Matt Doocey: ACC Minister on the agency's $7.2 billion deficit

The Minister in charge says ACC needs to lift its game.  

The government agency has reported a $7.2 billion deficit, just a year after posting an almost $1 billion surplus.  

It says the cost of services and compensation rose 16% over the year.  

It's proposing to hike levies for vehicle owners, workers, and business owners.  

Minister Matt Doocey told Ryan Bridge he doesn't expect levies to be used as default.   

He says they have to focus on their rehabilitation rates, which have been lower than expected. 

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Episode Transcript

Speaker 1 (00:00):
ACC's announced to seven point two billion dollar deficit for
the year to journe This just after a year after
reporting a surplus of nine hundred and eleven million, and
it's got everyone on the text machine saying what how
does that happen? It comes as the ACC is looking
to raise levies for twenty twenty five to twenty twenty eight.
This is to help pay for increasing costs. Matt Doucy

(00:20):
is the ACC minister. He's with me this morning. Minister Mordenna,
Good morning Morlene.

Speaker 2 (00:25):
To mother a Ryan, good to have you.

Speaker 1 (00:27):
On the show. Tell me, first of all, how bad
is this on a scale of one to ten? How
worried are you?

Speaker 2 (00:34):
Oh? Look, I think it's hugely concerning. I think ACC
quite frankly needs to lift its game, but I think
we do need to take a step back. I mean
ACC celebrated its fiftieth birthday recently. It's a big institution
in New Zealand. In the last financial year it's settled
about seven billion dollars worth of claims, four billion for
treatment costs, about three billion for a weekly compensation. We're

(00:59):
not talking about any financial sustainability risks in the short
to medium term. It's more about when you look at
what's called the OCL the outstanding claims liability for long
term and what we've seen through some factors like inflation,
treatment costs, population growth, we've seen significant rise in the

(01:21):
outstanding claims liability. But on saying that, there's two areas Ryan,
One is factors that are inside accs controls stuff that's outside,
like sometimes inflation and treatment costs. But I think they've
really got to focus on their rehabilitation rates. We've seen
them continue to decline and that's a big area that

(01:42):
I think that they can focus on to improve their position.

Speaker 1 (01:45):
You mentioned the population growth. I mean, if the population
is growing, there should be more people paying into the
system too, right, So can't we cancel that one out.

Speaker 2 (01:54):
Potentially? But when you look at sometimes the exponential factor
in the claims, it's what they've actually seen this year,
specifically the people claiming. They have seen more people claiming.
But like I say, there is levers inside their control
injury prevention. Does that rehabilitation rates.

Speaker 1 (02:14):
When more people are is that over and above population growth?
Are we having more accidents when?

Speaker 2 (02:20):
Why? Yeah? I think quite crudely, when you look at
those statistics, you could draw that conclusion. I don't have
the details on why that is, but like I say,
there's an ability for ACC to focus on the levers
that they have in their control. Our rehabilitation rates have
been declining over a number of years, so I've made

(02:42):
it very clear that there is to be the primary focus.
But also want to touch on another area, which is
about a third of that significant increase, And what that
is is court rulings that have changed some of the
entitlements and what we call boundary issues of their two generals.

Speaker 1 (03:02):
Is it too generals?

Speaker 2 (03:03):
Well, what the court has ruled in one area has
significantly increased the OCL by three point six billion dollars alone.
So those are areas that we need to look at all, right.

Speaker 1 (03:16):
Well, very quickly, we literally have ten seconds left. Will
this mean levees will have to go up substantially? What
will it mean for us they're actually paying into it
almillst things be cut.

Speaker 2 (03:27):
I won't get ahead of cabinet decisions, but what I
would say is that levees are only one lever, and
I don't expect levees to be used by default. I
expect ACC to lift their game around rehabilitation rates because
they should be ensuring that they are utilizing the income
they're getting from New Zealanders at the moment.

Speaker 1 (03:47):
Fairly, Matt, dc ACC minister, thanks so much for your time.

Speaker 2 (03:51):
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