Industries to be rewarded for health and safety improvements

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Industries with improved health and safety records will pay less in ACC levies under changes announced yesterday.

However, reports suggest that some businesses could also see their costs increase.

According to The New Zealand Herald, ACC Minister Nikki Kaye confirmed that as of next year, residual levies will be removed from ACC's work and earners’ accounts.
These levies are paid by businesses and employees for injury cover funded by ACC.

The changes mean that industries which have significantly improved their health and safety record over the past 16 years will pay less.

“This is a significant milestone for the ACC scheme, which means we will now have fairer work levies based on industries with the greatest injury costs paying their true share of those costs,” Kaye explained.

The Accident Compensation (Financial Responsibility and Transparency) Amendment Bill was put before Parliament yesterday for its committee stage.

The legislation – which was put forward this year – will implement an overhauled framework for the setting of ACC levies, which will take effect in 2016/17.

It will see an increase in the Government’s involvement throughout the funding policy-setting process, which will guide ACC’s development of recommended levy rates.

According to Kaye, the changes are intended to reveal “at the outset what the rules of the game are”.

Residual levies were introduced in 1999, with businesses’ individual costs calculated based on the number of injuries that occurred in their industry during the years before the introduction.

The Government reportedly estimated that 53% of businesses will pay lower work levies, while 47% will pay more.

Proposed levy rates for next year will be released by ACC in coming months, and will include proposed levies for various industry groups.

“The ACC board has advised me they intend to propose significant average levy reductions next year, which could mean only 25% of businesses get a work levy increase,” Kaye said.

“Residual levies were always going to be removed, once enough funds were collected to meet ongoing, pre-1999 claims.

“Residual levies were intended to be collected until 2019, so today's decision confirms the improved financial performance of the ACC scheme.”

However, the axing of the levies has been met with backlash from the Council of Trade Unions (CTU), which claims that their removal will damage workers.

Dr Bill Rosenberg, an economist for the CTU, told a Parliamentary select committee in July that the phasing out of residual levies required more consideration.

It was argued that the current scheme is failing to meet the needs of those suffering from occupational illness or injury, and that the removal of residual levies would exacerbate this.

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