SOEs , Privatisation & Asset sales.
The attack on the Fire Service

E d u c a t i o n   o n   t h e   a g e n d a   o f   t h e   N e w   R i g h t   i n   N e w   Z e a l a n d.


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SOEs , Privatisation & Asset sales. The attack on the Fire Service.

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Some of our reasons for opposing the privatisation of ACC:
"        It is our scheme funded by levies paid by New Zealanders. Privatising it will hand our money over to Australian owned insurance companies. Merrill Lynch in Australia last year predicted a $200 million killing for insurers if ACC was privatised;
"        ACC is administratively more efficient than a system managed by private sector providers.  In 2008 ACC was found to have lower claims management expenses (8%) than all Australian schemes (9%-32%) and lower total administration expenses (24% of total expenditure) than the schemes providing comparable benefits (NSW 28%, Victoria 31%). The scheme was established as a public-owned provider precisely to avoid the unnecessary costs of duplicating systems and providing a profit to insurance company shareholders;
"        Levies will inevitably increase over time to meet these costs. When the work account was privatised in the late 1990s private insurers were prepared to accept losses initially as they competed for market share. These initial losses would have to be made up at a later date;
"        Employer levies (as a % of payroll) are more than twice as high in Australia, Canada, and the USA where the private sector has a greater role in provider services than under ACC in NZ. Similarly, comparable motor vehicle no-fault schemes (such as Victoria in Australia) have substantially higher motor vehicle levies.
"        When the work account was privatised last time unions and treatment providers reported that some employers were placing pressure on workers not to lodge claims for workplace injuries;
"        When the work account was privatised last time treatment providers reported that private insurers were reluctant to approve claims and were often late in honouring invoices;
"        When the work account was privatised last time workers were unsure about their entitlements and who their employer's insurer was;
"        ACC is not an insurance company and the profit motive has no place in its operations. In the words of the founder of the scheme, Sir Owen Woodhouse, the scheme always had a "social welfare purpose and intent".

Overall we will end up paying more and getting less and the only beneficiaries will be the Australian insurers.

Levies, cover, entitlements and ACC's financial 'crisis'
Since the election the Government has sought to promote the idea that the ACC was in a financial crisis so severe that the only remedy was radical surgery. The Minister even used the word "insolvent" to describe the financial state of the scheme. The previous Board Chairperson, Ross Wilson and several other Board members were fired as a consequence and a bill has been introduced to Parliament that would enable cuts to coverage and entitlements and large levy increases. The truth is somewhat different.

ACC has revenue of over $4 billion a year and expenditure of around $3 billion a year. It also has reserves of more than $10 billion - it is far from insolvent. It is true that ACC has been facing increased costs as claims are increasing at a rate greater than population growth and the cost of claims is increasing at a rate higher than inflation. The impact of the recession on investments and the change in accounting standards have also impacted on the Corporation, but the real driver for increases in levies is the commitment of the Government to fully fund ACC by building in the future costs of injuries today into today's levies.

Professor Tim Hazledine has exposed the problems with this approach in this article in the NZ Herald. In it he likens full-funding of ACC to paying for all of your child's education through to their graduation from university on the day they start school aged 5. Suffice to say that it is not an approach we take with any other government services so why would we do it with ACC? The answer is probably that it will make the privatisation of the work (and other) accounts easier to undertake as it is the same approach that private insurers are required to use when establishing their premiums and managing their funds.

The ACC Futures Coalition is questioning this ongoing commitment which is placing significant pressure on levies, cover and entitlements and which, together with privatisation, threatens to undermine ACC as we know it.


Coalition Activities
The ACC Futures Coalition is preparing submissions to the Stocktake of ACC, the levy setting process and the select committee considering the Injury Prevention, Rehabilitation, and Compensation Amendment Bill (which will enable the cuts and support the levy increases). We are also preparing a postcard campaign to MPs. There will be other activities underway in the coming months.

Who and What is the ACC Futures Coalition
The ACC Futures Coalition formed following a seminar held in September 2008 on the future of ACC in light of the policies the political parties were taking into the election. Our aim is to keep the current model of ACC as a single, publicly owned provider and to seek to maintain and improve the scheme.  We currently consist of a number of participating organisations representing treatment providers, academics, consumers and recreation providers, plus unions.  In April 2009 we held a successful launch in Wellington. Information about us can be found on our website www.accfutures.org.nz

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WHY SELL KIWIBANK ?
This has to be the Question of the year.
A bank is started to ensure the overseas banks have some real competition. It is there to ensure the profits are not taken offshore in the overseas shareholders pockets.

