ACC result sees charges set to fall

By Richard Braddell

WELLINGTON - ACC charges may fall as a result of the continued reduction in the corporation's unfunded liability as long-term claimants also drop in number.

Announcing its results for the June 30, 1999 year, ACC's chief executive, Garry Wilson, said a consultation process due for completion with Government this month could produce a 40 per cent reduction on the levy for the residual claims account from an average of 67c per $100 of liable earnings to 39c.

In addition, premiums on the earners' account (employees) could fall an average 21 per cent from $1.40 to $1.10, resulting in an average saving of $105 a year.

ACC says the reduction is possible due to its success in cutting down the unfunded residual liability that arose from the shift from a pay-as-you-go scheme to one that is fully funded.

Compared with a forecast liability of over $10 billion, the unfunded liability was at $6.88 billion due to further falls in the number of long-term claimants over the financial year from 27,910 to 23,037.

Chairman David Caygill ascribed the improvement to stepped up emphasis on the scheme's original precepts of prevention and rehabilitation, rather than just compensation.

While ACC has identified between 5000 and 6000 people who are unlikely to recover from their accidents, it believes the long-term list can be stabilised at somewhere between 10,000 and 15,000.

Initiatives such as sponsoring "booze buses" to cut the cost of road accidents and workplace safety programmes had helped reduce accident claims by 7 per cent in the last year, and 14 per cent over the past two years.

Rehabilitation has improved due to a shift in emphasis towards early treatment.

Meanwhile, ACC managed to reduce operating costs, from $172.5 million to $164.5 million, despite spending more than $4 million on restructuring ahead of its exit from workplace compensation in favour of private providers on June 30.

But in spite of losing most of its employment-related business, ACC is still required to stand in the market for the self-employed. The fact it retained about 96 percent of the market after June 30 is probably because most self-employed earn less than $20,000 and are not worth the private sector's trouble.

While claims experience and operating performance have improved, ACC says customers are happier, with the 77 per cent expressing satisfaction being up from 54 per cent three years ago.