In the February 2009 issue of Kiwi Rider, columnist Mike Nash raised a number of questions and frustrations about the ACC levies motorcyclists pay [An Open Letter to ACC, February 2009] and the fact they pay more than other vehicle owners to licence their bikes.

As ACC’s manager of our Public Safety Injury Prevention Programmes, which takes in road safety, I would like to respond to Mr Nash and explain why that is.

I understand that some riders feel they’re being penalised for riding on two wheels, not four, especially when they are often not responsible for causing the crash they are injured in. Many ask why doesn’t ACC target those who cause the crashes – the other car, van, truck, SUV – instead?

Like any insurance, the reason riders pay more is to do with risk and cost. Motorcycle riders are 16 times more likely than any other road user to be involved in a road crash. And they are far more likely to be more seriously injured in that crash.

Riders pay more in their licence fees because motorcycle injuries are disproportionately high and costly. While motorcycles are only three per cent of New Zealand’s vehicle fleet, motorcycle injuries make up 21 per cent of road crash injury claims to ACC.

Riders don’t pay the full cost of their injury care. Last year, we paid more than $62 million to care for people injured while on their motorcycles, while we collected only $12.3 million in motorcycle levies.

WHAT YOUR LEVIES COVER

Of the total fee most motorcyclists pay to register their cycles, $204 is an ACC levy, compared to $136.44 for a petroldriven car. We collect that money, along with another 9.34 cents on every litre of petrol bought, and use it to fund medical and support services for people who are injured in a crash on a public road.
If you are injured, ACC can pay for:

• the ambulance that takes you to hospital
  
• the medical and surgical care you need
  
• rehabilitation services – for example, physiotherapy and help to learn to live with an on-going injury such as paraplegia
  
• modifications to your house and car if necessary, so you can live independently
  
• equipment or aids, including wheelchairs or hoists
  
• vocational rehabilitation – help training for another job if you can’t go back to your old job when you’re fit to work again
  
• income replacement compensation for as long as you can’t work, which could be the rest of your life.

HOW LEVIES ARE WORKED OUT

Like any insurance company, each year we estimate how much our injury claims are going to cost and so how much we need to collect to meet that cost. For road injuries we then work out the average amount we need to collect from each licensed vehicle to cover that cost.

For the 2008/09 year that’s $254.63 per vehicle, which is spread across the licence fee and the levy we collect from petrol.

Treating road crash injuries is funded from our Motor Vehicle Account, which is where all the licence fee and petrol levies are put. No money from your motorcycle levies is ever used to pay for any other type of injury, such as a rugby injury.

Speaking of rugby, Mr Nash wrote that rugby players too are frequently seriously injured. But rugby injuries with life-long effects are now extremely rare – since 2003 there have been fewer than three such rugby injuries each year.

WHAT INJURIES COST AND WHO PAYS

Between July 2007 and June 2008, about 1300 people who went out for a ride were moderately or seriously injured. Another 40 were killed. In total, last year ACC worked with more than 3170 riders who were either injured in that year, or still needing our support for injuries suffered in previous years.

Putting this all into dollars, the cost of caring for those New Zealanders was $62.6 million. However, that year we collected only $12.3 million in ACC levies from motorcycle and moped owners. The shortfall of $50.3 million was covered by levies paid by other road users. That could be seen as fair dues, perhaps, because as Mr Nash pointed out, often the crash wasn’t caused by the rider.

WHY DON’T THE VEHICLES THAT CAUSE THE CRASHES PAY HIGHER LEVIES?

ACC is a no fault scheme, which why we don’t levy one group of people or vehicles more highly because they appear to cause more crashes. For us it’s all about the risk of injury. We can only look at who’s injured in those crashes and how much those injuries cost. Unfortunately motorcyclists ride high in both.

I know riders feel that ACC is penalising them for riding a motorbike, but that’s not our intention at all. Thousands of New Zealanders love riding and we very much want them to continue enjoying their passion, and the freedom that comes from being on a motorcycle.

