ACC Annual Report
Chairman’s Statement
2002
Last year was one of fresh starts from founding principles. ACC’s challenge has been to fulfil the Government’s desire to expand the benefits and scope of the original ACC scheme as set out in the Injury Prevention, Rehabilitation and Compensation Act 2001, while ensuring its smooth operational implementation.
The new Act is a significant piece of work affecting every staff member and every facet of the way ACC conducts its business. More than 250 people were directly involved in the legislative programme and almost half of ACC’s staff were involved in analysis and implementation of the changes which were planned and managed in considerable detail. The achievements included:
• training sessions delivered to 1,126 people
• review, modification and creation of 600 letters, 260 forms and 50 fact sheets
• 107 independent assessors trained, seven of whom were new to ACC — for the return of lump sums
• around 6000 pages of intranet documentation for staff — new or substantially modified
• 107 operational policy issues decided, with 90 policy papers written and approved
• nine sets of new regulations — completed and passed within the 28 day rule.
Under Garry Wilson’s leadership, ACC staff undertook this major change management project with enthusiasm and effort for which I congratulate and applaud them.
It was disappointing that we will be unable to hold all levies at last year’s levels, particularly in the Self-Employed and Motor Vehicle Accounts. The levy increases were due directly to cost increases in the seriousness and duration of injuries for several groups, especially farmers among the self-employed, and motorcyclists. Changes in the range and scope of entitlements incorporated within the new Act also contributed to the increases.
On the other hand, we were able to hold levy rates for employers at $0.90c per $100 of payroll again for a further year. It may be instructive to point out that under the private market, employers paid an average of $1.20 to $1.25. When ACC re-entered the employer market in 2000 we offered a reduced average rate of $1.11, dropping it further 12 months ago to $0.90 per $100 of wages. Holding the rate at $0.90 two years running is a tribute to the Corporation, and good news for employers. New Zealand businesses will be more than $200 million better off than they were when the private sector was providing workers’ compensation and $876 million better off than they would be across the Tasman, where the average corporate rate is NZ$2.42.
Lower levy rates are a direct result of ACC’s drive to improve rehabilitation, and to shorten the time claimants require ACC services and compensation. ACC’s claims liability this year was $7.5 billion, down from $8.3 billion five years ago. The unfunded liability is now $3.6 billion compared with $6.8 billion five years ago. Further progress was also made in reducing the number of long-term claimants. At year’s end, 14,518 claimants had been in receipt of weekly compensation for more than 12 months, down from 16,373 a year ago and exactly half of the 28,926 five years ago.
These improvements are a great achievement. They reflect a variety of ACC success stories, from good cost-control to stronger injury prevention and rehabilitation programmes, more intensive case management, and robust contracting of health provider services.
Recent experience in Australia, with the collapse of HIH and its major medical insurer, has shown the clear comparative advantage we in New Zealand enjoy, with our workers’ compensation, public liability, medical and personal injury and motor vehicle insurance all provided effectively and cheaply by a government-backed organisation run on a sound commercial basis.
I would like to thank the Corporation’s staff, management and Board members for their part in the progress we have made over the past 12 months. Our task will be to continue to achieve improvements in ACC’s performance in the future.
David Caygill
Chairman