In the last series of articles examining motorcyclists’ injuries from on-road riding, an understanding of why ACC is facing mounting bills from our misfortune was reached by recognising

(a)   The number of motorcycles on the road has been rising

(b)   The costs of treatment and rehabilitation from our severe injuries has been rising faster than inflation and faster than our levies have been rising

Given we do not pay full cost recovery for our injuries, that there is a gap that is funded by other road users and from other ACC accounts, these trends have seen that ‘deficit’ balloon. Of course it is the case that a significant percentage of the injuries that motorcyclists incur are the “fault” of drivers of other vehicles and therefore full funding wouldn’t be fair anyway. That’s a different debate, we have a ‘no fault’ regime but at the same time the levies for various activities have long reflected the relative risk of those activities, at least this principle has been followed where the spend on a particular source of injuries is substantial. Motorcycling has been such a case.

But there’s another issue here. The government introduced the Motorcycling Safety Levy (MSL) in order to try and get motorcyclists to play a role in reducing the injury count and the consequent bill ACC faces for those. What the Motorcycle Safety Advisory Council (or MOTO NZ) has noted is that 30% of injuries arise from riders losing control and/or running off the road, and when we survey attitudinal responses amongst riders we find significant numbers feeling that lack of skill of riders is a significant contributing factor. If you also consider that the role that proper safety gear, high viz clothing, sufficient lighting on bikes can play, then there is a significant part that riders can play in managing their own vulnerability to injury. It’s not the whole story of course – driver error we know is a significant factor as well.

But if we accept that our own behaviour, skills and precautionary approach do influence the overall chance of injury then it’s likely that any measure that incentivises us to take all reasonable steps to protect ourselves is worth encouraging. You might argue that people don’t want to get injured, so would be taking these steps anyway. But the attitudinal responses from riders admit that there are those amongst us who do not take all measures to minimise the risk. We know lack of rider skill for example is a significant cause of injury. Any measure that encourages greater acquiring of sufficient skill is worth considering at least.

And when you think about it, motorcyclist injuries that are self-inflicted are a significant part of our injury bill so in effect those are injuries we as a community can reduce and directly reap the benefit. Injuries caused by the road or by other vehicles require a different approach. MOTO NZ is developing a range of strategies for each of those – developing guidelines for the roading agencies to help them design and maintain roads that are more motorcycle friendly, and initiatives to assist drivers be aware of the motorcycle are a couple of areas. But this matter of our self-inflicted injuries opens up its own range of appropriate responses.  That is the subject of this discussion.

Helping Ourselves

Given then, that we don’t take adequate measures off our own bat to reduce self-inflicted injuries from on-road riding, two broad approaches offer ways we can improve;

(a)   Investing in up-skilling

(b)   Financial incentives to encourage improvements in our self-management as riders.

On up-skilling riders so more can take care of themselves, there are many safer riding strategies out there already covering wider use of protective clothing, rider training for varying traffic and weather conditions, improved bike handling, refresher courses and so on. For MOTO NZ the challenge is to see where there are gaps in these initiatives from where an investment would reap a cost-effective benefit. Rider training for example, will soak up as much money as you care to throw at it, but the relevant question is whether the additional dollars are having any material impact – or whether, for instance the riders that do maintain their skills from attending such courses, aren’t the ones likely to inflict injuries on themselves anyway. If that’s the case they’re preaching to the converted and it’s not an effective spend. It is a dog’s breakfast for MOTO NZ to sort through which areas would benefit in a material sense from larger investment or a different type of investment. But this certainly is a topic within the ongoing evaluation of investment possibilities.

The second path to self-improvement is very interesting, and politically challenging. We know the price mechanism works, or at least at price point it will. For example when the $30 MSL was introduced the number of bikes and the periods for which they were being relicensed fell away to a level that more accurately reflected that actual usage of those motorcycles on the roads. That reaction has now settled.

There is no question that pricing properly will have an impact, especially where there’s a relatively costless way for the customer to respond to the price signal. This then raises the question of whether imposing the ACC levy to cover motorcycle injuries via the annual bike relicensing fee is optimal the best we can do. We’ve had a lot of feedback from our community that the levy would be more fairly imposed on a per rider basis. The oft-repeated riposte you hear is

“we can only ride one motorcycle at a time, so where’s the sense in penalising those who choose to own more than one bike?”

