Increases in ACC levies announced yesterday were unfortunate and were proof greater transparency was needed in the way levies were set, Business New Zealand chief executive Phil O'Reilly said.
Taxpayers are now footing the bill for inefficiencies that have crept into the system over the past few years.
It is regrettable that taxpayers and employers must bear the brunt of the additional cost but there are few viable alternatives in the short term.
Business NZ had lobbied for greater transparency in the way ACC levies were set.
Yesterday's announcement reinforced the need for transparency which would have made it possible to predict and manage the situation much earlier than it had been, Mr O'Reilly said.
ACC Minister Nick Smith said the Government had reluctantly decided to increase levies for employers and workers next year, but by less than the amount recommended by officials.
"This has been an extremely difficult decision for the Government to make and our priority has been to minimise the impact of levy increases on households and businesses. The increases are as modest as legally possible," he told a media briefing.
Dr Smith blamed the Labour government for leaving a hole of $4 billion in the ACC accounts.
Dr Smith said that in difficult times the recommended level of increase was unacceptable.
That was why the Government had opted for a lesser rate of $799 a year, or $15.31 a week.
The decision on motor vehicles levies needed to be made by next March and there were options to extend the full funding date beyond 2014 to lessen any increases.
Any changes to the motor vehicle levy would take effect on July 1, next year.
Yesterday's announcement came after the Government approved on December 8 an additional $297 million appropriation to cover the shortfall for the coming financial year for the non-earners account, he said.
A further concern was the projections from officials for substantial increases in the earners account levy in 2013-14.
The increases were unacceptable to the new Government and it would work hard to restrain the costs, he said.
The funding hole will give the Government more excuses to start privatising part of ACC next year, something tried by the last National administration from 1990 and overturned by the last Labour government.
Mr O'Reilly called yesterday for a return of risk or experience rating in ACC which enabled employers' levies to be set according to how well they had done in preventing and managing workplace injuries.
"The last Government got rid of experience rating, effectively requiring good performers to subsidise poorer ones."
It was hoped the new Government would take a microscope to the way levies were calculated and applied, he said.
