The Government’s setting of ACC premiums higher than needed to cover workplace accident costs demonstrates already the manipulation its scheme is prone to, the Employers and Manufacturers Association says.

“By telling the ACC to set the new premium rate at $1.16 per $100 on average, or 9.4 per cent higher than the $1.06 that ACC said it could do the job, the Government is extracting an element of payroll tax and should be honest enough to call it that, “ said Alasdair Thompson, EMA’s Chief Executive.

“The tax is also inflationary as organisations will seek to recover it by raising prices and charges.

“Though the Government would argue it is being prudent by building a buffer of this type into its costs, by doing so it shows it is in agreement with the NZ Institute of Economic Research report which earlier questioned the accuracy of ACC’s own figures.

“Furthermore, our information from private insurers is that employers have been so successful in lowering their accident and improving rehabilitation performance that private insurers had indicated they would be lowering their premiums by 10 to 15 percent, to between $1.02 and 1.08 per $100 of premium, and even more in some cases.

“Neither can ACC claim the success as theirs in managing down the ‘tail’. Without constant pressure from employers, the ACC would still not have addressed the issue; reducing the tail to 40 cents per $100 down from 67 cents is only a start.

“However we foresee the day when the figure will rise again as the ACC’s record in managing rorts has been not been good.”

Further Comment: Alasdair Thompson tel 09 367 0911 (bus)
09 303 3951 (hme)
025 982 024 (mob)

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