Final blow for Election Promises - what about ACC?
It’s a bit of a lolly scramble with what political parties are promising us. What I always find super interesting is that all the things they are promising is something that actually comes from our money in the first place!
What I also find interesting is that no political party ever mentions ACC at election time.
Why is that?
Aside from Kiwi’s actually being quite inherently proud of the ACC scheme, there also seems to be an unwritten rule that no political party talks about ACC at elections.
I find this troubling especially given that employers contribute over $3 billion to the ACC scheme via the work levy, earners levy and motor vehicle levy. This is 62% of ACC’s total revenue that comes from business.
ACC has made very poor decisions over the last 10 years that resulted in that in 2025 resulted in ACC being put in a position that if they did not sort out their issues, it will be in deficit by $26.3 billion by 2030.
What? How is that even possible?
As Dr Oliver Hartwich from the New Zealand Initiative notes in his ‘ACC – Half a Turn Around report’, ACC has made very poor operational and strategic decisions over the last 10 years that has directly resulted in cost blow outs, programmes being cancelled, ACC focusing on the wrong areas, etc.
Treasury equally has been damning of ACC’s position and all of this led ACC, at the request of the Minister, to introduce the ‘ACC Turn Around Plan’. In simplistic terms, this where ACC has identified key areas it needs to fix and it will report on these monthly.
There are a couple of areas I would like to point out as to why ACC should be a political football this election.
1] ACC will not turn a $26.3 billion dollar gap around by cutting cost. Part of this cost is claims liability which sits outside the day-to-day operations (income and expenses). ACC generates $5 billion a year in revenue. Realistically, given that 62% of this comes from levies employers pay, the only logical way ACC will sort themselves out is to increase revenue aka increase levies.
2] Our current Finance Minister has removed ACC liability from her books. Specially, the OBEGALx Metric now excludes ACC completely. This measure completely excludes ACC revenue and expenses from day-to-day government balance calculation. The reason she did this is because ACC is in such a poor state, it made the overall figures look rather poorly.
None of this is good news.
We need to be covering ACC in the public debate this election. Aside from this being our money they are playing with, ACC is also failing us in removing the much needed support structures underpinning New Zealand Inc; removing or greatly reducing timely and appropriate rehabilitation; terminating long-term claimants without employment outcomes (thereby moving the liability to the Ministry of Social Development; and this is before I start highlighting the impact on employers.
Why wouldn't politicians want to discuss this?