ACC levies on way down as accidents slide

By JAMES GARDINER

Big cuts in ACC premiums for workers and employers are on the cards after a dramatic fall in accident rates.

Accident Compensation Corporation chief executive Garry Wilson estimates that premium cuts of between 20 and 25 per cent are feasible - along with the return of lump-sum payments abolished in 1992.

On top of that, he believes a further 20 per cent reduction will be possible in 2002, which would mean premiums close to half what they were in 1998.

The Employers Federation has questioned whether premiums should have been reduced by more this year, and spokesman John Pask believed they had been kept artificially high.



Actuaries are going over the numbers and the ACC board meets next week to decide what it will recommend to the Government for the year starting April 1.

It has an $817 million surplus from last year to play with.

Mr Wilson told the Weekend Herald it was "almost inevitable" that the board would want to drop prices and bring back lump sums.

A maximum payout in excess of the old figure of $10,000 for suffering and loss of enjoyment of life was affordable. The maximum for permanent disability would probably be restored to about $100,000.

Following public consultation by ACC, it would be up to the Government to select the figures and decide the eligibility for lump sums.

Mr Wilson said the average premium for employers this year was $1.11 for every $100 of wages paid, down from the $1.22 private insurers charged last year when the previous Government opened up workplace insurance to competition.

That itself was a big improvement on the $1.47 ACC charged the year before.

"We'll come in around 90c to $1 next year," he said.

The earners' premium of $1.20 could be cut to between $1 and $1.10.

Accident rates had dropped 20 per cent over the past three years and the road toll was falling 6 to 7 per cent each year, said Mr Wilson.

"We're just getting a safer society. People are becoming more conscious of injury prevention."

That included employers and sports bodies. Rugby and league accident rates were down 30 to 40 per cent as coaches and administrators took a harder line on dangerous play.

ACC had been able to reduce its so-called "tail" of clients dependent on it for a year or more from 30,000 to 19,000, thanks largely to its ability to buy elective surgery privately rather than put people on public waiting lists.

Mr Pask said he would wait to see the board's recommendations and the Government's intentions for changing ACC law before commenting in detail.

But he believed the falling accident rate might be due in part to the better disciplines imposed on workplaces by the private insurers.