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Big employers to be stung by massive ACC increases

Media statement Monday, September 25th, 2006

Large employers to be stung by massive ACC increases

Large employers are each facing cost increases ranging from $200,000 to $1.4 million as a result of changes being proposed by ACC to its Partnership Programme.

While ACC says the price increases proposed for next year will average out the same as for this year at $1.21 per $100 of payroll, the Employers & Manufacturers Association (Northern) says the devil in the detail will see large businesses paying out far more.

"ACC is proposing to increase its administration fees for managing the Partnership Programme from 1.5 to 4.8 per cent per $100 of payroll," said Paul Jarvie, EMA's Manager of Workplace Safety.

"This tripling of fees will generate $6.5 million and now cost each of the 186 companies in the scheme an average of $35,000 a year.

"Business is being asked to pay without any explanation of the actual costs involved; $6.5 million equates to 54 senior managers on $120,000 a year or 135 admin staff on $35,000.

"In addition, whereas the overall levy rate is going down by 19 cents per $100 of payroll, which won't benefit some businesses in the Programme, the cost of residual claims (the 'tail') is going up by 19 cents which they will all have to meet.

"It's a double whammy.

"Pushing up the costs of residual claims by 19 per cent is far too much in the one year.

"No one understands why current employers are paying for injuries that occurred many years ago due to no fault of theirs, or why a new employer with all new staff should pay for events that occurred well before they were in business.

"Employers in the Partnership Programme provide a service for thousands of employees which is second to none yet they are required to pay for claims that were in the main not of their making.

"The extra costs proposed could push some out of the Programme to the detriment of their employees and with the added costs falling on ACC.

"On top of the changes, a Ministerial report yet to be tabled recommends extending the ACC scheme to include other disabilities and stress related health conditions. If accepted, the report's recommendations would blow ACC apart."

ENDS

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