We must be careful with kite flying, as indeed with the whole of Act’s thinking, as what we once dismissed as ludicrous right-wing mischief, may end up in a hastily drafted bill and then an Act of Parliament.
In the 2020 election run up, some of us pilloried Act for its crazy suggestions. I wrote in the Daily Blog: Vote ACT for a shattered economy :
“The policies are so ill conceived it is perhaps a bad idea to give them any air-time. But voters who are disillusioned with National appear to be flocking to ACT. They need to take a hard look at their disastrously contractionary recipes for poverty that are exactly the opposite of what is needed.”
That was nearly five years ago. Just look at what right wing contractionary policies we are getting now. We have a really nasty recession prolonged by austerity policies. Now that some ACT voters too re feeling the pain. Can we expect some more kites to fly? In An analysis of Act policies I warned of Act’s 2020 kite flying on ill-conceived unemployment insurance
“On the loss of employment, a taxpayer can claim 55 percent of their average weekly earnings over the previous 52 (or fewer) weeks. The maximum yearly payable amount is $60,000. Insurance can only be claimed for one week for each five weeks the person has worked, up to a maximum of 26 weeks per claim. Someone who has worked continuously for only one year could claim up to ten weeks’ employment insurance.”
I wrote,
According to ACT the ‘worthy’ working middle class must at all costs maintain their superiority- as they have “paid high taxes for years” When they lose work “they get little back in benefits” and what a huge calamity it would be for them to drop to the existing unemployment benefit and face “the stigma associated with welfare created by long-term beneficiaries who have made it a lifestyle choice.” That phrase “a lifestyle choice” reveals the heart of ACT. Oh the faux outrage now that the middle class discover how miserable the welfare system actually is. How could they possibly be treated as if they were just a ‘welfare beneficiary’? How appealing it might look that ACT can come to the rescue. How predictable all this is to a weary welfare sector unable to make any progress on the fundamental issues of welfare reform with the Labour coalition government.
The latest kite flying is found in his 2025 State of the Nation speech, where David Seymour suggested that New Zealand should consider giving each citizen $6000 to spend on private health insurance instead of relying solely on the public healthcare system. He argued that this would provide individuals with more choice and potentially better value for their healthcare.
He said “we now spend $6000 per citizen on healthcare” asking the audience how many of them would give up their right to the public healthcare system if they got to spend on their own private insurance.
What on earth did he mean? Surely not that people would forego access to the public system if they take up the $6000? Some people, wealthy enough to have private health insurance already, might opt for the $6000. At best, others would gain limited coverage to a small number of benefits, or very little in other words.
On further thought, it is even more sinister.
The health system costs $30 billion to run, that divided by 5 million population gives $6000 each. When the $30billion is given back to us, instead of to the public health system, money flows to competing private insurers who will have to buy the services we could previously access. Private insurers will have huge administrative costs and must charge enough to make profits. Competing private insurers will reject the bad risks (including those already sick) so many people would lose access to even the minimal public system we now enjoy under universal provision.. Would freedom loving ACT legislate to outlaw competition so no one can be rejected? Is this the trojan horse for full privatisation? My head hurts at the absurdity of it all.
Saving money, reducing the size of the state are what it is all about. Be afraid. Be very afraid.
We never thought a well-liked, successful and efficient school lunch scheme with so many spillover benefits for communities would ever be replaced with a poorly conceived centralised system that serves unpalatable food, if it even gets to schools on time. Just to save $100m.
There is so much anti-state, anti-government spending rhetoric at present that we’re in danger of losing sight of the fundamental reasons for a sound, secure, and well-supported public sector.
Take a major role that the state plays: the provision of the welfare state: a combination of spending on education, healthcare, care services, benefits, social housing, accident compensation, superannuation and working for families.
The commonly understood purpose of the ’welfare state’ is to help the poorest in society. It ameliorates the highly unequal outcome of free market economics. In economese jargon we might say this is its “equity role”
But there is an even more fundamental role for the welfare state, “the efficiency role” that is very poorly understood. Even if we had a highly equal distribution of resources, people would not be able to purchase the certainty security and protection they crave though private insurance because in economese jargon ‘the market fails’. Private insurance works well only in limited circumstances and those circumstances are contested vigorously to exclude people from payments.