Is the New Right ideology so great that they cannot stand a government getting involved in something for the benefit of all New Zealanders, OR is it that they don't want the competition to stymie their exorbitant profits and to hell with New Zealand bank customers.

National deputy leader Bill English was asked at the party's conference whether National would sell Kiwibank and replied "Well eventually, not now".

 Prime Minister John Key  has pledged not to sell state assets (which include Kiwibank) during his first term.  He has also said he has no ideological problem with asset sales (which include kiwibank) but sees no call for them as a catalyst for economic growth at present.

Pardon? Would you please run that by me again?

Are National saying they would sell a bank owned by New zealanders which was put there to ensure there is competition for the four large Aussie banks and to keep the profits in New Zealand
as a catalyst for economic growth?   For whom?   The same Mont Pelerin associates of the business roundtable who made so much money in our last state asset fire sale?  see this Fact box  and read more about it here


We have seen who gained from the state asset sell offs last time. We must not let it happen again, not this year, or next year or ANY year. Is this a clue that the New Right (Mont Pelerin) puppets are already making plans?

IF YOU, AS A NEW ZEALANDER, WANT TO KEEP YOUR STATE ASSETS OWNED BY NEW ZEALANDERS AND FOR THE BENEFIT OF NEW ZEALANDERS THEN IT IS UP TO YOU TO LET THE GOVERNMENT KNOW THAT, IN NO UNCERTAIN TERMS.

United, ordinary New Zealand citizens can achieve anything and everything.

See the Article on PRICE RISES AND DIRECTORS FEES

Don't expect them to tell you what they intend to do, theIr first objective is to win the treasury benches, then the real agenda will be thrust upon unsuspecting New Zealanders.

We must learn from the past, We must be prepared for another stealth attack by the New Right this time.

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POWER BILLS UP - AND SO ARE DIRECTORS FEE'S The NZ Herald, October 22, 2008*
 
Even as thousands of Contact Energy customers got letters informing them of a 10% price rise, the Australian owned company prepared to double its directors fees pool to $1.5 million.

After a shareholders meeting at which 100% of the speakers denounced the increase it was still passed with  78.96% of the vote.

Clearly showing that the mum and dad investor has no chance of winning against the  huge corporations who are only interested in profits paid for by increasingly milking the public and filling the trough for those at the top to get their snouts into.

However, for once, the public responded in the only way it could, it voted with its feet.

Figures released by the Electricity commission in May 2009 showed Contact had lost 37,676 customers and it was being forecast that it would be 40,000 in total.

WELL DONE fellow kiwis! 
This shows that if we as a nation stand up and speak out and we can be successful.
 

Here is another example how the New Zealand working family is paying the price for the New Right policies.


What most New Zealanders couldn't come to grips with after the 1990 election was that the National government they had elected to do away with Rogernomics' New Right policies just carried on with more of the same.
In some cases, even more extreme, like the insistence that the production and distribution of electricity be privatised.


   Below is what the late Hugh Price, a patriotic New Zealand author, wrote in his short paper "KNOW THE NEW RIGHT" in 1993

   "One of the many bizarre and ludicrous examples of New Right ideology is the insistence that the production and distribution of electricity - for so long efficiently and economically done by a low-key government department - must be corporatised, subject to competition, and privatised. This pointless process started badly when the old Electricity Department closed, and was then not allowed to simply pass its assets to the new corporation Electricorp, but had to sell them to it, thereby obliging Electricorp to borrow heavily and increase the price of Electricity to service its debt (as both the old Department and the new corporation were publicly owned it is hard for a non-NR observer to see what benefit this sale delivered). To bring the magic of competition to the Electricorp monopoly a quite mad NR expedient was then thought of: to sell the actual wires that the electricity passes along - the national grid - to another NR creation called Transpower, which will start life borrowing the money for its strange purchase. As a correspondent to the Dominion (4.2.93) commented: separating the national grid from the generating stations makes as much sense as declaring that competition on the Railways could be created by separating the railway lines from the rolling stock that trundles along them.
    It was proposed, believe it or not, that supply authorities would buy Transpower; by which time the public will have paid three times for the national grid - which they owned in the first place!"

