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ACC Select Committee Report A "Quick Read"

1 March 2000


The brevity of the report of the Select Committee on accident insurance is as breathtaking as the detailed recommendations that overwhelmed the committee from more than 1,050 submissions. The select committee report is so cursory that it could almost have been written prior to the submission process, says the Insurance Council.

“Our one point of agreement with Government is that injury prevention and the protection of the health and safety of workers is the priority. Where we disagree is in the method of delivery to ensure that there are incentives that motivate employers and employees”, says Chris Ryan, chief executive.

“This is no more dramatically illustrated than with the risk rating of enterprises. The private market made each individual employer accountable for workplace safety by charging premiums directly related to accident risk and prevention outcomes in the workplace. There is nothing simpler than that.

“The new legislation reintroduces industry rating – that is, everyone’s risk in an industry is averaged out. Good employers subsidise bad employers. But the Select Committee has recognised the principles of individual rating by the inclusion of a scheme which proposes that individual employers’ premiums are adjusted on the basis of the employers’ safety management practices (as yet unspecified). This is a new concept that involves complex assessment of risk measured against international standards. This approach is complex, bureaucratic and relies heavily on employer and worker honesty.

“Employers want a system that is clear, fair and simple. They are going to end up with one that is complex, full of anomalies, difficult to administer, and most importantly very costly. Costs would include such activities as detailed auditing processes. And it will have to be in place in four weeks.

“If the scantness of the report reflects the lack of thinking on key issues then these proposals have got “risky” written all over them. The risk is doubled when combined with the high speed of implementation proposed by Government. In addition, on its own admission, the Government will be introducing legislation into a divisive environment. Such social legislation should be based on a social consensus, not conflict. To be effective it requires the support of employers who have clearly not been listened to.

“Our view is that by changing a system that was working perfectly well with something that has a history of problems, the Government is asking for trouble.

“There was a great deal in the submissions that would assist the Government to get the best result, even from a state monopoly. It is to be hoped that at the very least they will heed that very valuable advice’, says Chris Ryan.

For further information, please contact:
Christopher Ryan, Chief Executive, Tel (04) 472 5230, DDI (04) 495 8001, Hm, (04) 475 9446, Mobile, (025) 441 767

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