ACC backtracks on insurance levy cuts
The government is considering raising employers’ ACC levies in a move the opposition says is intended to help out private insurers, just months after cutting them.
Former ACC minister Nick Smith confirmed cuts in ACC levies last October for both employers and employees that would save a typical business employing seven people on the average wage around $1120 annually this year in April.
In a twist of events, a Cabinet paper obtained from Mr Smith’s office by ACC claimants’ lobby group the ACC Futures Coalition under the Official Information Act shows he was considering raising those same levies just a month after they were cut.
Under the government’s plan to introduce private sector competition in the Work Account, ACC “would be subject to regulatory safeguards to ensure it sets prices responsibly.”
In order for this to take effect, Mr Smith proposed legislation “requiring ACC to price prudently by incorporating a surplus margin into prices.”
Opponents of the plan to bring into effect private competition for accident insurance argue that ACC provides low cost comprehensive cover partly because it is not requires to pay any tax or turn a profit.
“There’s no question this is about putting a manacle on ACC and giving a leg up to private insurers so they’ve got a better chance of domination the market,” says Labour ACC spokesman Andrew Little.