As the turmoil from the Bronwyn Pullar/ACC scandal subsides, it could lead into a worthwhile debate about how New Zealand’s innovative, no-fault insurance scheme is funded.© 2012 The Gisborne Herald
The present full-funding system, established in 1974, has been attacked by the Greens who want to switch to a pay-as-you-go system. That would see levies set at a level needed to meet the current costs of the scheme, with a buffer for unexpected events. Its greatest appeal is that it would see an immediate drop in ACC levies, which would be a huge relief for many small and medium-sized businesses.
The object of the fully-funded scheme is to ensure the corporation has enough in reserve to meet its current costs and the future costs of existing claims. It has a goal of reaching that by 2019 and so far has assets of $24 billion, just $4 billion below the target.
The principle of full funding is not applied to other social spending such as health, welfare or education. But with the corporation now so close to reaching its goal, would it be wise to change course?
ACC Minister Judith Collins, who will be far from grateful at getting such a poisoned chalice, is against the pay-as-you-go system — making the good point that future generations would be burdened with the cost of today’s injuries as well as their own.
It seems we are already piling up enough costs for those who will follow — environmental especially.
However, if ever there was a good time to look closely at how ACC is funded and the philosophy involved it is now, with half of the eight-member board having resigned because of the Bronwyn Pullar scandal. This creates an opportunity to bring in fresh faces and some dynamic new thinking — not only to change the corporation’s culture and repair its image, but in setting its future direction.
For Ms Collins, it is an opportunity to create something good from actions and attitudes that have caused harm. Let’s hope she takes it.
http://www.gisborneherald.co.nz/opinion/editorial/?id=28189
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