Get the Answers: ACC changes mean unequal levies

Safety management is more than just 'bean counting', says Dr Paul Reyneke managing director of Adapto, provider of workplace safety programmes.

The way ACC levies are structured for businesses and their sectors has changed substantially this year.
For some it will be good news, for others their rates will rise. In small companies, when it comes to safety issues, there can be a "it is common sense" or the "harden-up mate" approach. All companies should make sure they are on top of the new structure and not get any nasty surprises.

What are the main changes in the ACC regime for the workplace of which businesses should take note? Is it just about workplace injuries?

In the past all businesses in a particular industry risk group paid the same ACC levies, irrespective of the number of accidents they suffered.

This changed this year and companies now pay a loading (an increase) or receive a discount on their ACC levy rate depending on the frequency and severity of the work-related accidents in the previous three years. The loadings and discounts are fiscally neutral: it charges Peter to pay Paul, giving Paul a competitive advantage over rivals.

Safety management is more than just 'bean counting', says Dr Paul Reyneke managing director of Adapto, provider of workplace safety programmes.

The way ACC levies are structured for businesses and their sectors has changed substantially this year.
For some it will be good news, for others their rates will rise. In small companies, when it comes to safety issues, there can be a "it is common sense" or the "harden-up mate" approach. All companies should make sure they are on top of the new structure and not get any nasty surprises.

What are the main changes in the ACC regime for the workplace of which businesses should take note? Is it just about workplace injuries?

In the past all businesses in a particular industry risk group paid the same ACC levies, irrespective of the number of accidents they suffered.

This changed this year and companies now pay a loading (an increase) or receive a discount on their ACC levy rate depending on the frequency and severity of the work-related accidents in the previous three years. The loadings and discounts are fiscally neutral: it charges Peter to pay Paul, giving Paul a competitive advantage over rivals.

This only applies to work-related injuries and not injuries sustained away from work.

How can businesses make their workplaces safer?

Unfortunately, the ways of our past did not always serve us well. Many companies had no idea if they had many or few workplace accidents relative to their peer group; comparative information was not available to them. It's like running a 100-metre race not knowing how fast the competition goes.

The only way organisations could measure themselves was by completing ACC's safety audit called WSMP; a high pass mark supposedly meant they were following "best practices". Now, unfortunately, many employers realise they receive loadings for higher accident rates than their peers, irrespective of if they passed the audit or not. A company can simultaneously receive an audit discount of up to 20 per cent for being a "good performer" and an accident rate loading of up to 50 per cent for being a "bad performer".
Another unintentional consequence of our past is related to ACC's "free" injury prevention services to companies paid indirectly in levies. The problem is ACC can provide only general advice, they do not have the resources to really make a difference.

This advice is often interpreted by companies as sufficient and only the barest minimum is done.
Safety management is a specialised function and, like financial management, it involves more than "bean counting" and legal compliance. Companies can save thousands of dollars, but not by simply repeating the same things that made no difference in the past. The solution is often not to make more rules or to blame and punish people; we need to assist them to do their jobs properly in the first place.

The good thing is, when people stop doing the unsafe things they also stop damaging machinery, they deliver better quality and they reduce scrap; they are simply more productive.

Are the ACC changes just a concern for construction businesses and other blue-collar industries? What should white-collar businesses be aware of?

Health and safety is about injuries to staff and the risk profile of an organisation determines the importance of this function. Organisations in agriculture, construction, forestry and road transport, to name a few, carry higher safety risks than banks and law firms.

This is reflected in their ACC levies. For example, a professional rugby franchise pays $9.01/$100 payroll, a residential builder $3.04 and a forestry company $5.30. Compare this with a bank at $0.11 and a law firm at $0.05/$100 payroll.

By Gill South
Source NZ Herald 5/09/2011
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10749408