9 December 2004

ACC levies unchanged for employers and earners

Employers and earners will welcome ACC average levies for 2005/06 that have remained the same or decreased for the last three years, ACC Minister Ruth Dyson said today.

The government has confirmed the levy rates for 2005/06 recommended by ACC following public consultation that ended in September.

Details of the new levies include: The average composite employers’ levy, which funds workplace injuries to employees, will remain at $1.21 for every $100 of payroll. The total non-work levy (which funds all non-work injuries to earners), will remain at $1.07 for every $100 of earnings.

The average composite self-employed levy will increase by 12c to $3.22 for every $100 of earnings. The self-employed account represents less than 4 percent of all levies gathered by ACC. The average composite motor vehicle levy – made up of the vehicle licence fee plus a petrol levy - will increase from 1 July 2005. For petrol-powered vehicles, the licence fee will be unchanged, while the levy on petrol will rise from 5.08c per litre to 5.78c. For non-petrol-powered vehicles, the licence fee will increase.

The above rates exclude GST and must be promulgated by regulation in order to take effect from 1 April 2005, with the exception of motor vehicle levies which take effect from 1 July 2005. The regulatory process is underway and should be completed early next year.

Ruth Dyson said the new levies had been influenced by less favourable long-term interest rates, on which ACC's long-term liability and expectations of future investment earnings were based.

“It is gratifying to maintain the same levies for employers and earners next year, in spite of a decline in long–term interest rates from 6.5 per cent to just over 6 per cent since August 2004.

“Stable levies help businesses plan ahead with certainty, as well as enabling ACC to provide effective rehabilitation and fair compensation for people who are injured, and carry on its strong injury prevention focus.

Ms Dyson cautioned that, in spite of the stable levies, some employer industry groups would face levy increases because of their injury experience.

She said self-employed levy rates had to increase because aggregate earnings for this group had declined but injury rates had remained constant.

Proposed increases in weekly compensation entitlements in the Injury Prevention, Rehabilitation and Compensation Amendment Bill could also affect the self-employed levy. If the bill is passed in its current form in time for changes to be included in the 2005/2006 levy round, the average composite self employed levy would need to increase from $3.22 to $3.28 for every $100 of earnings.

However, Ruth Dyson said, comparisons with injury schemes overseas continued to show that ACC provided excellent value for money.

“New Zealand employers pay around half the rates of their Australian counterparts to cover workplace injuries, while the proportion of injured workers in this country who report a lasting return to work is considerably higher than in Australia.”

The new levies by industry classification are available in the Products and Levies section of ACC’s website: www.acc.co.nz/productslevies

ENDS

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