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ACC Levies Out Of Whack: Business Update

Friday 4 Nov, issue 126

ACC LEVIES OUT OF WHACK ACC wants to keep employer levies at current levels next year, to hold prudential reserves and get ‘future levy stability’. But Business NZ’s Phil O’Reilly says that’s overcharging and the reserve, now over $400 million, is higher than needed to smooth premiums over time. “That $400 million is employers’ money. ACC should give it back. Premiums are being smoothed so much they no longer provide price signals. The whole reason for the fully funded model is so premiums reflect the cost of accidents, creating incentives for safer workplaces. The lack of transparency is unfortunate, since the employers and self-employed accounts may in future be merged - the grossly over-funded employers account could become a cash cow for an underfunded self-employed account, damaging the incentives for safe workplaces in both accounts. Another possibility is that the Government could decide to extend the scope of the ACC scheme and use the employers reserves to do so, without it being transparent,” O’Reilly said. Business NZ’s submission to ACC is on

EMPLOYEE RIGHTS DEFENDED Business NZ stood up for employee rights and won the agreement of the Employment Court in a recent case PSA v Southland Regional Council. The Southland Regional Council had failed to pass on their employee’s details to the union because they didn’t have the employee’s consent (the Employment Relations Act says an employer must notify the relevant union when a new employee starts work, with the employee’s consent). The PSA argued that if a person enters into employment under a collective agreement that specifies union notification, then that implies their consent. The Court’s ruling agreed with Business NZ’s argument that unless the employee agrees, the employer does not have to notify the union, even if the relevant collective agreement stipulates notification.

NO TAKERS ON DISCRIMINATION Union attempts to stir up resentment among women employees fizzled last month. A Statistics NZ survey showing NZ women earn 82% of what NZ men earn saw the CTU calling for pay equity enforcements to fix the ‘obvious’ gender discrimination (though the pay gap stems from freely-made choices - if more women pursued high-paying career choices and if more men took the option of time off for child-rearing, the gap wouldn’t exist). TV1 was set to cover the issue but decided against it when it couldn’t find any women who thought their pay was the result of gender discrimination.

AUSSIE EMPLOYMENT LAW CHANGE Australia’s new industrial relations law is being debated in Parliament now. The WorkChoices bill (likely to pass, as the Howard govt has the numbers) will:
- centralise and simplify employment systems currently operated at state level
- encourage individual contracts
- protect firms with less than 100 staff from ‘unfair dismissal’ snares
- protect new projects and industries from industrial action for 5 years (‘greenfields agreements’)

The WorkChoices bill is part of a suite of new laws aimed at encouraging productivity, self-reliance and individual effort. A bill to help Australians to move from welfare to work will be introduced next week. A bill to encourage employees to become contractors will be introduced next year. Increased productivity by Australia could make it harder for NZ to compete for skilled workers and investment.

AUSSIE BUILDERS WON’T HIRE APPRENTICES Six out of 10 Australian builders and building contractors won’t employ apprentices, according to a survey by the Australian Housing Industry Association. They’d rather use subcontractors, saying apprentices lack work ethics and apprenticeships bring burdensome paperwork. Reasons behind the trend include school curriculums not focused on job needs and vocational training systems that won’t let building skills like paving or water-proofing be transferred to broader trade qualifications. 55% of Australian apprentices don’t complete their courses. NZ’s apprentice and vocational training systems are better – our framework

allows transferability of skills between qualifications, and the Modern Apprenticeships scheme offers coordinators to do some of the paperwork for employers.

MORE DRUG TESTING The number of companies using drug testing has doubled in the last two years, says Environmental Science & Research. ESR carried out 24,000 workplace drug tests last year, mostly pre-employment screening tests. Of those tested after workplace accidents, 18% tested positive. Cannabis made up 73% of all positive tests, with amphetamine results increasing.

POLITICAL PROSPECTS Business will feel the impact of the new coalition Government negatively in policy reform, and positively in productivity and trade. Reform: Coalition parties’ differing agendas means it’s unlikely that any party will get enough support to improve business-related law. Unfortunately they may agree to regulate for greater interference in business decision-making: compulsory ‘product stewardship’ (recycling), enforced unbundling of telecommunications assets, more power to energy regulators, enforced public access to private property etc. Productivity: Labour has signalled it will continue to promote productivity improvement, and is likely to be supported in this by coalition partners. Growth in recent years has been on the back of improved utilisation of labour resources and running down of excess capacity in roading, electricity etc: the focus on productivity gains will be timely as we enter a period of resource shortages. Trade: Jim Sutton’s support for trade liberalisation will be continued on Phil Goff’s watch; other than the US/nuclear sticking point, more bilateral deals can be expected, along with support for progress in WTO’s multilateral agenda.

BETTER BY DESIGN Alexander von Vegesack of Switzerland’s Vitra Design Museum will lead workshops in Wgtn (14 Nov), Chch (15 Nov) and Auck (16 Nov) aimed at bringing together people from business and design communities to create ‘design clusters’. Business NZ strongly supports the move to increased competitiveness through better design. Contact:

ELECTRICITY PRICE RISK A workshop will be held Wgtn 16 Nov on managing risk related to electricity supply, physical and financial risk, hedging, electricity swaps and options, carbon taxes and Negotiated Greenhouse Agreements. Contact:

FIRE PROTECTION A workshop will be held Auck 9 Nov on fire protection in food manufacturing and cool storage facilities (especially with expanded polystyrene sandwich (EPS) panelling), best practice in risk prevention, hot work controls and sprinkler system design. Contact: Fire protection seminar


- September’s big trade deficit follows hard on the largest ever monthly trade deficit in August.

- The provisional value of exports for Sept 2005 was $2.3b (up 8.8% from Sept 2004). The provisional value of imports for Sept 2005 was $3.3b (up 5.4% from Sept 2003), bringing a trade deficit of $992m, or 42.3% of exports, one of the highest ever Sept deficits.

- Comparing Sept 2005 with Sept 2004, imports increased for 21 of the top 25 countries NZ receives imports from, but exports increased for only 12 of the top 20 countries NZ exports to.

- Over the Sept 2005 year the value of imports was $36.5b, 7.1% up on 2004, while the value of exports was $30.8b up 2.4% on 2004 - a deficit of $5.8b (18.8% of exports).

- Annual arrival figures have levelled off at 80,000, while departure figures are still going up.

- There was a net migration gain of 6,400 for the Sept 2005 year, down 64% from 17,800 in the Sept 2004 year, and down 84% from 40,400 in the Sept 2003 year.

- Asian immigration has plummeted - comparing the Sept 2005 year with the Sept 2004 year; immigration from China was down 37%, from India down 22%, and from Korea down 22%.

- Submission on ACC levies
- Submission on taxation of investment
- Submission on the minimum wage
- Business planning forecast September quarter
- Check out Business NZ’s new website design!


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