Government's ACC increase politically motivated

5 December, 2008

The EPMU is concerned at the National/Act government's apparent plan to rapidly increase ACC levies and believes it is unjustified.

The move would see the ACC earners account, which covers the costs of non-work accidents suffered by wage and salary earners, being shifted to a fully self-funding model and mean higher ACC levies for all workers.

A "fully self-funding" model has been discussed for many years, including when the National Party was last in government and was rejected then as unnecessary. "Fully self-funding" means that not only actual claims are funded through the levy on employees, which is what happens now, but expected claims are funded as well.

The last government decided that funding should move to "fully funding" but should be phased in from 2014 to ease the financial impact on workers.

EPMU national secretary Andrew Little says the new government's decision to increase the levy looks more like it is intended to create dissatisfaction with ACC.

"There is no need to shift the earners account to a self-funding model this quickly and by doing so all National is doing is ensuring working New Zealanders pay more in levies at a time when we are all facing greater hardship."

"The Council of Trade Unions has previously endorsed shifting the fund to self-funding but doing so over a longer period of time to limit the affect of increased levies.

"There is no reason for National to rush this issue through other than to cause distress to workers and dissatisfaction with ACC," says Little, "and we know they are keen to hand over chunks of ACC to private insurance companies."

"Ironically the part of ACC the government are keen to privatise is the work account; the only account that is currently fully self-funding."

The EPMU is currently compiling research into ACC funding and will produce a report on the issue for members in the near future.