ACC levy cuts worth $50M a year to business, says Ardern

ACC levy cuts worth $50M a year to business, says Ardern

By Pattrick Smellie

Dec. 10 (BusinessDesk) - Cuts to the Accident Compensation Corp's risk-related work levies will save New Zealand businesses about $50 million a year, while other levies will either not change or, in the case of risk-rated vehicle levies, will be discontinued.

Prime Minister Jacinda Ardern and ACC Minister Iain Lees-Galloway announced the changes after Cabinet today.

The Work Levy, which is charged to every business to cover accidents and injuries that occur at work, will fall from an average 72 cents for every $100 of liable earnings to an average 67 cents.

The Earners Levy, which is charged to cover accidents and injuries that occur other than in the workplace, will be unchanged at $1.21 per $100 of liable earnings.

Likewise, the average Motor Vehicle Levy will remain at $113.94 a year, although the current Vehicle Risk Rating programme, which assigns higher premiums to cars judged to be less safe, will be abolished.

It was difficult to apply, was not demonstrably improving the safety of the New Zealand vehicle fleet and acted as a penalty on low-income households "as they are generally less able to buy cars with the best safety ratings".

The new Work Levy will apply from April 1 next year, while the VRR system will stop on July 1.

Lees-Galloway said the levy changes will save $100 million over two years and strike the right balance by fully-funding ACC accounts without increasing the burden on New Zealanders.

Treasury had supported the changes, given the high solvency levels of the accounts and because they considered the assumptions to be conservative for a statutory scheme, he said.

(BusinessDesk)

© Scoop Media