Kerre McIvor

Kerre McIvor is a Herald on Sunday columnist

Kerre McIvor: $3b windfall was no accident

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ACC chief executive Scott Pickering. Photo / Mark Mitchell
ACC chief executive Scott Pickering. Photo / Mark Mitchell

Not so very long ago, there was panic in the ranks of the Accident Compensation Corporation.

Officials warned the Government in 2008 that levies on workers would have to increase to cover an estimated $1.33 billion hole in the earners' account over the next three years. That came hard on the heels of news of a billion-dollar blowout in the non-earners' account - for children, the elderly, those on a benefit and students.

There were also dire warnings that ACC's investments were performing poorly because of the global financial crisis, and none of those losses had been factored into the corporation's shortfall.

The bureaucratic doomsayers were certain disaster was imminent.

Cut to this year and we receive the happy news that not only can the ACC report a net surplus, they can report a net surplus that is $3.6 billion ahead of schedule.

The corporation's chief executive Scott Pickering crowed delightedly that the ACC was in the best financial position it had ever been, and that it was highly likely there would be decreases in ACC levies in 2014/15 and, more importantly, the corporation would be fully self-funding by its target of 2019.

Of course, those who've been battling to get their ACC claims accepted say the huge surplus has come at their expense, and it may well be hard for the ACC to justify taking a hard line on claimants in the near future.

But what I'm most concerned about is that the ACC didn't know the windfall was coming. Don't get me wrong, it's great that it did - but doesn't the ACC employ financial experts who are supposed to slaughter chickens and read their entrails to predict what the corporation's finances should look like, year on year?

I know nothing about finance and investment so this may be a naive question, but shouldn't you know that an extra $3 billion is coming your way if you're doing your job properly?

If you don't know about the $3 billion surplus, then wouldn't the inverse be true - you're not going to know about a looming $3 billion deficit?

I'm not looking a gift horse in the mouth. In these straitened times, three bill is three bill. But when I was working in television, our production managers knew where every last cent of our programme budget was coming from and what it was going to be spent on.

They predicted possible windfalls from funding agencies and took into account blowouts on wrap parties.

Their projected and actual budgets were damn near identical. Obviously their budgets were much smaller, but then they didn't have the staff, the expert advisers and the resources of the ACC.

The bean-counters may have been pleasantly surprised by their surplus - I'm surprised they didn't see an extra $3 billion coming their way.

- Herald on Sunday

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