Should we change the levy rate for prime contractors?

Classification of prime contractors

There are inconsistencies in how we classify businesses who offer construction services without directly employing trades professionals. These businesses may employ project managers and quantity surveyors but use sub-contractors exclusively for the trades required.

• Building completion services (e.g. plastering or carpentry) and property developers who sub-contract all trades work currently have their own CU and pay a lower levy than their sub-contractors.
• However, prime contractors engaged in building installation (e.g. plumbing or electrical services) or building structure services (e.g. brick laying or roofing) are levied based on the projects they work on, not the work they do, even when they subcontract all trades work.

As an example: a prime contractor specialising in residential construction projects pays a different work levy of $0.44, compared to the subcontracted trades professionals on that job. However, a prime contractor doing similar non-trades tasks but specializing in bricklaying jobs pays the same as a bricklayer i.e. $2.23.

This has led to the prime contractor sector raising concerns about the inconsistency in levy rates within the sector.

What it might mean for you

Under this proposal, approximately 600 employers and individuals would receive lower ACC levies. The new levy rate for prime contractors is proposed to be $0.43 in 2022/23, in line with their recent claims history. 

How it would work

Our proposals would result in the changes shown in the tables below.

Classification units (CU)

Levy risk groups (LRG)