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Proposed employer premiums higher than they should

Media release 24 August 2001

Proposed employer premiums higher than they should be


ACC proposals for employer premiums for next year are an improvement on current premiums but are still higher than necessary, says Business New Zealand.

Business New Zealand Chief Executive Simon Carlaw says ACC estimated costs for this year's employers' account to be 67 cents per $100 of payroll, yet chose to set the levy at 85 cents, retaining a 'prudential margin' over and above costs, at employers' expense.

"Now ACC says it will drop premiums from 85 to 76 cents - but with costs now likely to be below 67 cents given that workplace injuries are down, that still leaves a fat margin.

"The 'prudential margin' is not needed to act as a buffer against any unforeseen cost increase because ACC is a state monopoly with the power to tax employers in such an event.

"Having such a margin reduces transparency and reduces ACC's incentives to minimise costs. ACC should get rid of the margin and stop over-charging employe rs," Mr Carlaw said.

ENDS

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