Putting it in perspective

ACC - motorcycling as a social activity. Levelling the playing field with cyclists.

, posted: 29-Oct-2009 23:20

Its unfair to single out cyclists but as motorcyclists are in the ACC's crosshairs I suppose anyone is fair game.  However some information about cycling injuries forms a good basis for analysis.

At the heart of the matter is the cost of injuries for motorcyclists and the requirement for the ACC to fully fund their costs.  According to the ACC the cost to society is $319m (source: 2010/11 Consultation document) although this includes the pre-1999 claim which constitutes ~50% of the overall levy ($213 of the $417 per vehicle levy). So the actual post-1999 annual cost to society is $160m.

An interesting number given the estimated cost to society for cycling accidents is $172m (source: Ministry of Transport cycle factsheet).  Rather than share this cost across the estimated 1.3m cyclists (which would be $132 per annum and which is not considerably more than the post-1999 levy for passenger vehicles) this is funded from the Earners Account or by the 2,054,000 income earners. 

To me this says I pay $83 per annum for the privilege of cyclists to enjoy their pastime on and off New Zealand roads.  But the cyclist that you see whizzing past you on the way to work tomorrow (and using the road rather than the cycleway in the weekend) doesn’t contribute 1 red cent to my pastime of motorcycling at the weekend to enjoy an orange juice or latte at some idyllic location. 


So what is an equitable solution? 

As the ACC is a no-liability scheme I think that all motorcyclists, nay all road users whether they be passenger or goods service vehicles, should pay a flat fee.  There are two possible solutions:  share all costs across all vehicles which lifts the ACC levy to $417 per annum OR apportion some of the motorcycle levy to the Earners Account to reflect the sport/recreation element of motorcycling (similar to cyclists). 

If one were to charge motorcyclists an amount equal to the proposed passenger vehicle of $313 per annum then this leads to, by the ACC calculations, a deficit of $280m to the motor vehicle account. This is roughly $137 per earner per annum (less than $3 per week) or 0.3 cents per $100 earned.


Other related posts:
A call to arms: Civil Disobedience
The ACC levy rort - targetting motorcyclists

Comment by caldazar, on 30-Oct-2009 00:04

Do you really think that cyclists don't contribute '1 red cent'? Most cyclists own cars just like everyone else. I really think the costs should be shared across all road users. While motorcyclists, cyclists or whatever the type of "users" all have different risks/costs associated to them by ACC, it is not fair to single one group out. An example: If a motorcyclist is hit by a car and is severely injured, yet the car driver is 100% fine. Who does ACC currently identify as the higher risk? The motorcyclist. Now... what if the car driver was 100% in the wrong? Does ACC allocate the cost of injury to the car driver who caused the accident? No. This in my mind inflates the "costs" allocated to motorcyclists and other road users like cyclists. My 2 cents anyway.

Comment by Buttonmash, on 30-Oct-2009 07:07

Most Motorcyclists (all the considerable number I know) own cars as well.
While bikes are fantastic for the odd drive, commute etc.  It's a bit hard to pick up your weekly shopping on one.  :)

Comment by hellonearthisman, on 30-Oct-2009 07:50

Riding Motorcycles is dangerous.  It's more dangerous that riding in a car or riding on a push bike.  Motorcycles go fast and give no protection to the driver.
Motorcycles travel more KM that push bikes.

Don't look at who's fault each accident is, the hospitals dealing with the carnage don't,  they have to be prepared for the accident, not maybe, after courts and stuff, get some money for their costs.

Motorbike accidents just cost more.  You want your motorbike, you pay your acc cover, simple.

Comment by hellonearthisman, on 30-Oct-2009 07:54

Maybe there need to be a second level of income for the ACC, where they can associate blame to an accident and put on extra fines.

But if you take a corner in the wet as slip and need ACC and then it's your fault, you will get an extra ACC fine.