Here is part of a speech by Hon. Max Bradford, Nationals Minister of Energy, 2/10/97
I welcome the opportunity to share with you this morning some thoughts on electricity reforms.
In recent speeches, Ministers with responsibility for energy and state owned assets in the electricity sector have been talking about the next stage of reform in the electricity sector.
That there will be further reform is certain.
The reform will have a number of key objectives.
First, we have to reduce the costs of producing and distributing energy in general, and electricity in particular, to enhance the competitiveness of New Zealand exporters and business.
Secondly, consumers deserve a better break in terms of choice and control over their power bills. Only effective competition will achieve that, and we do not have effective competition as yet.
Thirdly, we have only one more opportunity to get the structures and the incentives right to ensure the legacy of 10 years of reform is a truly competitive electricity market. This round of reform by the Government is it.

Our electricity sector was fully publicly owned until 1992, under this government-owned regime prices for domestic (home) users were kept consistently lower than for commercial users.
In 1987 the government formed a state-owned corporation which was put under the control of some of the most enthusiastic business supporters who urged the government to privatise the corporation.
In 1992 changes were made that caused prices to domestic users to rise drastically while those for commercial users fell.

For a comprehensive description of the privatsation of our electricity assets, check out this website.

 http://canterbury.cyberplace.org.nz/community/CAFCA/publications/Electricity/Privatision.doc
    (MS Word document)

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THE ATTACK ON THE N.Z. FIRE SERVICE - THE REAL REASON

THE  HISTORY  OF  THE  N.Z.  FIRE  SERVICE  REFORMS

Firefighter cuts, are they still on the New Right agenda in 2011 ?

4.5% of home, contents and motor vehicle insurance premiums are collected by the insurance companies on behalf of the New Zealand Government in the form of a levy. Everyone who has such a fire policy is liable for this payment.
Insurance companies then pass the monies collected on to the Fire Service Commission.

LEVIES ARE VITAL for the overall running of the New Zealand Fire Service as this is the only funding available.  The police,hospitals and schools are all funded through general taxation.

The upheaval within the Fire Service began with the changing of legislation in 1992 that meant large businesses could no longer avoid paying the levy.  Previously a loophole in the legislation meant that these corporations could arrange insurance cover overseas that did not carry the levy; leaving smaller businesses and householders paying for the Fire Service.

To continue evading these costs a number of players became involved. The Business Roundtable began a campaign behind the scenes to have the Fire Service privatised - all to avoid paying levies. The National Government, with an anti-unionist ideology, saw the developing situation as a means to deplete the strength of the Professional Firefighters Union.  A third player is a group of large multi-national insurance brokerage firms who wished to have the lions share of the New Zealand commercial insurance market.

This combination had a number of implications for all New Zealanders as together these three factors constituted a direct attack upon  the Fire Service, both in its firefighting capacity and its function as an emergency rescue service.

Roger Estall was appointed as Chairman of the Fire Service Commission (facilitated by Roger Kerr, head of the Business Roundtable) and and as had been pointed out on numerous occasions, particularly by M.P.'s Grant Gillon, Trevor Mallard and Peter Dunne; this was a conflict of interest that is plain for all to see.  Roger Estall was at the time of his appointment in the direct employ of Marsh & McLennan (plus a share-holder in the company). This was "overlooked" by senior cabinet members along with the Prime Minister in this systematic attempt to manipulate the New Zealand Fire Service for political and economic agenda.
 
Commercial interests put forward the proposal to restructure the Fire Service, which culminated in an attempt to dismiss 1600 professional firefighters and have them apply for fewer positions.  Had this been successful, thwarted only by an Employment Court ruling, the union would have been rendered ineffective and the Fire Service impotent due to internal window dressing that was designed to make the aims of big business in avoiding levies very difficult to detect.

Another contentious restructuring plan was to replace crew numbers from four personnel down to three, which was contrary to international standard crewing practices.  This could have placed firefighters and the public in a potentially more dangerous position resulting in loss of life as a worst case scenario.

Additional to this, the National Government of the time proposed that the Fire Service be restricted to "core business" that entailed fighting fires and no other emergency recue work at all.  To this end the trial scheme of co-responding with Wellington ambulance staff (involving on average 120 life threatening situations per month) was scrapped.  This shows that these New Right policies put more value on the dollar than on human life.

In the event of the Fire Service being downgraded to the function of solely attending fire incidents it was suggested that tow truck operators would free victims of motor vehicle accidents and in the event of houses sustaining storm damage, people would have to call a plumber or roofing contractor, which at the height of a storm with many homes involved, is not really practicable.

