forcing people off ACC at the soonest possible opportunity.
  • Ensure that people who suffer from work-related gradual process injury, disease or infection, including from chemical poisoning, and from hearing loss induced by industrial noise, receive full cover from ACC.
  • Require ACC to continue cover as long as an injury remains a cause of a person’s current condition, rather than using pre-existing conditions or age related degeneration as an excuse to withdraw support.
  • Remove the inequity in access to services and healthcare between ACC and Ministry of Health clients, bringing all recipients to the higher level of access to resources.

So Mana want to dig into the ACC fund and spend it on their social policies while adding to ACC coverage and costs with their ACC policies.

To do this they would need agreement from Labour.

David Parker: ACC levy equals 350 years of Govt funding for food in schools

“The Government is taking $700 million more than is needed from New Zealanders through ACC levies over two years. That’s a stealth tax, pure and simple. They’ve been advised to reduce it but are still overcharging New Zealanders.

“That money is enough to cover the Government’s new role in feeding the kids for 350 years. That’s how badly Kiwis are being ripped off.

“The Government is using ACC as a political jelly bean jar, overcharging New Zealanders to fill to the jar to overflowing in order to dole out lollies in election year for political advantage.

“This isn’t prudent financial management, it’s taking directly from New Zealanders’ back pockets to try to win an election,” says David Parker.

Mana are trying to win an election by promising to spend from the ACC fund.

Sue Moroney: ACC levies higher than they need to be

“Money collected in ACC levies can’t be used to fund anything else, as it is ring-fenced for injuries resulting from accidents, so its use to prop up a sham surplus is misleading.

“That money would be better off circulating in the economy, than being tied up in an ACC’s coffers where it is not needed,” Sue Moroney said.

https://www.labour.org.nz/media/acc-levies-higher-they-need-be

This is just opposition and election rhetoric, there’s no guarantee Mana would get a say on use of the ACC fund and there’s no guarantee Labour would substantially change how ACC operates and is funded.

Mana want to spend from the ACC fund. Labour want to reduce levies. Mana want to increase payouts.

Is that affordable? If so who should pay?

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