October 16, 2024 • 7 mins
The head of ACC says they're working hard on improving rehabilitation performance.
The government agency has reported a $7.2 billion deficit 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.
ACC Chief Executive Megan Main told Mike Hosking levies have been held flat or reduced in the last decade, while costs have been increasing.
She says they need to make sure over the long-term the settings are right, to balance costs with how much money is coming in.
Main says the big driver of the deficit is the re-calculation of the lifetime costs of injuries that have already occurred.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Acc back in trouble again. They've got themselves a seven
billion dollar hole, and when they balance the books, it's
us who pays, of course, so libbies are going to
have to go up a CC's chief executive, as Megan Maine,
who is with us good morning, cur to make So
from the black last year to the red this year
to the tune of over seven billion dollars, does that
make you sort of health New Zealand two point zero.
Speaker 2 (00:21):
Look, there's a couple of things going on with that number, Mike.
In terms of the deficit, there's the money we spend
during the year, which is about seven billion, which is
about what we budgeted. But the bigger factor is the
calculation today of the lifetime cost of the injuries that
have already occurred, and that that recalculation is the is
(00:42):
the big driver of that seven point two billion dollar deficit.
That lifetime calculation went up by eight point seven billion during.
Speaker 1 (00:51):
The year, Right, is that it gets.
Speaker 2 (00:56):
It's a it's a mathematical estimate by actuaries who use
a lot of assumptions. They use economic assumptions, population assumptions,
inflation assumptions, so it's a best estimate and the three
aspects to it. Really, one is the expected cost increase.
The scheme is still growing. Even at fifty years. We
(01:16):
still get more claims coming in than exit each year,
so that's a big part of the increase. The unexpected
aspect this year was a couple of court decisions which
landed in December.
Speaker 1 (01:29):
Just sorry, hard, let me ask you about those. Are
those parts my understanding of those court cases as you
haven't worked through the implications. Is that true or not.
Speaker 2 (01:38):
We're working hard to work through what those decisions mean.
We have started applying it though, from the date of
the court decisions, so we've got interim guidance that our
experts staff are using with current and new clients who
are victims of sexual assault. But it will take a
while to work through the full cations and how we
(02:01):
operationalize that.
Speaker 1 (02:02):
So you've been lumped with that. This is the stuff
I feel sorry for you. I mean, not that they
shouldn't rule the way they did. I'm just saying that
suddenly you wake up one morning, there's a court case
and there's a whole bunch of clients that you didn't
know you were getting.
Speaker 2 (02:13):
Yeah, well, and you know, Mike, this is a really
complex area of the law on acc boundary issues. You know,
this is about people who were sexually abused as children,
so we need to step through this really carefully with them.
And so that's what we're doing, and that you know,
that's what our teams are doing.
Speaker 1 (02:33):
How much did I do?
Speaker 2 (02:36):
But there's a third aspect of the increase, and that's
rehabilitation performance, and that's the thing we're really focused on.
That's the thing most in our control, you know, making
sure our case management is working for people. And frankly,
you know, the best thing we can do for our
clients the New Zealand productivity and for the scheme long
(02:58):
term is help people get better faster and also importantly
you know, remember that we want people to avoid getting
injured in the.
Speaker 1 (03:06):
First l correct. I'll come to that in a moment
if we get time. But this whole remember, I mean
you may not have been here at the time, but
remember years ago, the physiotherapists were ripping off the system left,
right and center, and you went along for twenty seven
hundred sessions when you only needed three. Is there still
a bit of that in the system.
Speaker 2 (03:22):
Look, it's an entitlement scheme, you know, and we need
to make sure that we're giving people the support they need.
Speaker 1 (03:29):
You have how much support as I'm paying for it?
I mean, do you need to rut me down for
the rest of my life or do we need to
get back to work?
Speaker 2 (03:35):
Yeah? Yeah, Look, we're very mindful of fraud, of over payments,
of over servicing, and we also work really closely with
IRD to make sure that the people are getting the
payments they're entitled to. But you know, your example is
a good example of making sure that from a case
management point of view, we're working closely with clients, particularly
(03:56):
clients receiving weekly compensation they're off work. You know, we
know there's so much evidence that being off work is
not good for you, it's not good for your well being,
and so we really want to make sure we're giving
people what they need, not giving them more than they need.
We don't want to get people dependent on the scheme.
Speaker 1 (04:15):
When Doocey comes to you as minister and go seven
point two, I get it, but just don't go around
charging people automatically, which is what you're wanting to do.
