ACC predicts levies won't be as high as feared

By NZPA

Tuesday 11th June 2002

The Accident Compensation Corporation is forecasting stable or slightly lower levies for next year, countering employers' fears of higher ACC costs after the election.

An average employer levy of 85c is likely to be recommended to the ACC Minister later this year -- 5c lower than the present average rate and the same as ACC suggested last year.

The Employers and Manufacturers Association (Northern) had claimed that new lump-sum and other entitlement rules would hit employers.

But Darrin Goulding, ACC general manager of scheme delivery, said the claims of levy rises were wrong.

"Where it has the biggest impact is motor vehicle premiums, where you have really catastrophic claims," he said.

This year's employer levies came into force on April 1. Of 500 work categories, about 220 increased and 280 fell. Many rises were a few cents only. Levies for the year starting April 1 were announced last December, as part of an annual levy-setting process.

The average employer levy was set then at 90c per $100 of payroll.

Mr Goulding said it was "very unlikely" pricing changes would be required for the 2003-2004 year.

"The Employers Account experience is tracking really well with our expectations."

Although ACC recommended an 85c average levy last year, ACC Minister Lianne Dalziel went for 90c.

The Government decided there was a need to give employers some stability in levy rates from year to year, and to build up reserves.

Mr Goulding said: "At the moment our projections for next year are stable -- the same rates. There will be variations among the different groups."

He said injury rates had fallen.

Employers and Manufacturers Association northern branch advisory services manager Peter Tritt said that increases in entitlements would start to flow through into premiums.

"The long-term trend has got to be upwards," he said. "It has to be upwards because of increased entitlements from April 1."

"The whole problem with a scheme like this is that employers have no choice but to be paying the average premium for their sector regardless of their own safety record," Mr Tritt said.

"When you are paying for your own insurance, you pay exactly what your own risk is."

But Mr Goulding pointed to the success of ACC's partnership plan with nearly 1300 companies that employ a quarter of New Zealand's workers.

Under the scheme, which aims to cut the accident rate, employers get levy discount plans ranging from 29 per cent to about 90 per cent.

Employers had to meet strict criteria, but the results were proving worthwhile for them, he said.

Mr Goulding said feedback from ACC roadshows around the country had shown employers that were comfortable with the levies.

"I think they are very comfortable with the fact that we've maintained the average at the same levy and we have absorbed the anticipated increase in new benefits."

He said that later this year ACC would try more consultation with businesses about future levy rates.

ACC would talk individually with large employers and get the major stakeholder groups, such as Federated Farmers and Business NZ, together in Wellington.

"We will also advertise in all the papers and make sure all the documents are available."

He said premiums in New Zealand were already much lower than in other countries.

"In New South Wales you are paying $2.80 and they collect from a similar-sized workforce $2 billion or $3 billion a year."

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