ACC increases unfortunate

The government's announcement today of increases to ACC levies are unfortunate says Business NZ Chief Executive Phil O'Reilly.

Employees will pay extra 0.3 cents on every dollar earned.

Employers will pay an extra 0.5 cents on every dollar of payroll.

“Taxpayers are now footing the bill for inefficiencies that have crept into the system over the past few years. It is regrettable that taxpayers and employers must bear the brunt of the additional cost, but there are few viable alternatives in the short term.

“The government inherited a $2.3 billion deficit across the ACC system when it took power, including $1.3 billion over three years in the non-earners account.

"The last government's chickens are coming to roost on the new government's perch. For instance, many times in the past few years Business NZ expressed concerns that overfunding in the Employer's Account was being used to disguise the true cost of ACC.

"Business NZ has consistently lobbied for greater transparency in the way ACC levies are set. Today's announcement simply reinforces the need for transparency, which would have made it possible to predict and manage this situation much earlier than it has been.

"But it is still better to tackle the issue now than to leave it to grow.”

Mr O'Reilly said it was also timely to call for further changes to the scheme, in particular a return of risk or experience rating which enables employers’ levies to be set according to how well they have done in preventing and managing workplace injuries.

"The last government got rid of experience rating, effectively requiring good performers to subsidise poorer ones.

"Since the new government is obviously prepared to take the bull by the horns we hope it will also take a microscope to the way levies are calculated and applied.”