Of course the same argument can be launched for cars. To the extent an owner is the only driver and has multiple cars, their chances of being injured are no greater through ownership of more than one vehicle. So motorcyclists don’t have this issue on their own. The difference of course is bikes are cheaper than cars, take up less space and we all like to accumulate them – so if anything the fault of charging per bike is even more pertinent.

But it would be cleverer to use the price mechanism to change the behaviour of riders. ACC levies go up because ACC needs to recover the cost of injuries but if we are smarter on how we levy that charge and at the same stroke incentivise riders to improve their self-management and lower the number and bill for self-induced injuries, then it’s a win-win. We need to impose the annual ACC levy on riders not on their bikes. I would argue that if we imposed the ACC levy through the rider licence renewal that in a single stroke we would make the biggest improvement in reducing on-road riding injuries.

Imposing the ACC levy on the rider rather than the machine opens up possibilities for several ways to encourage riders to improve their riding performance and attack this number of self-inflicted injuries.

The standard approach in the private insurance market is you reward good behaviour, and discourage bad. I’m talking about designing the compulsory ACC levy to do just that. Here’s a first pass;

(a)   Introduce a “No claims” bonus – the annual rider licence fee should be discounted for the number of successive years you have maintained your motorcycle licence but not had an ACC claim

(b)   Excess – there needs to be a capped annual rider licence fee discount available to the extent you are prepared to self-insure. All riders should be liable to pay say the first $200 of any ACC claim and then as well that could be extended to say $500 in return for a 10% reduction in our levy.

(c)    A break in your annual rider licence renewal should trigger a user-pays relicensing process. Obviously by imposing the ACC levy via an annual renewal of your riding licence there is a strong incentive for riders who aren’t intending to ride, not to renew that class of their licence. That’s a good thing because it enables the gate to be controlled for returning riders to ensure their competency levels are adequate. Injuries to returning riders have been a source of much angst. The extent of the relicensing required is dependent upon how long a break from riding you have taken.

(d)   It should be possible to limit the income replacement component to ACC’s entitlement claims. It is a fact that riders with high salaries who get injured cost us a hell of a lot more in the levies we pay. Why don’t we put a limit on income replacement, or impose an additional levy if you want income replacement above a prescribed base? That would reduce significantly this component of the entitlement claims made on ACC that we have to fund.

One of the consequences of this alternative scheme is that those who got their motorcycle licence years ago and haven’t ridden for yonks (or at least relicensed every year) face hurdles getting back on the bike. We know returning riders are a greater injury risk, we need them to be adequately competent for the bike they get on, when they return. By switching from ACC levies being imposed on the bike to on the rider we can control the gate on who is competent to ride a motorcycle. A five year break say would require a full testing process again say. Shorter breaks might require rider training course to be attended.

Okay so those are the positives. What’s the negative?

The only objection I’ve come across is that driver/rider relicensing occurs only every 10 years, so an annual regime requires a whole new billing regime to be established, requires annual compliance by licence holders.

Let’s consider this for a moment. We do live in the age of computers, increasing numbers of people have mobile internet. The software to build such an annual rider licence renewal regime is a one-off cost and will be utterly immaterial given the scope of the problem we’re discussing here and its cost to the health system. We know that pricing can incentivise the behaviour we all want to encourage, we know self-inflicted injuries are a substantial cost – via ACC levies – on all of us. The inertia of being a slave to a legacy system shouldn’t be the telling factor in preventing a smarter solution.

One of the frustrations of trawling through the entrails of the data on motorcycling injuries is that you pretty soon appreciate the limitations to achieving major improvements from road engineering or rider and driver education. When you are facing a charging mechanism that doesn’t efficiently encourage the behaviour we want, it’s pretty clear what needs to be done and how improved competence can quickly be rewarded. But it requires a paradigm shift and bold policy-making – not necessarily a natural act.

Dr Gareth Morgan was the chairman of the Motorcycle Safety Advisory Council for its first 18 months. The views expressed above are his and do not purport to be those of the Council.

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