Do you get that and are you able to do
anything about it? Or is he just saying something political?
To get himself out of trouble.
Speaker 2 (04:32):
So we work really closely with our minister. You know,
we're all really focused on this, and as I say,
the thing in our control is improving rehabilitation performance. We've
been working hard on that. You know, our people are
working hard with our clients, and we've seen some really
encouraging early signs, you know, even in the last six months.
(04:54):
We've made a number of changes over the last eighteen
months that we're starting to see the impact of particular
people getting back to work earlier with those less serious injuries.
Speaker 1 (05:03):
Because here's my problem, having followed this for years, we
used to be a basket case. Then you got it
together and it was off the radar and you're actually
in the black and we're all happy, and then all
of a sudden, bang at seven million dollars and the
seven billion dollars in the hole again.
Speaker 2 (05:21):
Yeah, and as you said at the beginning that that
numbers based on a lot of assumptions. You know, we
also need to remember we've got an investment fund that's
designed to partially offset that, and our investment fund increased
by around four billion dollars last year. And we also,
you know, are in the process of consulting and recommending
(05:42):
on levy increases. So levees have been held flat or
really flat or reducing for the last decade. What costs
have been increasing. And so this is a slow moving ship.
And so you know, we need to make sure that
over the long term we've got the settings right to
balance how much the scheme's costing and how much money
(06:05):
was coming in. We've got coming in.
Speaker 1 (06:07):
We got too many people who are sick. I mean,
I'm just astonished every time I go to the doctor
or hospital ACC people are falling over themselves with illness injuries.
I'm fifty nine years old, Megan, I've never claimed ACC
in my life. Am I some sort of frick?
Speaker 2 (06:22):
Oh? Mike, you're certainly not a freak. You know. Interestingly
though you talk about people falling over. You know, falls
are the most common cause of injuries in New Zealand
around forty percent. And so if we could all stop
falling over.
Speaker 1 (06:41):
If we've learned nothing else out of the interview today, Megan,
stop falling over. Please have a good day, Meghan Main
who's the ACC chief executive. See so one, I'm not
a freak, and you've got to stop calling me that
because Megan says, well, that's one woman's opinion, very important woman.
Speaker 2 (06:59):
I think it's the only person I've ever.
Speaker 1 (07:01):
Done matter if she was on the radio hooed buy
hundreds of thousands of people. I'm not a freak and
you've gotta stop falling over. For more from The Mic
Asking Breakfast, listen live to news talks. It'd be from
six am weekdays, or follow the podcast on iHeartRadio.
Acc back in trouble again. They've got themselves a seven
billion dollar hole, and when they balance the books, it's
us who pays, of course, so libbies are going to
have to go up a CC's chief executive, as Megan Maine,
who is with us good morning, cur to make So
from the black last year to the red this year
to the tune of over seven billion dollars, does that
make you sort of health New Zealand two point zero.
Speaker 2 (00:21):
Look, there's a couple of things going on with that number, Mike.
In terms of the deficit, there's the money we spend
during the year, which is about seven billion, which is
about what we budgeted. But the bigger factor is the
calculation today of the lifetime cost of the injuries that
have already occurred, and that that recalculation is the is
(00:42):
the big driver of that seven point two billion dollar deficit.
That lifetime calculation went up by eight point seven billion during.
Speaker 1 (00:51):
The year, Right, is that it gets.
Speaker 2 (00:56):
It's a it's a mathematical estimate by actuaries who use
a lot of assumptions. They use economic assumptions, population assumptions,
inflation assumptions, so it's a best estimate and the three
aspects to it. Really, one is the expected cost increase.
The scheme is still growing. Even at fifty years. We
(01:16):
still get more claims coming in than exit each year,
so that's a big part of the increase. The unexpected
aspect this year was a couple of court decisions which
landed in December.
Speaker 1 (01:29):
Just sorry, hard, let me ask you about those. Are
those parts my understanding of those court cases as you
haven't worked through the implications. Is that true or not.
Speaker 2 (01:38):
We're working hard to work through what those decisions mean.
We have started applying it though, from the date of
the court decisions, so we've got interim guidance that our
experts staff are using with current and new clients who
are victims of sexual assault. But it will take a
while to work through the full cations and how we
(02:01):
operationalize that.
Speaker 1 (02:02):
So you've been lumped with that. This is the stuff
I feel sorry for you. I mean, not that they
shouldn't rule the way they did. I'm just saying that
suddenly you wake up one morning, there's a court case
and there's a whole bunch of clients that you didn't
know you were getting.