We are very open to discussion with riders, and all levy payers. Along with supporting New Zealanders when they are injured, we also work hard to prevent injuries from happening in the first place. That’s why we work closely with motorcycle groups and support several injury prevention programmes, including those created for riders.

We do welcome your feedback on the work we do, including what levies we set. Every year there is a consultation process around levy setting and we welcome your feedback during that process.

KR

EricBannanna

>>Every year there is a consultation process around levy setting and we welcome your feedback during that process.<<

My question is 'how is the best way to provide that feedback?'

(Post it here and we'll pass it on - or there is a feedback form on the acc siteHere BD)

Jacko Sparks

It looks like bikers are improving - looking at the tables given it would appear that the average cost per claim has gone DOWN over the years from 58,000 to 46,000 - so does that mean our levy should also GO DOWN?

Ntst8

The graphs must have been done by the PR people, by having the baseline well above zero the increases are made to look much more dramatic. Also no reference is made to any increase in rider numbers/total mileage over that time frame - has the increase in injury claims been faster than the increase in riders/miles ridden?

by email

The response by ACC's Public Safety Spinmeister, Ray Campbell, to Mike Nash's February article, omits one very important fact. Just what would be the cost if the levy was averaged over all motorists instead of singling out motorcyclists? After all, most motorcyclists also own a car, and ACC is double dipping on those people. One can only drive/ride one vehicle at a time.

Also, taking Campbells argument and applying it to truck drivers, who rarely suffer any injury in vehicle to vehicle accidents, would seem to justify a lower levy on them. ACC sees fit to single out only one group. Hardly a fair go, but no doubt the approach which best serves their interests.

Tony

Comment:
One of the many flaws in the spin presented here is saying that ACC is insurance, and that you pay for the risk of getting hurt. ACC was set up so that we didn't have to sue those at fault to get treatment. If we were able to sue, those at fault would pay - it is illogical and unfair for ACC to charge (one group of) victims more instead.

I'd also note that the "16x more likely" is a flawed figure has been challenged by those doing the math on the LTNZ accident stats (3x being more accurate).

This spin also doesn't note that cyclists and pedestrians injured on the road are paid for out of the motor vehicle account, without direct contribution. I don't have a problem with them being covered (though perhaps another fund might be better), but the hypocrisy of targeting one group of road users to pay higher levies is extreme.

Again it is hypocritical to say "ACC is a no fault scheme, which why we don’t levy one group of people or vehicles more highly because they appear to cause more crashes." - but they do levy one group of people or vehicles more highly because if they do get hit they may be hurt more? So you are not at fault if careless or dangerous but you are "at fault" if vulnerable...? And watch out kiddies, you might have to pay a helluva lot for riding your tricycle!

Put the efforts in training into not just helping motorcyclists ride better, but also into educating other road users and pushing for better road conditions. Some suggestions:
Change licensing so people can get a moped/motorcycle licence with training from 15/16 years old, but can't get a car licence until 18yo. Learning both the skills and challenges in riding on 2 wheels can help people be better drivers (I would also love to see all of ACC, road builders, LTNZ and our legislators riding motorcycles for a couple of years - you may find you enjoy the sense of comradarie and community benefit and the ridings).
Show people who drive cars/SUVs the consequences of not actually stopping or slowing down enough to look properly when approaching intersections, changing lanes or pulling out of driveways.
Raise standards for vehicle design to reduce blind spots/areas caused by pillars, mirror position, etc.
Educate people on the risks of cutting blind corners.
Have an attitude changing campaign to reduce road rage/aggression.
Push and support councils and LTNZ to ensure road surfaces are well maintained (without dragging grooves, unmarked gravel, etc)
Also:
Change the legislation so that all private motor vehicles have the same levy classification, with no loadings on particular groups
Require ACC to invest a minimum of five percent of operating income in injury prevention activity
Any limits to treatment should be based on limiting the number of treatments, judged on effective rehabilitation for type and severity of injury, not removal of access to effective treatments.
Return to the original “pay as you go” funding of claims, to improve intergenerational equity, with a limit to the reserves held of within +/-10 percent of three times the annual claims payouts.