Mood of the Boardroom: Business backs ACC reform

Business NZ chief executive Phil O'Reilly. Photo / Mark Mitchell

The Government's plans to end ACC's workplace monopoly - expected to be announced this month - have received the ringing endorsement of small and medium-sized businesses (SMEs).

Three out of four respondents to the New Zealand Herald's Mood of the Boardroom survey, in association with BusinessNZ, favour ACC's work account being reopened to competition.

The move, with the backing of a Government-appointed working party led by former Labour cabinet minister David Caygill, would restore competition to workplace accident insurance that existed briefly in 1999 before being abolished by the incoming Labour Government.

BusinessNZ chief executive Phil O'Reilly said business had been calling for competition in workplace accident insurance for many years. "One of the reasons is that businesses have become stronger at health and safety but their ACC levies haven't changed. As more businesses become familiar with health and safety and accident reduction, they seek a reward for their efforts."

The previous Government had treated ACC as "welfare in drag" rather than an insurance scheme following insurance principles.

Business Roundtable executive director Roger Kerr welcomed business support for workplace accident insurance competition but called for competition across the board. "All ACC's accounts should be open to competition. You want an environment where employers can bundle all sorts of insurance policies."

Respondents to the Mood of the Boardroom survey also supported simplified handling of personal grievances as a means of increasing workplace productivity. Nearly one out of two said reducing the complexity of processes for personal grievances had the potential to increase productivity.

There was less support for extending grievance-free employment periods to all businesses, regardless of size. Just over one in three said extending the right to grievance-free employment periods to firms with more than 20 employees had the potential to increase productivity.

O'Reilly said he was not surprised SMEs did not favour grievance-free employment periods being extended across the board. "They want removal of complexity, which is a way of saying removal of risk. The thing that frightens them is the grievance procedure. It is a bit like a puzzle palace."

He said grievance-procedure law was the top industrial relations issue for most New Zealand businesses.

Employers & Manufacturers (Northern) chief executive Alasdair Thompson said many members wanted the grievance-free employment period extended to all businesses, though it was less applicable to those employing highly educated, skilled workers.

"This is not new. In the private sector the personal-grievance gravy train is something that needs continual reforming."

Kerr said grievance procedures should be a matter of voluntary negotiation between workers and employers. "There is no reason for a distinction between small and large businesses." Employment law impacted heavily on productivity.

"In reality, it is a tax on employers but it gets passed on to workers."

Survey respondents were divided over research and development policies, with a narrow majority happy the Government is doing enough to support R&D by businesses.

The emissions trading scheme, which started today, is not a priority for most companies' medium-term business strategies.

Just 3 per cent of respondents rated participation in the scheme itself as a priority. But 62 per cent are focused on getting their energy use down and nearly one in five of respondents say responding to consumer desires for low-carbon goods and services is a priority.

The survey suggests the weaker New Zealand economy has made it easier for businesses to acquire skilled staff - in contrast with previous Mood of the Boardroom surveys highlighting skills shortages as a major problem.

Six out of 10 survey respondents said it had become easier to find "appropriately skilled employees" than a year ago compared with 40 per cent who said it had become harder.

Industry observers say skilled workers are still in demand and there is a fear New Zealand will be lumped with an inferior workforce.

One survey respondent warned: "If we don't look out we will be flooded by poorly skilled who don't even speak English and who won't assimilate into the workforce." Another noted that it remained difficult for New Zealand to attract workers with highly specialised skills and experience when opportunities appeared more exciting overseas.

And another said poor education and "lack of worth ethic" contributed to New Zealand's skill shortages - issues long raised by employers' lobby groups.

The survey suggests that one of the reasons skills shortages remain has been the reluctance of people to apply for new jobs.

"Good people are being cautious and staying in their jobs," one respondent said.

BusinessNZ's O'Reilly said skilled people were still in demand and their unemployment rate was low compared with the unskilled.

"We have companies that have had skill shortages right throughout the recession, in ICT and some of the technical areas." He predicted the labour market would free up over the next six months or so with the re-emergence of wage competition.

EMA's Alasdair Thompson said skill shortages were becoming an issue again.

"We lose so many of those good, basic skilled people, particularly the vocationally skilled people."