Other than the estimates made in the previous section, a realistic estimate of the percentage of the overall OHS burden from small businesses in New Zealand has never been made. Such an estimate is very difficult to determine because of a lack of suitable data. Thus, in the present study, information that could help provide some indication of the percentage burden of OHS for small businesses in New Zealand was sought from Statistics New Zealand, the Department of Labour and ACC. It was also sought from WorkSafe Victoria, Australia, as it was thought that the latter may have recently undertaken work of this nature that could be used in an indicative manner.
Statistics New Zealand reported that it used ACC data, so was unable to help further (personal communication, I. Jaegers, 9 July 2008). The Department of Labour did not provide any data, but two of its recent reports61,62 have been used in the present technical report as described above. WorkSafe Victoria provided references for the overall economic burden of workplace injury and illness in Australian states66–68 and for Northern Ireland69 but indicated that it had not previously estimated the small business share of the burden and was not aware of any studies that had (personal communication, K. Jones, 16 July 2008).
ACC provided data for the years 2002–08 (see Appendix B) that have allowed an estimation of the percent economic burden for small businesses (in relation to large businesses). Business size was estimated from liable earnings and estimated employee count (based on total
company wages and salaries divided by the average annual wage rate). Small business data included self-employed businesses. The data were for net standard levies (estimated from wages/salaries multiplied by the employer count, in each levy year, less workplace safety discounts) and ultimate claim costs (the expected lifetime claim cost, for claims incurred in each levy year, inflated and discounted to present value). This approach is limited as it is only an industry average of liable earnings.
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For 2008 (see Table 10), small businesses accounted for 49.5 percent of ACC’s net standard levy and 50.3 percent of ultimate claim costs, and for 99 percent of total employers but a lower proportion (41.3 percent) of employees. Thus, the net standard levy and ultimate claim cost per employee in small businesses (58 percent and 59 percent respectively) were much greater than they were per employer (1 percent for both net levy and ultimate cost). The findings were similar for 2002–07 (see Appendix B).
OCCUPATIONAL HEALTH AND SAFETY IN SMALL BUSINESSES. NOHSAC TECHNICAL REPORT 12 37 ACC data for
2008, as at 31 March Self-employed and small employers Total (%)
Large employers Total (%) Total Number of employers 984,912 99.0 9,806 1.0 994,718 Employees (estimate) 898,094 41.3 1,275,870 58.7 2,173,964 Wages/salaries $29,935,739,571 36.9 $51,192,893,857 64.1 $81,128,633,428 Net standard levy $327,468,817 49.5 $334,249,872 50.5 $661,718,689 Ultimate claim cost $264,336,120 50.3 $260,855,682 49.7 $525,191,803
Table 10. ACC data for 2008, as at 31 March, for number of employers and employees, wages/salaries, net standard levy and ultimate claims costs for small (including self-
employed) and large employers
Note: The original data supplied by ACC included small employers and self-employed separately. With concurrence from ACC, they have been presented as summed data in this table. Since ACC do not collect data on the number of employees per employer, employer size was estimated from liable earnings and estimated employee count (based on total company wages and salaries divided by the average annual wage rate).
Application of this relative burden (50.3 percent) to the full economic cost burden estimated by Pezzullo and Crook2 would provide an estimated relative economic burden for small businesses of $10.5 billion per annum. In view of the lack of suitable data in New Zealand, this is our current ‘best estimate’ of the economic burden on OHS in small businesses. In order to be able to be better able to calculate the relative economic burden attributable to small businesses, ACC should develop a mechanism to identify small businesses based on employee count/number of full-time equivalent staff.
3.4 Summary
The average cost per case of six illustrative small business cases in a report by the Department of Labour was $66,449.61 An estimate of the relative economic burden for small businesses may be derived by calculating the fraction of the overall economic cost estimates of Pezzullo and Crook2 ($20.9 billion) as a percentage of the total number of employees in small businesses with an employee count of 20 or less (32 percent). This would give a very crude estimate of the relative economic burden for small businesses in New Zealand of $6.7 billion. Government agencies do not routinely collect data on the number of people in a business, but ACC estimates business size from liable earnings and estimated employee count (based on total company wages and salaries divided by the average annual wage rate). Using this approach, ACC data for 2008 suggest that small businesses account for about 50 percent of their levies ($3.3 billion per annum) and ultimate claim costs ($2.6 billion per annum). Application of this relative burden (50.3 percent) to the full economic cost burden estimated by Pezzullo and Crook2 would provide an estimated relative economic burden for small businesses of $10.5 billion per annum. In view of the lack of suitable data in New Zealand, this is our current ‘best estimate’ of the economic burden on OHS in small businesses. In order to be able to be better able to calculate the relative economic burden attributable to small businesses, ACC should develop a mechanism to identify small businesses based on
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employee count/number of full-time equivalent staff. In summary, the relative national economic burden of OHS for small businesses in New Zealand is unknown. Moreover, it is very difficult to determine because of a lack of suitable data.
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