Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


ACC surplus enables large levy reductions

Hon Dr Nick Smith
Minister for ACC

12 October 2011

ACC surplus enables large levy reductions

ACC levy reductions of more than half a billion dollars a year for workers and businesses have been approved with ACC declaring a healthy surplus for the last year of $3.5 billion.

“These levy reductions will save households $340 million a year and businesses $247 million a year. This is money that will go back into the pockets of hard working New Zealanders and will assist with our economic recovery,” ACC Minister Nick Smith said.

“The levy on wage and salary earners is reduced by 17% – or $170 a year for someone on the average wage. The levy on employers and the self-employed is reduced by 22% – a saving of $1120 a year for the average small business with seven employees.

“These levy reductions are possible because of the huge improvements in ACC finances from the deficits of $2.4 billion in 2007/08 and $4.8 billion in 2008/09, to surpluses in 2009/10 of $2.5 billion and today’s announcement of a $3.5 billion surplus in 2010/11.

“This financial turnaround and levy reductions has been achieved by major improvements in rehabilitation rates and better management of costs. Rehabilitation rates steadily declined from 2005 to 2008, but have consistently improved since with 20% fewer people on long-term compensation. ACC’s claim costs rose 58% from $1.93 billion in 2005 to $3.06 billion in 2008, but have since been trimmed back by 15% to $2.58 billion in 2010/11.”

The Earners’ Account Levy (paid by wage and salary earners) will decrease from $2.04 to $1.70 (including GST) and the average Work Account Levy (paid by employers and the self employed) will decrease from $1.47 to $1.15 (excluding GST) per $100 of liable earnings from 1 April 2012. Work levies for individual companies depend on their industry classification and experience rating.

“The motor vehicle levies on vehicles and petrol are to remain the same. The solvency in the Motor Vehicle Account is significantly behind the Work and Earners’ accounts. Levy reductions will be possible in the next term of Government for motorists if the ongoing performance improvements in ACC are maintained,” Dr Smith said.

“ACC’s Board and staff need to be commended for their hard work in turning around ACC’s finances. These significant levy reductions are good news for New Zealand workers as it increases their take home pay by keeping money in their pockets. It is equally good news for businesses by improving their cash flow.”


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

National Terrorism Threat Level Moves To Medium
Medium is defined as a terrorist attack is assessed as feasible and could well occur. The new level remains higher than it was before the 15 March terrorist attack when the threat level was low. More>>


Environment Aotearoa 2019: Report Warns Environment In Serious Trouble

The report is jointly produced by the Ministry for the Environment and Statistics New Zealand, and is a follow on from the last report in 2015.

The report says the way New Zealanders live and make a living is having a serious impact on the environment, and the benefits New Zealanders get from being in nature, though not measured or quantified, could be lost. More>>


Gordon Campbell: On Scrapping The Capital Gains Tax

As PM Jacinda Arden said yesterday, there was no point in Labour bringing a proposal into the House that it didn’t have the votes to get passed. Looking back, maybe she always felt this outcome to be inevitable... More>>


City Rail Link: Billion Dollar Cost Rise (And Preferred Bidder)

The revised cost envelope for completing the entire Auckland City Rail Link project now totals $4.419 billion. The revised cost has yet to be endorsed by the project’s sponsors (the Crown and Auckland Council). More>>


Meth Scare: Debt Write-Off For HNZ Meth Testing Evictions

People living in Housing New Zealand (HNZ) properties who were wrongly evicted because of flawed methamphetamine contamination policies will have their related debts with the Ministry of Social Development (MSD) written off. More>>


RNZ Report: Fears Grow For NZ Nurse Kidnapped In Syria

A New Zealand nurse working for the Red Cross was captured by Islamic State (IS) in Syria more than five years ago, and there are now public pleas for any information that could help bring her home. More>>


Streets Blocked In London: Climate 'Extinction Rebellion' Reaches Aotearoa

Across the world, thousands of people are taking part in a rebellion to avert climate, ecological and human catastrophe. This begins in Aotearoa New Zealand today. More>>





InfoPages News Channels