Hon Jenny Shipley, Minister of A.C.C.Accident Insurance
"From April 1998 the ACC premiums that employers pay will be reduced. The only question is how much, the Minister for ACC Jenny Shipley said today in a speech to the Federated Farmers national conference in Wellington.
"ACC is about to begin consulting premium payers on premium rates for next year, as it is obliged to do under the law," Mrs Shipley said.
The proposed reductions are largely the result of the Employers Account, which covers the cost of injuries from work-related accidents, being restored to solvency.
It is to the credit of the ACC Board that from a position three years ago when the account was $200 million in deficit, a combination of premium increases and improved scheme management has seen reserves restored to slightly more than the six months' normal expenditure required by the Government. The reserves surcharge is no longer required and can now be eliminated.
The new premium year will see the Corporation almost complete its objective of moving to a totally risk-based premium-classification system, which places the cost of injuries where the accidents occur.
"Currently, ACC is proposing a reduction of up to 36 per cent in the average premium, from $2.61 to $1.67 per $100 of liable earnings.
"There are two other options also to be considered, which propose reducing premiums in two stages over the next five years.
"All three options are good news for employers and are very pleasing for the Coalition Government. The Government is well aware that the cost of ACC is a significant factor for business, and one of our goals is to see average premiums reduce over the next three years. This is a positive step in that direction.
"For people in agriculture, on current estimates, this could mean a drop in the meat processing industry premium of up to 41 per cent, from $10.02 per $100 of liable earnings to $5.93. The livestock farming premium could drop by 36 per cent, from $2.87 to $1.84, and even the shearing premium could drop slightly, by about one per cent, compared with the previously expected heavy increases.
"Similar falls will occur for other industry groups, which is good news for business."
"I announced yesterday that ACC is also looking at reducing the motor vehicle premium, by 10 per cent. Again, this is a sign that ACC is moving in the right direction.
The earners account is the only account which will require increases which relate to non work related accidents.
"ACC is recommending increasing the earners premium from 70 cents per $100 of liable earnings to 80 cents.
"ACC will be consulting widely on all these proposed changes. ACC then make final recommendations to me as Minister, at which time Government will fully consider them and set the premiums for next year".
"I am pleased that ACC is bringing its costs under control while still delivering the compensation and support that injured New Zealanders have a right to. The corporation is managing the premiums it collects in an effective way, to ensure it has adequate reserves without building up excessive funds," Mrs Shipley said.
"ACC is a large cost to business and this reduction will be welcomed by many".
The Minister concluded by repeating the Coalition Government's position that ACC will not be privatised