In the very unequal New Zealand we have now, wealthy citizens can always look after themselves but, free market insurance would be non-existent to protect the vast majority from the large risks they face.
Thus, there would be no inflation-proofed private annuities (secure inflation proofed income that for as long as you live in retirement), nor any long- term income protection adjusted for inflation or wage growth for sickness, accident or unemployment. On the global front, private insurance is proving deficient for adequate protection in time of climate change, natural disasters, with properties becoming uninsurable at any price over time. Many risks are not random but systemic- a huge challenge for the future of private insurance.
Private insurance works best when the risk of the misfortune is well defined, the event insured against is random, the costs of claims are finite and predictable, and annual premiums can allow for adjustments and re-estimation each year.
Private insurance is quite good, for example, at car insurance, life insurance, and limited health insurance to cover some events, but with lots of fine print.
The many risks faced by New Zealanders, i.e. being born sick or with a disability, being very old or very young without wealthy families, being afflicted with a disabling disease, needing long term care, are hard to price and have open ended costs which private insurance companies run a mile from.
Most of the things we enjoy from the state or collective provision do not meet the criteria for successful private insurance. For good reason, insurance companies would be totally uninterested in supplying products to cover things like paid parental leave, Working for Families, unemployment benefits, NZ Superannuation, preventive healthcare, environmental quality, earthquakes and affordable basic healthcare in a complex world.
While a small private health insurance sector for the rich can work to relieve some pressure on the state especially for limited well-defined elective surgery, the public health system must be supported and enhanced, not undermined by private insurance mythology as proposed so disingenuously by David Seymour.
This is one of my few areas of agreement with the contemporary left: I do NOT want to see the Americanization of our healthcare system.
It is good to have that agreement as to the fallacy of the end goal of Americanisation and to be aware that bit by bit that is where our health system is heading
You’re assuming a false dichotomy.
The US health system certainly has its share of problems but none are caused by a free market. Just the opposite: It is controlled by special interest groups and restrictive regulations that block competition.
https://www.rnz.co.nz/news/ldr/541196/health-conference-aimed-at-lighting-a-fire-for-public-services?
Excellent article. You might have overlooked the fact the private health care does not cover all medical cases – such as accident and emergency and high risk or complex issues – these will always be referred back to the public health system. Private insurers and practitioners carefully select the individuals and medical conditions they will address to minimize risk and cost.
That’s right. They leave the hard stuff for us ‘socialists’ to cope with.
A few of the CoC look as if they are heading for heart attacks and that’s when the truth will hit them.
Oh dear, how sad, what a pity!
Thanks Champagne socialist
You are assuming there will be a public system to refer back to? Private insurance is very limited in what it covers but is growing as the public system becomes more run down.
The same medical practitioners here operate in both the public and private sector. This is the irony. The private system in this country is all about another type of underwriter running the show, in this instance the insurance industry. The though of that being the national norm is enough to make this Kiwi feel very sick.
Hey Neil, the American cash register on the counter health system must never be allowed in NZ again. The CoC has to be gotten rid of quick smart before any more damage is done.
Fantastic Post @ S.S.J. but you make far too much sense. The same eyes that eye up seymour would also eye up trump. That, is how dumb Kiwis have become. If politics is only about the money then rich, terminal fools can buy the mad house.
The lizard lipped little prick’s right in one respect. AO/NZ has to try and go in a different direction financially because national and its mmp clones have dragged our agrarian primary industry ( Farming for those old fashioned of you. ) down so far that only a bizarre kind of miracle will save our souls and arses.
