My hassles with ACC

(Published in the Nelson Mail and Manawatu Standard, January 7.)

For the past six years I have made my living as a freelance journalist. For reasons that escape me, the ACC seems to have had great difficulty getting its head around this simple fact.

There must be hundreds of others like me – self-employed journalists working from home – yet the state workplace insurer is apparently incapable of finding an appropriate classification for us. It apparently hasn’t occurred to ACC to classify us as freelance journalists. Too simple, perhaps.

During my first few years in self-employment ACC gave me the puzzling classification “Other periodical publishing (excluding printing)”. This didn’t describe what I did – I’m a journalist, not a publisher – but it was evidently the closest the ACC could get.

The ACC seemed to recognise something was wrong with its system because twice its representatives contacted me about my classification and we had long conversations in which I carefully explained what I do.

Eventually it reclassified me under “creative arts”. So I am now a creative writer, which to me suggests a writer of fiction (no sarcastic jokes please). This is only marginally less misleading than the previous description.

ACC apparently spent so much time wrestling with this classification issue that my ACC invoice for the 2007-2008 year didn’t arrive until October 2008. I duly paid it, only to get another invoice – for the 2008-2009 year – less than one month later.

When I queried the fact that I had to pay two annual levies within one month, totalling nearly $3200 (and just before Christmas, when many people’s finances are under pressure), it was explained that the 2007-08 invoice was delayed because ACC didn’t have an accurate description of my business activities.

Well, hello? I’ve been doing exactly the same work for six years and have been on their files all that time. Twice I have explained to ACC staff what I do, but still they dither about how to classify me. And now I’ve been penalised for the failings of the ACC’s pathetic classification system by having to pay two hefty invoices within one month.

But that’s only half of it. Go back a couple of paragraphs.

That figure, $3200, is not a misprint. My ACC levy for 2007-2008 was $1451. For 2008-2009 it was $1737.

Now let me explain something. Freelance journalism is not a hazardous occupation. I don’t work with explosives or dangerous animals. I don’t spend weeks dodging ice floes in the Southern Ocean on a deepwater fishing trawler, I don’t shimmy up trees carrying a chainsaw and I don’t go down into a mine where there are noxious gases and rockfalls.

My office is in my house. I walk to work each day – it’s about 10 metres – and I don’t get strafed by hostile aircraft on the way. The worst that could happen to me is that I might get showered with broken glass hurling my computer out the window, as I am frequently tempted to do.

In six years, I haven’t experienced anything remotely resembling a workplace accident. Yet my ACC bill for the current year is $1737. I can only conclude I’m subsidising burglars who break their legs falling from drainpipes and drug dealers who suffer third-degree burns when their P labs blow up, none of whom pay any ACC levy at all.

In the past three years my levy has risen by 90 percent. When I queried this, the ACC replied that my levy was based on my increased earnings. Now, setting aside arguments about the fairness of having to pay more just because you earn more (after all, I would be no more likely to have a workplace accident earning $500,000 a year than I would earning $50,000), we’re still left with a problem – namely, that my levy increased by 90 percent during a period when my income increased by 42 percent.

I paid this outrageous bill because when push came to shove, I had little option. I am dealing with a big, brutal, armour-plated monopoly. And here’s the most fundamental objection of all.

I can’t say to ACC: “Bugger you, I’m taking my business elsewhere”. Like everyone else, I am forced to deal with an organisation that is not transparent, is not accountable to its hapless customers and has no competition.

That last factor is the most important of all. In a market economy, your ultimate protection against inept service or unreasonable fees is to withdraw your custom. But with ACC, that choice is denied us. The state compels us to do business with it whether we want to or not.

That monopoly status not only traps us, the customers, but also removes the most important incentive for an organisation to improve its performance. Where is the pressure to function more efficiently when the ACC knows its business is guaranteed by compulsion? Why should it treat its customers as precious when it knows the state forbids anyone else from offering them a better deal?

For a few years under National in the 1990s, accident compensation was opened to competition. I wasn’t self-employed then so can’t say how much better, if at all, the private sector catered for people like me. But as a general rule, competition forces businesses to sharpen their act. It can hardly do otherwise.

Labour reinstated the ACC monopoly because it’s an article of faith in Labour’s ideology, despite all evidence to the contrary, that governments do things more fairly and efficiently. I would like to report that National, supposedly the party of free enterprise, is firmly committed to de-regulating the sector again so that people like me have a choice. But no; National’s pre-election ACC policy merely said the party supported the “principle” of competition and choice.

John Key said competition in the 1990s had been healthy for ACC and had resulted in substantially lower levies (oh really?), but he couldn’t bring himself to promise that competition would be reinstated.

Since then it’s emerged that ACC levies will have to increase substantially this year to cover a previously undisclosed deficit of several billion dollars, which seems to confirm that this state monopoly, like most others, has been ineptly managed.

I would have thought this greatly strengthened the case for workplace insurance to be re-opened to competition, but I’m not exactly holding my breath.