Author's note by ockel, on 30-Oct-2009 08:03

An interesting comment stating that motorbike accidents just cost more.

From the ACC's Injury Statistics 2008 the cost of claims for motorcycles is lower than all other groups (from the motor vehicle account).  And bear in mind that these are the ACC's own numbers:

- 567 active claims
- $12,573,000
- $22,174 per claim

- 1115 active claims
- $24,494,000
- $21,967 per claim

Car Occupants:
- 8525 active claims
- $208,305,000
- $24,434 per claim

- 3173 active claims
- $62,523,000
- $19,704 per claim

So do they really cost more?  No.  There are more per active motorcyclist so the total is more. 

I'm a strong advocate to moving towards a liability based compensation system.  But singling out one group over all others but not giving the right to some recourse is an inequitable system.

Give me the right to sue the driver who causes my injuries. 

Comment by Buttonmash, on 30-Oct-2009 09:00


Not all motorcycles go faster than a pushbike.  They're looking at putting a 50cc scooters levy up to $250.  These go pretty much exactly the same speed as a bicycle but many of the riders have significantly more safetly gear.  Full face helmet, cordura jacket and pants, leather gloves...

A cyclist more often than not has a helmet, and some lycra.

Comment by Dratsab, on 31-Oct-2009 13:42

@ockel - you already have the right to sue if someone else can be shown to be at fault.  You have to waive your rights to receiving anything from ACC though.

As Caldazar has already said, cyclists own cars.  Most of them work too, just as most motorcyclists do.  A number of motorcyclists also own cars which means a triple whammy for some.

In essence you seem to be saying cyclists should be triple whammied as well just because you think that would be fair.  The logical extension of your argument would be to put a levy on pedestrians too - they get hit by cars and buses on a regular basis.

Author's note by ockel, on 1-Nov-2009 08:37


The logical extension is exactly the point.  It is inequitable to target one group of road users without extending to all.

And then where should it stop?  Why should couch potatoes who work pay for sports injuries?  Because that will be the next logical extension to the "no-liability" scheme.  The at-risk groups will have to collectively fund their own cost of treatment and rehabiliation.

I understand that cyclists own cars and that cyclists work,  What hasnt been made clear in any reponse is why one group should take the triple whammy on the chin and no-one else should.  That is the essence of the motorcyclists anger at the proposal.

It would be more equitable to have a flat rate for all motor vehicles regardless of size, use or any other category. 

