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Labour Must Provide Detail on ACC Policy

Media release
Friday 2 July 1999

Employers’ Federation CEO Steve Marshall said today that the Labour Party needs to clarify a number of issues with respect to its ACC policy announcement made yesterday.

“Employers are very keen to see more jobs and more growth. Employers therefore have a strong interest in any issue that impacts on employment. ACC changes certainly come within that category. Yesterday, with the introduction of private sector competition we saw significant change to ACC, which we believe is very positive for both worker safety and more jobs.

Irrespective of politics, employers need to be provided with more specific details on Labour’s policy which seeks not only to reverse that change but to take us much further back towards state intervention and monopoly. Some key issues that employers are concerned about and which need further explanation by Labour include:

The effective neutering of the work capacity test will not help injured employers to be rehabilitated. Employers have been very supportive of work capacity testing seeing it as an incentive to help injured people get back on their feet and into productive employment. Its restricted application would appear to give an incentive to injured employees to remain dependent on compensation when actually that person might be fit to resume work and participate fully in society. Labour needs to explain to employers its rationale behind this policy.

The requirement of a guarantee of job security for injured workers will comprise huge practical problems for employers – particularly the requirement for “large” employers to keep a job open for 12 months. Employers need to know what comprises a “large” employer and an indication of how long a small employer must keep a particular job open.

Labour says it will “address the anomaly between entitlements of people incapacitated by illness compared with those incapacitated by an accident”. If Labour proposes that there should be a payroll tax to cover 80% of wages for all those on extended sick leave, then it must say so.

More…. The introduction of lump sum payments to the extent set out in Labour’s policy could be as high as $400 million dollars according to the Alliance. Employers will need to have it explained as to how the payments are to be assessed and what procedures will be introduced to ensure a lottery mind-set doesn’t develop rather than a focus on rehabilitation.

The removal of the medical fee cap which regulates the amount doctors, physiotherapists and other health providers can charge will be removed by Labour’s policy. Employers will need an explanation as to how such an open cheque book approach is to be monitored and funded.

Labour’s policy to “reinstate cover for stress which follows a traumatic event or which has a significant work component” opens an entirely new area of definition and assessment. Employers need an explanation by Labour as to how this would work in practice and what additional costs such an extension might involve.

Ms Dyson is reported as saying that Labour has costed its proposed policy changes. Employers need to see these costings. They need to know what they will mean for those who have just seen substantial reductions in their total ACC costs. For example what is the expected specific cost of these changes in total on an employer with 10 employees, operating in say the forestry or restaurant sectors? What will be the additional costs, for example, borne by hospitals, which are reported as having saved $11.5 million in charges? Will Labour drop corporate tax rates by 2-3 cents to compensate for the estimated $200-$300 million savings per annum that the current changes have brought? What is the expected impact on business confidence and employers’ willingness to employ more people in light of such uncertainly and expected cost rises.

In the absence of any further specific information employees and employers should be very nervous about what is a very significant policy change proposal.

The Employers’ Federation looks forward to receiving more detailed specific responses from Labour on all the issues raised.


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