Friday, March 2, 2012

Time to Abandon Fraudulent ACC Scheme

New Zealand has a socialised accident compensation scheme run by a government agency called ACC.  Originally intended as a workers accident compensation insurance fund, ACC has become anything but.  What it has really become is a parallel welfare system and an attractive prospect for those who think that someone else should support them.

There are several aspects of the scheme that, in my view, make it inherently corrupt.

The first is that when it was introduced, the right to redress for injury under common law was prohibited.  This has led to a culture of non-accountability in New Zealand.  Criminals can assault with little prospect of financial penalty for their actions, likewise negligent employers and traders have little incentive to ensure the safety of their workers and customers.

The second is that its original purpose seems to have been turned on its head.  It is now, in my experience, almost impossible to get compensation for a genuine work-related injury.  The only time I have tried to claim compensation in recent years (a small claim for physiotherapy on a neck injury) I was actually told that if I had incurred the injury on the sports field or the skifield I would be able to claim but because I got the injury at work, I couldn't.

The third issue is that it is hideously expensive.  Premiums for employers and self-employed peope are supposedly based on risk factors.  But I have a sedentary, office-bound profession and the only injury I have ever incurred is the one mentioned above.  Yet my premium, at around $4000 per annum, is twice what it costs me for full health insurance for my family, a policy on which we frequently make claims.  In my case it is money for absolutely nothing.

The scheme is meant to be user-pays but it seems to be selectively so.  Motor cycle riders are charged around $400 a year on top of their vehicle registration as an ACC contribution but bicyclists (or rugby players, to take another example) are charged nothing.  My premiums must be going to subsidise others who are in genuinely higher risk categories than me and I suspect the portion of premiums paid out of taxes for non-workers and non-work injuries does not cover anything like the true cost of these claim.

The worst thing about it all is the scheme's dishonesty.  It is not, and never has been, an accident insurance scheme.  What it is really is a parallel welfare system funded by an additional dollop of tax on the most productive is society and it allows the NZ Government to hide this extra tax under the pretence of an insurance scheme.  It is dishonestly abused by work-shy layabouts, who are occasionally exposed on video as perfectly capable of working when they have been drawing accident compensation payments for years.

It is time we abolished the pretence of this fraudulent scheme and returned to private insurance provision and the right to seek redress in the courts.

1 comment:

libertyscott said...

Indeed, well said.

A good first step would be to shift everyone to individual accounts and open it up to competition, so people can insure for their own accident risk.