Impact Of ACC Competition Positive

The CTU is misleading by stating that the introduction of competition in the provision of workplace accident insurance has not had significant benefits according to New Zealand Employers’ Federation Deputy Chief Executive, Anne Knowles.

Anne Knowles was responding to a press release by the CTU stating that apart from the largest 1% of premium payers, all other employers have faced higher premiums than they would if ACC had retained its monopoly over the provision of accident insurance.

“The CTU seems to be using figures selectively. The figures from the Department of Labour’s Accident Insurance Regulator show that in fact employers employing 680,560 employees (48.3% of the labour market and over 50% of the total liable earnings base) will pay an average premium of 95 cents per $100 of liable earnings, even adjusting premiums rates to account for risk sharing arrangements. This is 26.9% less than the $1.30 the CTU alleges ACC would have charged had it still retained its monopoly structure.

“All the research in New Zealand shows that premiums have declined substantially under a competitive regime, with surveys of employers demonstrating that around 75% of employers had significant reductions under the competitive regime.

“While some premiums have increased, rates now much more closely reflect the real costs of accidents in the workplace. Cross-subsidisation, an undesirable feature of the old monopoly ACC structure, has been largely phased out.

“The incentives on employers to actively manage health and safety in the workplace is being rewarded through lower premiums, which means more money available for investment in capital and employment”, Ms Knowles concluded.

Contact: Anne Knowles, Deputy Chief Executive
Conor English, Manager Corporate Communications
Phone: (04) 499 4111

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