15 August 2000

The ACC vs private insurers debate – what's missing here?

The question of whether employers paid cheaper accident insurance premiums under private insurers or ACC is back on the boil but according to Accident Insurance Minister Dr Michael Cullen, the debate is unbalanced because it is soley focused on costs – with injured workers missing from the equation.

Responding to questions in the House based on recent media reports of wool scourers facing increased premium costs under ACC, Dr Cullen said ACC had set the premium level based on the high accident levels in the industry.

"The claim information over a five year period from 1994/1995 to 1998/99 suggested that the accident rate for wool scourers was double to three times the New Zealand average.

"As well, under ACC in the past, wool scourers had been in a pricing group with a number of other industries who had significantly lower risks. As a result the group was split and wool scouring is now in a much smaller group with a similar industry – rope, cord and twine manufacturing. The premium set for these two industries has increased to reflect the actual costs of work place injuries", said Dr Cullen.

"I understand that employers want to pay lower premiums and the reality is that around 70 percent of employers are paying less under ACC.

"With 30 percent of employers paying the same or higher premiums it will not be difficult for the media to keep producing disgruntled business people. However, the debate over pricing and premium costs needs to be opened up to include more discussion about workplace safety from employers and employees".

Those companies now facing higher premiums can do their employers and their pockets a favour by making their workplaces safer says Dr Cullen.

ENDS

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