ACC mulls job cuts after ‘very clear expectation’ to save 6.5%
Friday, 1 March 2024
ACC, the country’s accident compensation scheme, is mulling cutting jobs as it takes on a 6.5% cost savings target, while acknowledging its rehabilitation scheme is under pressure.
ACC chief executive officer Megan Main sent a letter to staff this week saying it was likely they would need to consider options for decreasing the workforce.
“To achieve the savings we’ve committed to, we need to explore all opportunities,“ Main said.
“Because people are one of our largest investments, this includes looking at options for reducing our headcount.
“No decisions have been made and any options that may affect our people would be subject to a good faith consultation process.”
Contact Anna Whyte: anna.whyte@stuff.co.nz or @AnnaCwhyte
ACC employs more than 4000 people, almost 70% are women.
The initial savings target was 6.5%. While not specifically included in the Government’s cost saving targets, Main said, “there’s a very clear expectation that we’ll make material cost savings”.
“In the short term, our plan is to focus on becoming more efficient by finding opportunities to remove duplication, limit expenditure and stop work that isn’t closely connected to improved outcomes for our clients.”
Public Service Association national secretary Duane Leo said ACC, “the very agency charged with looking after those recovering from injury and getting them back to work and living fulfilling lives, is now going to be shackled by this incoherent cost cutting exercise”.
“We’ve all been supported by ACC at some stage in our lives, so it’s clear we will all be paying a price for this reckless cost cutting plan.”
Leo said it would make rehabilitation outcomes worse.
“ACC itself admits it's under pressure to improve rehabilitation because people are taking longer to recover so how can reducing the head count make things better?“
The letter also included concerns around ACC’s rehabilitation scheme.
“Despite the best efforts of all of us, ACC’s rehabilitation performance continues to be challenging,” Main said.
“Our clients are taking longer to recover, which in turn is placing the scheme under increasing pressure,” she said, adding there was “promise on the horizon”.
ACC Minister Matt Doocey said he had not asked for or made any savings directives to ACC, “other than just what the Minister of Finance has asked around the fiscal sustainability programme”.
“Any government department and any crown entity in the current condition should be looking at efficiency savings. I don't see 6.5% as a minimum. It's for the government departments and crown entities to look at where they can make those efficiency savings.
He said the 6.5% savings needed to be balanced with delivering quality public services.
“It's never been about job cuts. It's been about efficiency savings.
“They're looking at proposals at the moment, that is quite rightly under the fiscal sustainability programme, they should look at efficiency savings.”
“This is not about the front line. This is about back office.“
Labour spokesperson for ACC Rachel Boyack said “cutting the services ACC staff provide could make it harder for people to access entitlements and get the treatment they need to recover from an injury”.
“Right now our ACC system is world class, but staff cuts like those suggested could put New Zealanders at risk of longer-term ill health if it means reduced access to support like in-home care and people having to work before they’re safe and ready to do so.”
ACC CEO Megan Main told The Post it was “too soon to say” how the cost savings would impact their people, “although reducing our overall workforce may be one of the necessary options given that people are one of our largest investments”.
“We have outlined our savings target with our people and we’re committed to being transparent throughout this process. It’s important to note that no decisions have been made and any options that may affect our people would be subject to a good faith consultation process.”
CTU President Richard Wagstaff said the potential cuts demonstrated the “devastating impact of the Minister of Finance’s directive for huge spending cuts across the public service”.
“I am very concerned for the workers at ACC whose jobs are now on the line, my thoughts are with them.”