‘Glimmer of hope’ in A.C.C. levy rises

Press, 16 September 1987, Page 8

‘Glimmer of hope’ in A.C.C. levy rises

By

PETER LUKE

Political reporter

Employers and the selfemployed face the prospect of accident compensation levy increases of 20 to 30 per cent next year, but have been given a glimmer of hope by the Law Commission.

The suggested increase, which has been condemned by the Employers Federation, came yesterday in the A.C.C. Ministerial briefing paper. “Levy rates for the earners’ account will be set in November and could mean further increases of between 20 per cent and 30 per cent.”

The A.C.C. said that with the present pay-as-you-go system, technical reserves had been removed, and levies directly reflected the scheme’s expenditure. The corporate affairs manager for the A.C.C.,

Mr Barry Davis, said the A.C.C. had estimated that expenditure would broadly increase by the suggested levy rise level in the 1988-89 year. The A.C.C. expects to spend $535 million from the earners’ account in the present year. The suggested increase follows the tripling of the earners’ levy for the 198788 year — from 77 cents to $2.25 per $lOO of pay roll. That increase provoked the threat of a levy revolt from some employers. More recently the A.C.C. has increased the prime rate for motor vehicles from $43.10 to $lOO. But yesterday also brought the hope of a last minute reprieve from another earners’ increase.

The Law Commission, which is reviewing A.C.C., has effectively taken urgency on the levy issue. In a report released yes-

terday it called for comments on the levy system by October 8. It made it clear that its tight deadline of just over three weeks was to allow changes to be made to the levy system before the 1988-89 employer and self-employed levies were finalised. Submissions on other aspects of A.C.C., including benefits, have a longer deadline.

In its report the Law Commission raised the possibility of amending legislation being passed in time to catch the 1988-89 levies. Levy increases proposed by the A.C.C. must be approved by the Government, and last year the approved levy rates were announced shortly before Christmas. “In this situation we must move quickly in relation to' these money issues If the inquiry is to be of any assistance by

December 1987,” the commission said.

It put forward two suggestions for consideration — that employers and the self-emloyed might have a levy calculated at a single rate; and that levies could be paid by instalment. The Employers’ Federation indicated yesterday that it opposed levy instalments because of the costs and difficulties in paying them. The federation’s research director, Mr Bill Poole, said, however, that the single levy for employers and selfemployed in the same industries made sense.

To meet this year’s increase, some employers had to retrench by not replacing workers who left. Increases at the suggested rate in 1988-89 would also have “real economic repercussions,” he said.