Speaker 2 (02:13):
Yeah, well, and you know, Mike, this is a really
complex area of the law on acc boundary issues. You know,
this is about people who were sexually abused as children,
so we need to step through this really carefully with them.
And so that's what we're doing, and that you know,
that's what our teams are doing.
Speaker 1 (02:33):
How much did I do?
Speaker 2 (02:36):
But there's a third aspect of the increase, and that's
rehabilitation performance, and that's the thing we're really focused on.
That's the thing most in our control, you know, making
sure our case management is working for people. And frankly,
you know, the best thing we can do for our
clients the New Zealand productivity and for the scheme long
(02:58):
term is help people get better faster and also importantly
you know, remember that we want people to avoid getting
injured in the.
Speaker 1 (03:06):
First l correct. I'll come to that in a moment
if we get time. But this whole remember, I mean
you may not have been here at the time, but
remember years ago, the physiotherapists were ripping off the system left,
right and center, and you went along for twenty seven
hundred sessions when you only needed three. Is there still
a bit of that in the system.
Speaker 2 (03:22):
Look, it's an entitlement scheme, you know, and we need
to make sure that we're giving people the support they need.
Speaker 1 (03:29):
You have how much support as I'm paying for it?
I mean, do you need to rut me down for
the rest of my life or do we need to
get back to work?
Speaker 2 (03:35):
Yeah? Yeah, Look, we're very mindful of fraud, of over payments,
of over servicing, and we also work really closely with
IRD to make sure that the people are getting the
payments they're entitled to. But you know, your example is
a good example of making sure that from a case
management point of view, we're working closely with clients, particularly
(03:56):
clients receiving weekly compensation they're off work. You know, we
know there's so much evidence that being off work is
not good for you, it's not good for your well being,
and so we really want to make sure we're giving
people what they need, not giving them more than they need.
We don't want to get people dependent on the scheme.
Speaker 1 (04:15):
When Doocey comes to you as minister and go seven
point two, I get it, but just don't go around
charging people automatically, which is what you're wanting to do.
Do you get that and are you able to do
anything about it? Or is he just saying something political?
To get himself out of trouble.
Speaker 2 (04:32):
So we work really closely with our minister. You know,
we're all really focused on this, and as I say,
the thing in our control is improving rehabilitation performance. We've
been working hard on that. You know, our people are
working hard with our clients, and we've seen some really
encouraging early signs, you know, even in the last six months.
(04:54):
We've made a number of changes over the last eighteen
months that we're starting to see the impact of particular
people getting back to work earlier with those less serious injuries.
Speaker 1 (05:03):
Because here's my problem, having followed this for years, we
used to be a basket case. Then you got it
together and it was off the radar and you're actually
in the black and we're all happy, and then all
of a sudden, bang at seven million dollars and the
seven billion dollars in the hole again.
Speaker 2 (05:21):
Yeah, and as you said at the beginning that that
numbers based on a lot of assumptions. You know, we
also need to remember we've got an investment fund that's
designed to partially offset that, and our investment fund increased
by around four billion dollars last year. And we also,
you know, are in the process of consulting and recommending
(05:42):
on levy increases. So levees have been held flat or
really flat or reducing for the last decade. What costs
have been increasing. And so this is a slow moving ship.
And so you know, we need to make sure that
over the long term we've got the settings right to
balance how much the scheme's costing and how much money
(06:05):
was coming in. We've got coming in.
Speaker 1 (06:07):
We got too many people who are sick. I mean,
I'm just astonished every time I go to the doctor
or hospital ACC people are falling over themselves with illness injuries.
I'm fifty nine years old, Megan, I've never claimed ACC
in my life. Am I some sort of frick?
Speaker 2 (06:22):
Oh? Mike, you're certainly not a freak. You know. Interestingly
though you talk about people falling over. You know, falls
are the most common cause of injuries in New Zealand
around forty percent. And so if we could all stop
falling over.
Speaker 1 (06:41):
If we've learned nothing else out of the interview today, Megan,
stop falling over. Please have a good day, Meghan Main
who's the ACC chief executive. See so one, I'm not
a freak, and you've got to stop calling me that
because Megan says, well, that's one woman's opinion, very important woman.
Speaker 2 (06:59):
I think it's the only person I've ever.
Speaker 1 (07:01):
Done matter if she was on the radio hooed buy
hundreds of thousands of people. I'm not a freak and
you've gotta stop falling over. For more from The Mic
Asking Breakfast, listen live to news talks. It'd be from
six am weekdays, or follow the podcast on iHeartRadio.
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