NEW ZEALAND CLAS­SIC CAR PRICE ON ACC Levies

Greg Price What guar­an­tee have we got that bad in­vest­ment de­ci­sions in the fu­ture will not lead to fur­ther hikes in levies?

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When ACC was first foisted upon us in the early ’70s, it was sup­posed to be a no-fault scheme — this meant that if you caused a sig­nif­i­cant-in­jury ac­ci­dent you were not per­son­ally li­able for in­juries to other par­ties. By com­par­i­son, in the US some peo­ple make a liv­ing out of be­ing skit­tled while cross­ing the street, then su­ing the hap­less mo­torist for zil­lions of dol­lars. Lawyers spe­cial­iz­ing in such lit­i­ga­tion live very com­fort­ably, thank you very much.

Poor In­vest­ments

As far as I’m aware, no one was ever held re­spon­si­ble for wip­ing out the bulk of ACC’S re­serves due to poor in­vest­ment choices, the short­fall be­ing cam­ou­flaged by the de­ci­sion to make the ACC Fund ‘self-fund­ing.’ In other words, the amount of money col­lected had to be suf­fi­cient to pay for the on-go­ing treat­ment of an in­jured per­son. Thus, huge in­creases in the ACC levy were added to the an­nual cost of reg­is­ter­ing your ve­hi­cle, and ACC levies were ap­plied to the price of petrol, with the in­tent of en­sur­ing that those who trav­elled the most dis­tances paid a greater share.

New Levies

By the time you read this the new levies will have come into ef­fect, and well done to ACC for ear­lier in­form­ing mo­torists not to register their cars be­yond July 1, 2015. Mind you, as many learned about the de­creases prior to Christ­mas 2014, ACC had lit­tle op­tion but to pub­li­cally an­nounce the re­duc­tions.

In ar­riv­ing at the new levies, some­one de­cided that a safety rat­ing should be used to de­ter­mine the amount of each in­di­vid­ual levy. If any of you have re­cently bought a ve­hi­cle from a car dealer, new or used — the car, not the dealer — the seller is re­quired to dis­play the ve­hi­cle’s safety rat­ing. This is where it gets a bit dodgy. I have seen many a 4WD owner protest­ing the new rates for what they claim are very safe ve­hi­cles and, to be hon­est, some of the logic es­capes me.

The good news for clas­sic car own­ers is that from July 1, 2015, the to­tal cost for your over-40-year-old ve­hi­cle will be (wait for it) a grand to­tal of $71.65, down from $115-plus. So the col­lec­tors among us can now register three clas­sics for what used to be the price of two! That’s got to be good news.

There is a web­site — right­car.govt.nz — on which you can en­ter your ve­hi­cle’s reg­is­tra­tion num­ber and find out how much reg­is­tra­tion will cost af­ter July 1, 2015. Bear­ing in mind these rates are based on the safety rat­ing of the ve­hi­cle.

I en­tered our trusty 1995 Mit­subishi Char­iot and found that it will cost $238.45 an­nu­ally, ap­par­ently be­cause it hasn’t been rated. Next up was the 1995 Mus­tang GT con­vert­ible — for some weird rea­son it was only $198.20. Upon en­ter­ing the de­tails of our old ex­am­bu­lance Bed­ford CF280 with the fac­tory-fit­ted Holden 202 and GM au­to­matic (for cart­ing the race bikes around) I found it is even less — $175.92! Surely, a 5.0-litre V8-pow­ered mus­cle car is hardly safer than an old peo­ple-mover? And what about the am­bu­lance? It’s the size of a small bus! And yes, it is prop­erly reg­is­tered as a pas­sen­ger-car­ry­ing ve­hi­cle, not as an am­bu­lance, which as I men­tioned pre­vi­ously in an ear­lier ar­ti­cle, is much cheaper.

There was much con­cern when these new levies were be­ing mooted that some idiot would de­clare that all old ve­hi­cles are dan­ger­ous and there­fore should be sub­ject to higher levies, not lower ones. Good on or­ga­ni­za­tions like the Fed­er­a­tion of Mo­tor­ing Clubs (FOMC), which I un­der­stand lob­bied ex­ten­sively on our be­half, and with clearly good re­sults.

Bad News

The bad news is that once it be­comes known how much some own­ers of flash new ve­hi­cles are go­ing to pay, these own­ers will start the lob­by­ing process, so ex­pect some changes. If the Min­is­ter is to be be­lieved, then we can ex­pect fur­ther de­creases next li­cens­ing year — so don’t register your cars be­yond July 2016.

Another in­ter­est­ing anec­do­tal statis­tic is that, work­ing on the ba­sis that camper­vans fea­ture in a dis­pro­por­tion­ately high num­ber of ac­ci­dents (ir­re­spec­tive of who is driv­ing them), one could ex­pect that the ACC com­po­nent of the li­cence fee for a camper­van would be rather large. Not so, it would seem. And, hav­ing re­gard for the dif­fer­ences in the new reg­is­tra­tion fees for my own ve­hi­cle, it is ev­i­dent that logic seem­ingly played lit­tle part in ar­riv­ing at the new ar­ray of levies.

Fi­nally, a mes­sage to those who might be tempted to in­vest in any fu­ture ACC levy sur­plus. The only peo­ple who make money on the share mar­ket are the ma­jor in­ter­na­tional fund man­agers. They even have pro­grammes that scan the in­ter­net look­ing for key­words which might in­di­cate that a par­tic­u­lar share­hold­ing should be dis­posed of, and the share­hold­ing is au­to­mat­i­cally sold off. By the time we hear about it in New Zealand it is of­ten too late — the share price has al­ready spi­ralled down­wards (af­ter their sell-off, of course!). Profit tak­ing is another as­pect we have no con­trol over. There you are sit­ting at home, watch­ing your shares in­crease, when sud­denly the price plum­mets. This is what hap­pens when a big fund man­ager de­cides to sell off a port­fo­lio at the top price, which of course starts the share price fall, and when it is low enough they buy back in. This is no place for our ACC Funds to be ‘in­vested’. The next time some­one in au­thor­ity makes a de­ci­sion that ef­fec­tively wipes out the ACC sur­plus, there should be con­se­quences!

In the mean­time, en­joy the cheaper rates while you can and, if con­tem­plat­ing buy­ing another ve­hi­cle, run the plate through right­car.govt.nz, and make your de­ci­sion based on what­ever is the cheap­est.

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