CEO comment employment costs and employers

Peter Townsend
Canterbury Employers’ Chamber of Commerce
November 19/2003     Two issues right on the top of the agenda for the new coalition government are the renationlisation of ACC and the introduction of paid parental leave.
Labour is offering six weeks of tax payer funded leave, which will be subject to lobbying from both the Alliance and the Greens.

The Canterbury Employers’ Chamber of Commerce position on paid parental leave is that if society demands it then it should be funded by the taxpayer. It makes no sense simply to impose another levy on employers and the Chamber is pleased that Labour is committed to funding parental leave from general tax. We hope that in the context of the coalition this line can be held.

We also note that Labour has promised no increases in company tax on the pledge card, which is Helen Clark’s and the Labour Party’s commitment to the electorate. This means that there will need to be a reallocation of tax revenue to cover parental leave not an increase in taxes or either the corporate or personal sector.

The other issue which employers are struggling with at the moment is ACC. Labour has pledged to renationalise ACC. From a commercial perspective this does not make sense. The interesting issue with ACC is that under present settings there appear to be no apparent beneficiaries from a renationalisation from ACC. Employers have every prospect of suffering increased levies, the insurance companies will lose, there will be additional costs to be covered by government and importantly the linkage between safety at work and the level of levies paid will be diluted. When ACC was privatised Labour made the claim that their rates were low because the insurance companies were taking a loss leading position and deliberately putting rates below where they should be. We now hear claims that under a renationalised ACC scheme Labour indicates we will pay no more than we are currently paying. They can’t have it both ways.

The Employers’ Chamber firmly believes that ACC should remain in the private sector for all of the right reasons and we are yet to be convinced that anything other than political ideology is driving the renationlisation of ACC. If the privatisation of ACC is demonstrated over time not to work then why would we agree to considering the renationalisation of Accident Compensation. What we can’t understand is if its not broken now why try to fix it?

Peter Townsend
Chief Executive

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