McCarten on ACC

Matt McCarten writes in the HoS:

One hundred thousand workers on the legal minimum wage of $12.50 an hour get 25 cents added to their hourly wage this week. Thousands of others between the minimum and $12.75 an hour will get a top-up.

Given that we have a recession, many people may think those workers should be grateful to John Key for giving them anything. As Key said, at least the 25 cents would cover inflation, making them no worse off, and a group of low-paid workers told me this week that “it’s better than nothing”.

But as with many stories about workers and their relationship with the employment system, all is not as it seems. The fact is that, from today, low-paid workers will be worse off than they were this time last year even after the supposed largesse from our Prime Minister, because their Accident Compensation levies go up this week, too.

The Government hopes workers won’t notice, but those on the minimum wage will have an extra 3.75 cents an hour automatically deducted from this week’s pay packet.

It’s a tax increase, although National pretends it’s not. What is galling is that the levy increase is being imposed to ensure ACC can show a big profit and then be flicked off as a cash cow to some multinational after the next election.

Matt is right that ACC premiums are going up, from 1.7% to 2.0%.

However what he overlooks is that National’s pruning of ACC has prevented the premiums from going up even further. The massive unfunded liabilities left by Labour would have pushed the employee ACC levies up to over 3.0% of income.

Matt was one of those protesting the pruning of ACC’s costs, so for him to them protest about the levy increase is rather hypocritical.

This is not Disneyland, where you can have the costs of ACC increase, but not have levies increase.

And frankly the idea that anyone would buy ACC is as nonsensical as the notion that anyone would buy Kiwirail.