Employers surprised by swift ACC action

By RICHARD BRADDELL

WELLINGTON - Labour's intention of rapidly reversing the previous Government's workplace insurance reforms is surprising employers and delighting unions.

"Employers know in their hearts that it's the right thing to do to create a safe work environment but commercially there are a whole lot of other priorities that have to be juggled," Fletcher Challenge's head of risk and insurance, Ian Maynard, said.

His views were echoed by other firms and the Employers Federation which expressed disappointment that privatisation of the ACC employers' account would be reversed.

But the president of the Council of Trade Unions, Ross Wilson, reaffirmed its support for the Government's speed with legislation due to be introduced into Parliament next week.

Mr Wilson said that larger employers were the main supporters and beneficiaries of the reforms introduced by former ACC minister Murray McCully, but while it could be argued that premiums were lower now, the former Government had been warned in a consultant's report that the premiums could rise over the next year or two.

"The current premium levels that we are talking about don't reflect what the market could be," Mr Wilson said.

That was rejected by Alan Bradley, chief executive of Royal & SunAlliance, the underwriting partner in Fusion, the largest private player in the market.

Mr Bradley said Fusion's premiums had been determined on actuarial criteria and discounting for market share had played no part.

Disappointed that the Government had decided to fill its election pledge, Mr Bradley said he had "not one iota" of regret that he had decided to contest the market. His concern was that New Zealand would continue to have the highest accident and death rates in the developed world.

However, insurers were not keen to go head to head with the Government, particularly with the possibility of more profitable superannuation business under other reform proposals.

The "socially responsible" cereal maker, Dick Hubbard, was also concerned about a return to the old regime, claiming savings of $30,000 to $35,000 on the bill for his 120 employees.

Mr Hubbard said his premiums had dropped from 3.5 per cent of earnings to 1 per cent, which was closer to his actual injury costs of about 0.5 per cent.

Rather than being lumped in with an industry as a whole, he was getting premiums that reflected the actual risk of individual workers, with an accountant being levied at a rate that reflected that risk rather than the food industry as a whole.

Mr Maynard said he was surprised the Government was moving so quickly, but acknowledged it needed to get the reform in place in March if it was to become operable at the start of the next financial year starting July 1.

It is thought that draft legislation has already been prepared.

Mr Maynard said that Fletcher Challenge was trying to identify areas where it could influence the reform, and while it had little argument with the principles, it was concerned about the implementation, particularly if the present link between premiums and accidents was lost.

Mr Maynard was also surprised Labour was being so aggressive, given other priorities that would increase costs to the country.

"Taking another one on that's somewhat discretionary," he said, "... isn't a wise move."



By RICHARD BRADDELL


WELLINGTON - Labour's intention of rapidly reversing the previous Government's workplace insurance reforms is surprising employers and delighting unions.

"Employers know in their hearts that it's the right thing to do to create a safe work environment but commercially there are a whole lot of other priorities that have to be juggled," Fletcher Challenge's head of risk and insurance, Ian Maynard, said.

His views were echoed by other firms and the Employers Federation which expressed disappointment that privatisation of the ACC employers' account would be reversed.

But the president of the Council of Trade Unions, Ross Wilson, reaffirmed its support for the Government's speed with legislation due to be introduced into Parliament next week.

Mr Wilson said that larger employers were the main supporters and beneficiaries of the reforms introduced by former ACC minister Murray McCully, but while it could be argued that premiums were lower now, the former Government had been warned in a consultant's report that the premiums could rise over the next year or two.

"The current premium levels that we are talking about don't reflect what the market could be," Mr Wilson said.

That was rejected by Alan Bradley, chief executive of Royal & SunAlliance, the underwriting partner in Fusion, the largest private player in the market.

Mr Bradley said Fusion's premiums had been determined on actuarial criteria and discounting for market share had played no part.

Disappointed that the Government had decided to fill its election pledge, Mr Bradley said he had "not one iota" of regret that he had decided to contest the market. His concern was that New Zealand would continue to have the highest accident and death rates in the developed world.

However, insurers were not keen to go head to head with the Government, particularly with the possibility of more profitable superannuation business under other reform proposals.

The "socially responsible" cereal maker, Dick Hubbard, was also concerned about a return to the old regime, claiming savings of $30,000 to $35,000 on the bill for his 120 employees.

Mr Hubbard said his premiums had dropped from 3.5 per cent of earnings to 1 per cent, which was closer to his actual injury costs of about 0.5 per cent.

Rather than being lumped in with an industry as a whole, he was getting premiums that reflected the actual risk of individual workers, with an accountant being levied at a rate that reflected that risk rather than the food industry as a whole.

Mr Maynard said he was surprised the Government was moving so quickly, but acknowledged it needed to get the reform in place in March if it was to become operable at the start of the next financial year starting July 1.

It is thought that draft legislation has already been prepared.

Mr Maynard said that Fletcher Challenge was trying to identify areas where it could influence the reform, and while it had little argument with the principles, it was concerned about the implementation, particularly if the present link between premiums and accidents was lost.

Mr Maynard was also surprised Labour was being so aggressive, given other priorities that would increase costs to the country.

"Taking another one on that's somewhat discretionary," he said, "... isn't a wise move."