New ACC levies provide ongoing stability

18 December 2002 Media Statement

New ACC levies provide ongoing stability

Average composite ACC levies for employers, self-employed and earners will remain the same or decrease for 2003/2004, ACC Minister Ruth Dyson said today.

Announcing the 2003/2004 levies, Ms Dyson said the average composite employers’ levy would decrease from $1.25 to $1.21 per $100 payroll, while the average composite self-employed and earners’ levies would remain at $3.30 and $1.20 respectively, per $100 liable earnings.

“The new levies will provide ongoing stability for businesses so that they can plan ahead with certainty. At the same time, they will enable ACC to carry on with its strong injury prevention focus, and provision of effective rehabilitation and fair compensation for people who are injured.”

Ruth Dyson said the motor vehicle levy would increase by 25 per cent, from $169.67 to $211.95

“The increase is primarily to cover better estimations by ACC of long-term costs of rehabilitation and treatment for seriously injured claimants. It will be funded through an increase in excise duty on petrol from 2.3 cents to 5.08 cents a litre. For the average motorist, this represents an extra $41.61 a year in petrol costs.”

Ms Dyson said it was fairer to increase petrol duty than the other source of the ACC motor vehicle levy, a portion of the annual vehicle licence fee.

“The more you drive, the more likely you are to be injured. Petrol usage is the most accurate indicator of the amount of time a motorist spends on the road and is therefore the fairest indication of exposure to risk.”

Ruth Dyson said ACC levies were low compared with overseas premium rates, including those in Australia.

“In July 2002, Australian motor vehicle premium rates, averaged across all states, were $A325 ($NZ355) a year for third party injury only. This is more than twice as much as the current ACC motor vehicle levy of $NZ169.67 which covers all injuries in motor vehicle crashes.”

Ms Dyson said while ACC’s average employer and self-employed levies were stable, many businesses overseas were facing premium increases of up to 500 per cent.

“The ACC scheme has cushioned New Zealanders against the impact of world-wide hikes in premiums which have resulted partly from the fall-out from September 11th and the failure of private workplace insurers like HIH in Australia.

“It is useful to note that HIH provided 25 per cent of workplace cover in New Zealand during ACC’s period of privatisation under the National Government.”

The new ACC levies come into effect on 1 April 2003, with the exception of the motor vehicle levy which comes into effect on 1 July 2003.

A background paper explaining the ACC levies in more detail is attached.

The new levies by industry classification will be available in the ‘products and levies’ section of ACC’s website: acc.co.nz/productslevies from 6pm, 18 December 2002.

ENDS