I just came back from a long, long drive crisscrossing the lower south island and saw empty green fields with a few dairy cows here and there. Our primary agrarian infrastructure has been disassembled for the greed of a few urban billionaires and millionaires and as if that’s not enough to guarantee a sleepless night or more then consider the darker implications. If AO/NZ’s ever going to rebuild itself as the ‘Market Garden of Europe’ as it was once described then the corrupt politics of then and now must be addressed and that’s likely to happen. Not. We’ll be on-sold like slaves to a starving, burning world and the urban criminal elite will prosper and those same criminals who fucked us will be saying ” Oh my God ! Farming is saving our arses! Who’d a knew? Wow! Well I never? Why weren’t we farming then exporting to a winter bound northern hemisphere 89 years ago ? OMG. Wow. Huh? Fancy that? Never would a thunk it.
Private choice for the individual becomes more and more attractive the greater the failures of the government system.
If you are in the government’s system, you get what the system says you get. That may or may not be to a good standard, or in time, or what you need.
We’ve had a lot of experience of the public health system Ada.
We’ve always received help to a good standard, usually timely and exactly what’s needed.
Husband is in hosp. at the moment. They are very busy, very slow and there are no beds to spare. However, everyone without exception, lives up to their professional standards and does their very best to see that things happen. That’s what professionals do!
These are tricky problems exacerbated by other tricky chronic problems, not an easy fix.
No private provider would touch them.
Despite all the spanners Luxy and Co have thrown in the works in the last year, our public health system, being run on the ground by professional medical staff, is not dead yet.
If you really knew anything about it, you’d have much more respect for our dedicated health professionals and the work they do. Don’t judge them by you shallow right-wing standards.
$6,000….let’s talk real money. More like $600,000. Probably more.
Ada, people such as yourself love to praise/vote for people who undermine the state. They sabotage it and then say “see I told you”. Healthcare is a classic, but by no means, unique example. Fobbing off power generation another classic
You obviously know little about the health system in this country.
If it happens, NZ wilfully chose it. You can’t sleepwalk into this stuff. National Party supporters, and I say this without any fondness for the breed, are too intelligent to misunderstand how insurance works, or not see that selling their stake in public health for a $6k one-off payment is moronic to the extreme. Seriously, dividing $30B by 5 million and offering that as true value? hahaha Bro, plz! Only people I can think of who would think this is a good idea would be media professionals, but are there enough of them to float this as a reality?
About 8 years ago my wife and I cancelled our private health insurance. We were paying over $3000 per year.
The first $100 of each claim was considered an excess so hence was not paid. Any invoices over 6 months old were not accepted.
As we were and still are fairly healthy this insurance was not sensible for us.
However the reason for cancelling was that we would be paid 50% of the cost for a hiatus hernia operation for reasons that were unclear to us but were apparently in the fine print interpretation.
To cap this saga off, the surgeon said at the consultation after a examination ” I can do this tomorrow or you can wait 8 weeks because I am going on holiday”.
This was scary as there would have been no follow up or help if there was problems.
Waited 10 weeks for the public system that provided excellent service and good follow up.
Remember this guy was the only guy in Parliament to vote 119-1 against the Gun Reform Bill for regulation of semi auto weapons after the Christchurch mass shooting, among one of many of his great ideas.
Id forgotten that one- we need a list so we dont forget how far out his ideas are
Capitalism, the social cancer of our exploit, of our being.
Is a kite? Being ACT it’s probably more (a really shitty) pie in the sky
you should have included bombers graphic of the number of hospital beds and how they have reduced over the years including private beds. where would this private healthcare reside? ACT would give away our hospitals to Accuro and Southern Cross for peanuts
Seymour has demonstrated poor judgment on at least three occasions lately.
He’s become blinded by what he perceives as his own brilliance and any criticism is seen as coming for envious individuals who are annoyed because they aren’t as clever as him.
He is showing us that it wouldn’t be wise to give him any more power. Sound familiar?
Trump warned people what he’d do and he’s doing it. We don’t want that situation here where Seymour places himself above the law and critics can be silenced.
more bad judgement today on the steps of parliament–time to go?
He would weasel out somehow – probably extorting the skinhead PM and the leader of Winston First!
Allow me to explain how life works:
Most wealthy people don’t need to be here and they’ll only put up with being milked by the IRD to pay for other people’s welfare health benefits to a degree.
At some point a threshold is reached and they leave, taking jobs and tax revenue with them.