Comment by Liam Venter, on 5-Nov-2009 16:10

ACC calls for submissions on cyclist levy proposal ACC has today released further proposals for increases to ACC levies as part of its annual levy setting process. Earlier proposals included a proposal to increase motorcycle levies. A levy is now under consideration for cyclists. ACC chairman John Judge said the need to introduce levies for cyclists was driven by many factors. In line with movements towards a user pays system for ACC with motorcyclists it makes sense to also introduce levies for other road users such as cyclists. ‘It seem unfair that other road users should be subsidising the cost of ACC for cyclists'. In 2008 there were 1,475 motorcycle accidents and 50 deaths costing 62,545 million dollars in entitlement claims. In 2008 there were 1,170 bicycle accidents and 36 deaths costing 15,543 million dollars in entitlement claims. Cyclists paid no ACC levies. An increase in the number of claims received annually, rising health costs and Scheme extensions have been major contributors to the need to explore means to increase levies to cover the current costs of the Scheme,' he said. Private health insurer Southern Cross also cited rising claim numbers and healthcare costs increasing well above the rate of inflation as key drivers for their deficit reported earlier. ‘We are also taking a more realistic approach to estimating future costs and liability. Other factors such as the global recession have had a compounding effect,' Mr Judge said. Mr Judge noted ACC is required to develop its levy proposals under existing legislative provisions. However, the Minister for ACC is introducing amendments to the ACC legislation that will have an impact on the final levy rates set for 2010/11 – in particular extending the date by which the Scheme must be fully funded. These legislation change requirements mean that the cyclists levies are likely to be introduced six months after the increased levies for motorcyclists. ‘The ACC Board appreciates there's a limit to how much New Zealanders should be expected to pay in ACC levies, and that many will view the prospect of levy increases at this time with dismay.' We wish to stress that levy increases are not seen as the only answer to the challenges confronting the ACC Scheme – the focus must be on other ways to make the Scheme more sustainable and affordable in the long run.' Proposed cycle levy details Within the motor vehicle levy changes the ACC is proposing an introduction of cycle levies to take into account the fact that for several years other motorists have been subsidising cyclists. As no national registrar of bicycles is currently maintained an exact figure for the number of cyclists using N.Z. roads is not available. Our calculations have been based on an active national cycling fleet of 92,000 cycles. Using this figure as a base for calculation the new levies reflect the fact that cycle riders are an estimated 14 times more likely to be involved in a road crash than car drivers and are far more likely to be seriously injured. ‘The proposed legislative change to extend the full funding date to 2019 would reduce the effect of residual claims on motor vehicle levies by $100,' said Mr Judge. ‘However, whether or not this translates into an equivalent reduction in those levies will depend on how best to fund the account fully over the next 10 years. This is something the Board must determine.' The following are the key elements of the proposed Cyclist levy. 1. While the cover for motorists and will be paid by motorists through licensing fees & petrol levy the cover for cyclists will be recovered solely from bicycle registrations. 2. While it was initially proposed that all cyclists of legal driving age (15 years and over) would be required to pay an ACC levy it seems unfair that parents would have to pay an ACC levy for school children. Cyclists who are attending primary, intermediate or secondary school will not be required to register their bicycles. Students attending tertiary education would be required to register their bikes. It is noted that many of these students already qualify for student loans which may be used to meet registration costs. 3. As with other road users cyclists will be required to register their vehicles with the national vehicle registration data base. This will be performed at any vehicle testing station. A registration number will be fixed to each cycle using a numbered tamper proof seal similar to that used on home power usage meters and several bike parks in New Zealand. 4. Registration of cycles also offers benefits for law enforcement and rider identification in the case of fatal accidents. 5. In line with other road users cyclists will be required to register each cycle they intend to use on road separately. Cycles that will be used exclusively for off road use will not require registration. 6. The amount of the ACC levy has not been finalised as yet, but will need to take into account that while cyclists are in the same risk group as motorbike riders they make no contribution to ACC levies through petrol purchasers. Even with the significant proposed increases in the rates payable by cyclists, car drivers will still continue to subsidise cycle drivers by $78 a year for the 2010/2011 year. An ACC levy of $300 to $500 dollars would be realistic. 7. Preventing further deterioration ‘Along with other changes, levy increases are needed to help avoid further deterioration in our financial position,' Mr Judge said. ‘The proposed increases only deal with the current shortfall in funding and largely go towards paying the ongoing costs of existing claims – not future cost increases or increases in demand for services'. ‘Government is proposing legislative changes which, if passed, will reduce the size of levy increases. When the Amendment is passed, the Board will reconsider its funding requirements and levy recommendations to the Minister. Despite this, the proposed rates we are releasing today show how bad the situation has really become,' Mr Judge said. Consultation Mr Judge said the ACC Board's final view on levy increases will be informed by consultation and it will then make appropriate recommendations for Government to consider and to make a final decision. Further information, including consultation documents and actuarial reports relating to setting levy rates and the estimated outstanding claims liability, is available from http://www.acc.co.nz/consultation. Alternatively, call 0800 ACC RATES (0800222 728) or send an email with your request to consultation@acc.co.nz. Making a submission ACC is encouraging New Zealanders and affected organisations to have their say. Submissions should be addressed to: By post: ACC P.O. Box 242 Wellington 6140 By fax: (04) 918 4395 By email: Consultation@acc.co.nz Submissions must include: Your name Your Address Your contact phone number(s) Deadline for submissions 5pm, 1 April 2010 Media enquiries can be made to: Liam Venter Manager ACC alternative media relations Department of Satire Contact: 0275 985 266

