OPPOSITION BACKS A LOSER

"The Opposition has dug a huge hole for itself in vowing to make employers give up the savings they are making with the ACC reforms, New Zealanders give up the benefits to the economy the savings will bring and employees give up the benefits of safer workplaces," the ACC Minister Murray McCully said today.

"Instead of businesses, the economy and workers winning, the Opposition would make them losers by repealing the new Act and refusing to allow competition. That makes the Opposition losers in my book."

The Accident Insurance Act 1998, which allows insurers to compete to provide workplace accident insurance, comes into effect tomorrow, 1 July.

"We know that there are savings in the order of half a billion dollars over the next two years - more than $200 million this year," Mr McCully said.

"Government agencies alone are reporting estimated savings so far of more than $50 million for this year. This is an update on the figures released by the Prime Minister in the House yesterday.

"In addition, employers will benefit next year from a reduction in the residual claims levy, which pays for the tail of past claims, from an average 67 cents per $100 payroll to around 50 cents - a saving to them of more than $70 million. This is because of ACC's success in improving efficiency and managing the tail of claims.

"When comparing the last payment to ACC (the 97/98 year, paid in May 1998) to the premiums paid to private insurers, 40 Government departments report savings this year estimated at $28.9 million, taking into account the "tail".

"This money can be better spent on our schools and health services," Mr McCully said. "Hospitals, for example, are saving $11.5 million. And the Opposition plans to take that away from them by abolishing competition.

"Many of these Government agencies, as with other employers, are making these savings by backing their commitment to health and safety in the workplace by risk sharing. This is a huge incentive to focus on health, safety and rehabilitation.

"Already we have indications from a UMR Insight poll of employers in mid-May that 53% are taking a fresh look at health and safety in their workplace.

"The benefits are not just for the big boys of business - a major broker reports that a sample of 4500 of their small to medium sized employer clients are making savings of 36%.

"The same broker indicates that we have been conservative in anticipating savings to business of $200 million. He is saying the savings could be in the order of $250 - 300 million.

"This is just the beginning. The new regime, which benefits so many working New Zealanders, will bed down further over the next few months providing further gains in terms of incentives for safe workplaces. It defies common sense that the Opposition continues to carp on about repealing this outstandingly successful reform," Mr McCully concluded.