ACC Media Release

25 November 2013

Lower levies recommended for employers, earners and all car owners

ACC Chairperson Paula Rebstock said today that ACC has considered feedback received during its recent public levy consultation, and will now recommend cuts to Work and Earners’ levies, as well as an across-the-board levy cut for all car owners next year.

“As well as a 17 per cent reduction in the average Work levy, and a 15 per cent reduction in the Earners’ levy, we’re also recommending a reduction in the Motor Vehicle levy of at least five per cent for all car owners.

“This means employers, employees and car owners could all benefit from recommended levy cuts in 2014.

“Under our ‘risk rating’ model, we originally proposed levy discounts for owners of cars that meet certain safety standards, because safer cars can potentially reduce the number, severity and cost of injuries.

“But people told us it shouldn’t just be owners of safer cars who benefit from the improved financial position of ACC’s Motor Vehicle account. So that’s why, as well as risk rating, we’re recommending the broader levy cut.”

Ms Rebstock said levy consultation offers Kiwis the opportunity to shape their ACC Scheme, but ACC can’t incorporate all suggestions it receives.

“Many motorcycle owners would like us to recommend lower motorcycle levies.  But these levies are already heavily subsidised by car owners, who contribute 72 per cent of the cost of supporting injured motorcyclists.

“If we charged motorcycle owners the full cost of motorcyclists’ injuries, it would make owning and riding a bike unaffordable. This is because motorcyclists are much more likely to get injured or suffer severe injuries in a crash, because of their lower level of protection. And these injuries can result in very high, long-term costs for ACC.”

Some feedback received during this year’s levy consultation was a sign of changing times.

“We received submissions from members of the digital visual effects industry, pointing out that they’re more likely to work indoors at a computer, rather than out and about on-set. As a result, we’ll recommend a review of the way we classify this industry, to ensure its members pay levies that accurately reflect their risk of injury.

ACC also uses levy consultation to help it start shaping ideas for future changes.

“This year, we received submissions that have already given us ideas about proposed changes we could make in 2015/16, and we’ll start developing these ideas now.

“We consider all submissions received, no matter how big or small the issue raised.”

Ms Rebstock says its recommended levy cuts have been made possible by ACC’s improved financial situation, which means the Scheme is on-track to being fully funded  – ie, having sufficient assets to meet its liabilities – by 2019.

“We’re not quite there yet.  Although we achieved a surplus last year, the Scheme’s liabilities still exceed its assets by $2.3 billion.  But we’re confident our recommended levy cuts are sustainable.”

ACC will now make its recommendations on 2014/15 levies to the Minister for ACC.  The final decision on levies rests with the Government.

View the ACC Board’s 2014/15 recommendations at www.acc.co.nz/levyconsultation

ENDS

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