How Were ACC's Levy Sausages Made? A Response to John Williams's Article in The New Zealand Herald

Pete: 00:00:13

Are you tired of the ever increasing cost of motorcycle registration here in New Zealand? If you're nodding your head, you're not alone. I'm Pete and this is Keep It Twisted, the official podcast of MAGNZ.

There's no guests joining us this week. Instead, we've got an opinion piece that we really wanted to share with you.

Although we've looked high and low, we can't find any politicians standing in the general election in November who are even talking about ACC motorcycle levy increases.

And there are even fewer who've offered to explore alternative funding models that don't penalise riders who own and register more than one motorcycle.

So it's actually quite refreshing to see that John Williamson, a columnist for the New Zealand Herald and the Northern Advocate, published an article about the levy increases on 19 August. However, we thought it's only right that we should examine John's article and give our considered reply.

While John deserves credit for his article, ACC's communications team could have hardly presented its case more faithfully.

His column climbs on board ACC's pillion seat fastens its helmet and holds firmly to the official narrative that motorcycles are dangerous rider injuries are expensive and therefore levy increases are justified. As the chairman of Road Safe Northland and the Northland Road Safety Trust, Williamson plainly has considerable confidence in ACC and nzta.

That's his prerogative. But our favourite public agencies deserve to have their tyres kicked and not just their paintwork admired.

Motorcyclists don't dispute that riding carries risk. We know that motorcycles don't come with airbags, crumple zones or a protective steel cage wrapped around the rider.

When something goes wrong, we generally come off second best. But vulnerability is not culpability. An injury cost is not crash causation, and no fault should not mean no thought.

Williamson begins with the familiar claim that motorcycles make up 4% of registered vehicles but account for 20% of ACC's road injury costs. Those percentages arrive wearing a high vis jacket and looking very official. Unfortunately, they don't necessarily measure comparable things.

ACC's own pricing report in: 2024

The difference may depend on whether we count every vehicle recorded on the vehicle register, only current licensed motorcycles, or ACC's preferred measure of equivalent full year registration exposure. That matters. Thousands of motorcyclists are seasonal, unlicensed or on hold.

Many riders own several bikes and motorcyclists with three motorcycles can only ride one at a time, counting every bike in the garage as a separate unit of risk, while comparing that number with injuries arising from motorcycles actually being ridden puts apples, oranges and several unredited registered lemons into the same statistical fruit bowl. The claim that motorcyclists generate 20% of road injury crash costs also needs to be opened up.

Cost is not crash frequency and it does not identify who caused the crash. ACC also calculates the expected lifetime cost of injuries.

Its pricing report explained that serious injury claimants may require support for more than 80 years. The estimate is affected by rehabilitation duration, long term care, wage comparisons, medical inflation, discount rates and investment returns.

But one catastrophic spiral or brain injury can move those numbers dramatically. We accept that motorcycle injuries can be severe. Nobody disputes that.

But the statistics do not prove that the rider caused the crash, that engine capacity caused the injury, or that every owner of a motorcycle represents the same risk. The public is also encouraged to imagine that ACC has a tidy cash register receipt showing exactly what the motorcyclist injuries cost. It doesn't.

ACC AC acknowledges that it does not record the precise vehicle class associated with every motor vehicle account claim. It tries to match its claims database with the police and NZTA crash records.

Its pricing report says a reasonably large number of ACC claims cannot be matched.

Some crashes are not attended by police, some records contain errors, some claims and crashes cannot be linked without creating the risk of false matches.

ACC then combines the successfully matched information with a statistical model which estimates lifetime claim costs, and it uses that to infer the relative cost of different vehicle classes.

That may be a legitimate actuarial exercise, but it's not the waiter placing an itemised bill on the table and saying, here is precisely what the motorcyclist ordered. It's more like a casserole.

Some known ingredients, some estimated quantities, some unmatched leftovers, and a generous helping of assumptions stirred through the pot.

In December: 2025

There may be an accounting explanation for that, but it's hardly the simple user pays invoice suggested by the statement that motorcyclists only cover 28% of their costs and must progressively pay 33 and then 37% next year. The engine capacity bands are harder still to defend as a genuine measure of risk.

