Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the Accident Compensation Corporation reporting a $7.2 billion deficit

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Jenee Tibshraeny: NZ Herald Wellington business editor on the Accident Compensation Corporation reporting a $7.2 billion deficit · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 2: Trainee is The Herald's Wellington business editor with us now
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  Speaker 2: hey today, Hey, you know how has ACC gone from
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  Speaker 2: a nearly billion dollar surplus last year to a seven
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  Speaker 2: billion dollar deficit this year? What happened?
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  Speaker 3: Good question? Now, A number of things contributed towards this.
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  Speaker 3: One of the things that ACC pointed out was the
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  Speaker 3: fact that it's taking people who get injured longer to
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  Speaker 3: get rehabilitated, to get their injury sorted and to get
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  Speaker 3: back to back to work. Now, I thought, well, well
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  Speaker 3: that's interesting. You know what, what's what's changed. And one
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  Speaker 3: of the things that pointed to was the problems in
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  Speaker 3: the health sector, the staff shortages. It means it's taking
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  Speaker 3: people longer to be seen by a health professional, and
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  Speaker 3: then it's also the gap between consultations with a health
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  Speaker 3: professional is also increasing. So all of that means we
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  Speaker 3: are staying injured productive for longer and that's weighing on
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  Speaker 3: ACC's books. Another thing that it pointed to was a
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  Speaker 3: particular court case that wrapped up that increased the number
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  Speaker 3: of people entitled to ACC cover. Now, this is quite
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  Speaker 3: a curly court ruling, but it relates to people who
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  Speaker 3: were sexually assaulted as children, and it relates to their
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  Speaker 3: ability to get ACC cover for the mental injury that
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  Speaker 3: they suffer as an adult due to that childhood use
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  Speaker 3: that they suffered.
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  Speaker 2: Is it the mental injurycause? First of all, obviously the
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  Speaker 2: people that are being covered here are new, but the injury,
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  Speaker 2: the mental injury, is that new as well.
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  Speaker 3: It's basically the coverage. So there's a complicated thing around
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  Speaker 3: when ACC recognizes when you receive the injury. There's a
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  Speaker 3: technical thing that's changing around the recognition of that. But
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  Speaker 3: this is actually really really significant. So this particular court
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  Speaker 3: ruling means that ACC will pay an extra about three
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  Speaker 3: point five billion dollars to people who are currently injured
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  Speaker 3: due to past trauma, pasted injuries into the future. So
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  Speaker 3: you know that that is a really significant thing. Now.
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  Speaker 3: I sat down today here with the CEO and the
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  Speaker 3: DPCO at ACC for about a half an hour and
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  Speaker 3: nothing one of this out. And the thing is is
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  Speaker 3: that there are laws which ACC operates under. But then,
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  Speaker 3: like everything, things got to court and that tests the law,
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  Speaker 3: and this particular ruling really seriously expands the scope of
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  Speaker 3: who could be eligible for ACC cover Now. It's so
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  Speaker 3: this particular thing around the sexual offending is so major
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  Speaker 3: that ACC is actually still working through the details of
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  Speaker 3: exactly how it's going to deal with it and pay
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  Speaker 3: out billions of dollars more to a whole bunch of
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  Speaker 3: people who weren't previously eligible.
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  Speaker 2: So what can they do about it? I mean, I've
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  Speaker 2: obviously got if these people are now eligible, they're going
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  Speaker 2: to have to cover the people. What can they do
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  Speaker 2: to actually try to get the books back into the black?
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  Speaker 3: Well, this is where it gets rather narai. For the government.
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  Speaker 3: ACC has been proposing quite significant levy hikes. So that's
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  Speaker 3: you know, lev's that we all need to pay to
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  Speaker 3: keep the system going. You know, that's to pay for
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  Speaker 3: all the things we've just covered, also just general inflation.
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  Speaker 3: The government ACC's made recommendations, it's consulted on those levy hikes.
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  Speaker 3: The difficult thing here for the government is that, you know,
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  Speaker 3: they're a government of low taxes, so it might be
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  Speaker 3: a hard sale for the government to come to all
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  Speaker 3: of us and say, hey, we're putting the ACC levees up.
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  Speaker 3: But the other tricky thing for the government is that
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  Speaker 3: it's also committed to reducing its deficit. So last week
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  Speaker 3: we learned that the government's books are about twelve billion
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  Speaker 3: dollars in deficit. Now ACC's deficit has contributed four billion
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  Speaker 3: dollars to that deficit. So the worst ACC does, the
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  Speaker 3: worse the government's books. Does you know in the government
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  Speaker 3: saying we're going to get the books back in surplus.
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  Speaker 3: A way to solve that is to increase the levies.
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  Speaker 3: But the government has also that's also going to be
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  Speaker 3: a hard selle. Yeah, popular to the populace. So to me,
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  Speaker 3: this really comes largely down to a number of things.
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  Speaker 3: But you know, these issues in the health sector that
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  Speaker 3: we're struggling with that are affecting sick people, injured people,
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  Speaker 3: are now actually affecting the government's books as well.
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  Speaker 2: Yeah, fascinating. Hey Jina, thanks for talking. Story to really
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  Speaker 2: appreciate it is generated trainee. The heralds Wellington Business edits.
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