Labour against tying premiums to risk!

Stuff reports:

Labour is accusing the Government of rewarding those with “flash” cars at the expense of older and poorer owners, with ACC levies tied to vehicles safety ratings.

The new risk-rating ACC regime, which kicks in next month, means some owners of older cars will pay $158.46 annually – 52 per cent more than the $104.09 they would have paid without the differentiated system

Labour ACC spokeswoman Sue Moroney said more than a million owners would pay more than necessary.

Labour once again being silly. First of all the differentiated system collects the same amount of money in total. If you charge older less safe cars the same as newer more safe cars, then the fee for newer cars would be more.

ACC Minister Nikki Kaye said the purpose was to improve safety and the regime gave incentives to have safer vehicles.

About 50 per cent of older vehicles were in the safest band.

“There is a bit of a myth out there you have to have the flashest car to have the safest vehicle – that’s not correct.”

She said she understood many people did not have the choice to buy another car, but if they were choosing between two cars they could choose the safer one.

But Moroney questioned whether targeting the cost of registering a car was the best way to improve safety.

She asked if the system meant “the superannuant who’s never had an accident in her life, who happens to drive an older car because she’s on a fixed income is less safe than the corporate executive who’s just been to the long boozy lunch and gets in his Merc to drive away?” 

Now Sue Moroney is basically arguing to abolish ACC as a no faults scheme!

Tying premiums to risk is sensible and what happens with other levies such as the employer levy.