ACC now explicitly says on its website, correlation does not imply causation. It also acknowledges that engine capacity does not cause higher injury risk.

It says only that the Engine size is associated with average claim cost across the motorcycle fleet. Nevertheless, they're still using cubic capacity to determine your levy.

This is like calculating the danger presented by dogs using their weight without asking about breed, temperament, training, owner behavior or whether the dog even leaves its owner's property.

A: 1000

Williamson even gets the largest increase wrong. He says it occurred in the 250-600cc range. ACC's published table shows that the largest dollar increase for motorcycles is in the over 750cc bracket.

The increase there is $196 compared with $121 for motorcycles between 251 and 600cc. We've also been told that ACC levies your activity.

If the activity being levied is riding, why is the main charge attracted to every motorcycle owned rather than the rider? Or the amount of time you spend on the road?

A rider with three motorcycles pays three registration levies despite being physically incapable of riding all three at the same time. Someone riding one motorcycle 25,000 km a year may pay less than a collector whose three bikes travel less than 1,000 kilometres each.

That's not really an activity levy, it's a garage space levy. ACC's new rider reward also shows that rider base administration is possible.

A registered owner who completes a Ride Forever Gold course receives the discount across every motorcycle registered in their name game. Suddenly ACC can see the single human being standing behind several number plates when applying their discount.

But apparently they become short sighted again when it's time to collect their levies. MAGNZ absolutely supports quality rider training. Ride Forever courses are useful and many riders speak highly of them.

But Williamson repeats ACC claim that Gold course participants are 26% less likely to crash, as if the course itself had been scientifically proven to cause that reduction. What we don't know is whether the riders who voluntarily attend those courses are already more experienced, cautious and safety conscious.

I've completed several Ride Forever courses, including a Gold Course at the beginning of August. None of the Ride Forever courses include a pass or fail competency assessment. I describe them as refresher coaching, not advanced training.

Bronze and Silver courses are not compulsory prerequisites and you only get the ACC levy discount on completion of a Gold Course. Such coaching may reduce risk.

We sincerely hope it does, but A correlation cannot be magically applied to injury causation just because everyone likes the program producing it.

ACC says that 37% of rider and pillion injury claims involve a single motorcycle on a public road where police considered that the rider's actions at least contributed in part, that statistic deserves attention, but so do all the other crashes. Being a no fault scheme means that an injured person receives support regardless of blame.

It shouldn't mean that causation becomes irrelevant when ACC decides which road user groups should receive the largest levy invoice. If a car turns across a motorcycle's path, the rider's lack of steel protection may make the resulting injury more expensive.

But being more seriously injured does not make the rider more responsible for creating the crash. Williamson refers to riders who are a nuisance or appear to have a death wish, but doesn't provide any evidence to that.

Most motorcyclists are ordinary New Zealanders. We commute, we tour, we work, we raise families and we try very hard to arrive home in one piece. We don't think we're Evil Knievel.

Most of us struggle to get off the sofa without making some involuntary noises. We're not asking New Zealanders to pretend that motorcycles are as physically protective as cars. Of course they're not.

We are asking ACC to disclose a clear and reproducible chain between the crashes, the claims, the unmatched records, the lifetime cost estimates, the exposure assumptions and the engine capacity bands used to set the levies. Public agencies are not delicate antiques. They should be open to public scrutiny and they should be able to survive being questioned.

If ACC wants motorcyclists and the wider public to swallow the bill, it should open the kitchen door, put the recipe on the bench and answer the question it's avoided so far. A question asked by the judge at the High Court hearing earlier this month. How were these sausages made?

I'll put the links to John Williamson's article and the published MAGNZ response in the notes for this episode.

Visit magnz.orgnz to find out more about our High Court challenge and head to KeepItWisted Co NZ to order your limited edition Keep It Twisted tubular scarf. That's all for today. Please remember to follow or subscribe to get the next episode of Keep It Twisted delivered direct to your device.

Until then, ride safe. Stands up, visors down and Keep it twisted