CTU media release
19 November 2009

CTU says no to ACC full-funding, experience rating and compensation cuts

The CTU has today criticised the continuing insistence on full-funding for ACC and given strong warnings against the return of experience rating in ACC’s work account in its submission to the Transport and Industrial Relations Select Committee on the Injury Prevention, Rehabilitation, and Compensation Amendment Bill.

CTU President Helen Kelly told the Committee that full-funding was unnecessary and artificially driving levy increases and entitlement cuts. “There seems no logic as to why injuries caused by accident should be funded from the income from an investment fund where other services such as health, superannuation and education are - quite correctly - not,” said Kelly.

“At a time when the Government has stopped its contributions to the Superannuation Fund in the name of stimulating the economy, it is absurd that it is simultaneously counteracting its stimulatory measures by effectively increasing taxation through ACC levies to significantly increase the size of another investment fund.”

The CTU went on to attack the reintroduction of experience rating in the work account: “Employers will seek the benefits of the experience rating systems by encouraging workers not to lodge claims, or to disguise workplace injuries as non-work injuries,” said Kelly. “Any such problems are likely to be exacerbated by the involvement of private insurance companies, who will have even more incentive to engage in aggressive cover and case management practices, in order to keep costs down for their clients.”

“Experience rating is likely to fragment industry-wide injury prevention efforts by rating risk down to the level of individual employers. We believe that a more effective method of improving workplace health and safety is through industry-wide regulation of workplace practices.”

Proposed changes to weekly compensation for ‘non-permanent’ employees were strongly criticised. The changes for ‘non-permanent’ workers would reintroduce a manifestly unfair method of calculating the compensation payable to seasonal or casual workers. The Bill also threatens to deny low paid workers the minimum level of compensation for up to six weeks (instead of two).

Both changes were in breach of ACC’s founding principle of real compensation and discriminated against low paid workers who had most to lose from reductions to their income caused by injury. It would leave many workers being compensated at a level which fell below that of basic benefits.

ENDS

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