There has never been a satisfactory explanation as to why within days of Roger Estall's appointment an audit into fire levy avoidance was cancelled.  It has been estimated that around $900 million had been lost been lost between 1992 to 1999 through levy avoidance.  This amount of money would have ensured that New Zealanders would have had a world class Fire/Rescue Service restored to them with no increase in levies.  It appears time and again that the average family ends up paying the price of New Right (Mont Pelerin) policies.

The myth pushed by the Government and the Fire service Commission at the time was that firefighters only spent a portion of their working week actually working is backed by careful manipulation of statistical data to justify the cost cutting measures.  he data used only looked at time spent relating to actual fires, wholly disregardingtime spent dealing with other emergency situations.  Even a cursory inspection of station call out records shows that call outs cover a lot of emergencies including fires, trappedpersons, chemical incidents, gas leaks, motor vehicle accidents, animal focused emergencies and storm damage such as downed trees and power lines, flooding etc.

The most dangerous myth was that a volunteer could easily replace a career firefighter.  Experience shows that volunteer response times are significantly delayed due to having to respond from home or work. This directly contradicted the claims that 'modernisation'of the Fire Service would be of benefit to the public.

The above myths were put forward in an attempt to lessen the amount of fire trucks around our cities and completely disregarded the increase in population density, infill housing, increased traffic congestion and the need for an emergency service that is flexible enough to cope with any major disaster.

In 1995 a public referendum was held to ask the New zealand public just what they thought of cuts in firefighter numbers, it took very few weeks to get enough signatures to force a referendum. More Government underhandedness was seen when despite a postal ballot being held for the local body elections in October and the issue could have been sorted by including a voting paper regarding the firefighters in the voting pack which was to be sent out, which would have involved minimum extra cost, the Government decided to hold a separate election in late November, with polling booths set up in halls across the country for a cost of $10 million. Why? It was obvious the Government did not want to make it easy for the New Zealand public to have their say, and spent millions of taxpayers money to ensure that was the case.

The result of the poll clearly endorsed the firefighters opposition to the cuts. However this result was completely ignored  and it was only with a change of Government in 1999 that the dollar driven agenda orchestrated by the New Right was removed.

WHAT WE HAVE LEARNED FROM THIS EXPERIENCE IS THAT AS LONG AS THE NEW RIGHT HAVE INFLUENCE OVER POLITICIANS, OUR FIRE SERVICE, POLICE, HEALTH SERVICE AND EDUCATION WILL ALWAYS BE AT RISK OF CUTS OR PRIVATISATION

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ACC FUTURES COALITION
 
New Zealanders working together to Maintain and Improve ACC as a Public Service
 
Who and What is the ACC Futures Coalition
The ACC Futures Coalition formed following a seminar held in September 2008 on the future of ACC in light of the policies the political parties were taking into the election. Our aim is to keep the current model of ACC as a single, publicly owned provider and to seek to maintain and improve the scheme.  We currently consist of a number of participating organisations representing treatment providers, academics, consumers and recreation providers, plus unions.  In April 2009 we held a successful launch in Wellington. Information about us can be found on our website www.accfutures.org.nz

 Newsletter - No. 1 October 2009
Welcome to the first newsletter from the ACC Futures Coalition. This is the first newsletter of what we intend to be a series as we campaign to maintain and improve ACC as a great public service for New Zealanders.

Government Commits to Privatisation of ACC
In 2008 the National Party was elected to government with a policy to investigate the opening of the work account of ACC to 'competition' - aka privatisation. By the end of last week this had become a clear commitment (without the promised investigation) subject only to the Government's 'Stocktake' of ACC confirming the feasibility of the policy. The Government has already said that it is likely to get the answer it wants from the Stocktake and is now speaking openly about the possibility that more of the ACC's accounts could be handed over to the private sector.

The prospect of privatisation of the work account is what led to the formation of the ACC Coalition but the scope of the Government's commitment has exceeded our worst fears. The Coalition will be organising to oppose this.
We need all organisations who may be affected by this PRIVATISATION AGENDA, including sports groups, recreation groups, tourism groups, small businesses etc to join the coalition.  Please circulate this newsletter and encourage interested organisations to contact us on info@accfutures.org.nz 

Out of $15.322 billion worth of privatised former New Zealand state assets, companies connected with the Mont Pelerin Society's main New Zealand front, the Business Roundtable, bought an astounding $12.542 billion, or about 82% of the total.
New Right Fight Copyright 2008