Comment by Liam Venter, on 5-Nov-2009 16:41

Please note the above is satire. the above was paraphrased from the ACC call for submissions on ACC levies for motorcycles adn demonstrates that the ACC can apply EXACTLY the same logic and cost arguments to cycling Levies. The costs in the above spoof were taken from the original submission request from the ACC and from their onlline statistics. ONe recent study in Wellington actually showed that cyclists were 30 times more likely to be involved in car accidents than drivers and nearly twice as likely as motorcyclists. ACC figures show the cost per cycle claim is actually higher than that for motorcyclists. The Motorcycle levies are the thin edge of the wedge. Cyclists are next!

Comment by Liam Venter, on 9-Nov-2009 09:27

For those whos still have any doubt that ACC is moving towards a standard insurance company risk/premium model... In this Fridays Computerworld there was an article titled "ACC shift gear with major IT investment" Nov 9th 2009. It has some interesting quotes fro ACC and if you are in any doubt that the ACC is becoming an insurance company you should read it. As an insurance company it is likely that it will charge premiums (levies) commensurate with the risk. This could mean that not only road cyclists but also moutain bikers could be paying insurance premiums to the ACC. The following is a copy of the article. "ACC shift gear with major IT investment" Facing the prospect of private sector competition the Accident Compensation Corporation is gearing up its technology to deliver more flexible services and to work in a "more businesslike manner The corporation is planning to invest in what it calls an "integrated insurance solution" in what some sources say will require a multi-million dollar transformation project. "ACC is seeking technology solution to replace legacy systems that are no longer fit for purpose and which have had minimal investment for at least eight years," the ACC 's Diane Bradley, who is responsible for the project told Computerworld. The system will also allow ACC to meet the requirements of the Bill currently before parliament, to provide experience rating – no claim bonuses – and other risk sharing among other functions, she says. Bradley says it will also allow ACC to connect some of its existing but isolated technology solutions. "Fore the systems that handles claims is separate from the system that calculates levies. the new offering will allow us to bridge that gap," she says. The system will also enable a higher level of levy payer self-service and deliver greater efficiencies, better data and better customer service, she says. A tender document released last week fleshes that out and also reveals significant back-end architecture changes to support the new systsem. The documents says ACC seeks technology that supports standard insurance policy administration, customer relationship management, product management and new management functions. The requiremet includes modules for sales management and quoting., and underwriting. The project is to be introduced in phases over three years. Currently, core systems are provided by Sun, Oracle,and IBM. Microsoft provides the office software. Over the past few years,ACC has been implementing and upgrading a claims management system from Irish company Fineos. The new software will have to integrate with EOS, the Fineos claims system. The RFP says that ACC is seeking to reduce the numbers of servers by 70 percent through virtualisation and consolidation. It notes that the application server for its integrated premium system is unsupported and that the database is due to be unsupported next month. Also, the Java code has been superseded. "Significant investment will be required" ACC says. Several other major functions are said to be out of scope. Insurance industry sources say private insurers have dusted off their competitive proposals from the late 1990s when the market was briefly opened up to competition. ACC posted a loss of $4.8 billion in its most recent financial year. The government subsequently introduced a Bill to raise levies and cut some entitlements amidst a debate about whether ACC was and insurance company at all and whether it should have a to fully fund its future liabilities

Comment by Liam Venter, on 23-Nov-2009 10:11

You can now use the new ACC Insurance Personal Injury Premium calculator to calculate your proposed pemium as a cyclist. The ACC Premium calculator can be found here http://www.salesfish.co.nz/www-ACC-Insurance-co-nz/ACC_Premium_Calculator.pdf

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