ACC warns about proposed health and safety law change

Wednesday, 7 May 2025

ACC voiced concern about the Government’s proposal to exclude small firms from the need to comply with some health and safety rules, warning it could push up insurance costs, a document shows.

Workplace Relations and Safety Minister Brooke van Velden said on March 31 that many small businesses would only need to manage “critical risks” and provide basic facilities to ensure worker welfare.

Van Velden suggested at the time the change could improve health and safety by reducing red tape and helping firms focus on serious risks, rather than ‘ticking boxes’.

But ACC advised the Ministry of Business, Innovation and Employment (MBIE) three weeks earlier that it had concerns about the proposal.

Small businesses accounted for ¾ of work-injury costs and about half of ACC’s costs were accounted for by “lower grade injuries” such as slips and trips, it told the ministry.

ACC said it was not clear how the proposals would lead to a reduction in injuries and a Cabinet paper should not make the planned claim they would reduce ACC levies.

Nor did ACC agree existing health and safety settings were creating a culture of risk aversion.

“This is clear from New Zealand’s poor work health and safety performance relative to Australian jurisdictions and other comparable territories,” it said.

Instead, an increased focus on critical risks “to the detriment of more frequent but less severe injuries” could have an adverse impact on accident compensation costs, it made clear.

ACC already appears underfunded after reporting in October that it had a $7.2 billion deficit in its ability to meet the future cost of current injury claims.

The insurer noted “psychosocial harm” had been described in a draft Cabinet paper as a less critical risk, but said evidence showed that was one of the most common factors behind musculoskeletal injuries.

Psychosocial harms include stress, anxiety and depression.

“Excluding this from the business health and safety responsibilities may hinder efforts to minimise a key driver of injury,” ACC advised.

Mike Cosman, spokesperson for the Institute of Safety Management, which represents people working in the health and safety industry, said it was “very positive to see an agency pushing back on proposals that don't actually improve health and safety”.

ACC’s thinking was more ‘joined up’ than an approach that started with, “how do we reduce cost to industry”, he said.

But it appeared ACC’s concerns had not been acted on, he said.

It was unfortunate that the minister responsible for health and safety was not also the minister responsible for ACC, as had sometimes been the case in the past, he said.

ACC was also right to raise issues with another change proposed by van Velden that would mean businesses will automatically be deemed to be compliant with health and safety rules if they adhere to an “approved code of practice” (Acop) for their sector or industry, Cosman said.

“No legislative instrument or Acop can fully capture the unique risks each business faces, and it is reasonable to expect businesses to exercise judgement about whether their business involves other risks they need to manage,” ACC advised.

Responding to ACC’s comments, van Velden said refocusing health and safety on “critical risk” would reduce the incidence of serious workplace injuries and fatalities “reducing the costs of these incidents for ACC”.

“I heard from business owners and workers consistently that they don’t know what they need to do to manage risks and meet their legal duties.

“This uncertainty has led to over-compliance and a focus on paperwork instead of actions, which leads to higher costs … and lower productivity for businesses,” she said.

Further work would be undertaken to define ‘critical risk’ and consider whether the thresholds for what are considered serious injury and illness are set at the right level, she said.