14 February 2001 Media Statement

National to blame over self-employed fiasco – but Cullen keeps open mind

Minister for Accident Insurance Michael Cullen is keeping an open mind over the mess left by the previous National Government which has resulted in up to $100 million in disputed ACC levies - the First and Later Employer Scheme issue.

"I find it a bit rich that Gerry Brownlee is grilling ACC staff in a Select Committee over the transitional arrangements that his own government put in place with the Accident Insurance Act 1998.

"The so called clean slate provisions were included in the National 1998 Act in order to facilitate the privatisation of ACC.

”DOL at the time obtained detailed legal advice from Crown Law about the legal situation so that the first scheme/later scheme provisions simply reflected the legal status quo in dealing with the situation where ACC was no longer to be the insurer.

"The previous National Government allowed only a three month window of opportunity for employers to notify IRD that they needed to apply for a cessation payment from moving from paying ACC in arrears to paying in advance.

"The Select Committee at the time also considered the consequences of these provisions and clearly decided that the risk was manageable," said Dr Cullen

He said he had received consistent advice from both ACC and the Department of Labour that it would be unwise to retrospectively change the law, as it was a one off issue connected directly to the privatisation of ACC and will not arise again.

"But having said that, there is a great deal of money in dispute and my mind remains open. Remedies also exist for some employers through reviews and appeals up to the District Court on a case by case basis. I note that ACC has lost some cases and won others and ACC has a certain amount of discretion in how they chose to interpret the law.

"It was up to employers and their advisors to be aware of their rights at the time. And employers could also explore whether there are legal options available to them if they feel they received inadequate professional advice when they restructured," said Dr Cullen.

ENDS

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