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Motorists ask when will escalating ACC costs end?


Last year motorists were stung with a 13% increase in ACC levies on their vehicle registration. This year the ACC is proposing a 22% increase in costs either through registration costs or increasing petrol taxes. At the same time the road toll has been falling.

“Motorists will naturally enough begin seriously questioning how long the ACC’s costs will keep escalating like this, and whether they have their costs firmly under control,” said George Fairbairn, Automobile Association public affairs director.

Mr Fairbairn also pointed out that ultimately the ACC was still the ambulance at the bottom of the cliff, and more had to be done to prevent injury accidents occurring in the first place.

“We are still awaiting the 2010 Road Safety Strategy and any proposals on how funding and programmes for avoiding of injury accidents will be carried out. Given that the ACC’s needs for funding is based on projections out into the future rather than current medical bills, we need to question whether overall we have the right balance between prevention and rehabilitation when it comes to collecting levies from the public.”

Mr Fairbairn however conceded that over the longer term the costs of accidents would increase because it was a brutal fact that it increasingly costs more to care for the badly injured than to bury the dead.

“In many ways we are being faced with the costs of the growing ability of medical services to save lives that in the past would have been lost. Many of those who survive accidents today will unfortunately never fully recover and society is now being confronted with the bill. That said, ACC has a duty to ensure its expenditure is reasonable. One also has to observe that the mechanisms employed to recover medical costs do not pass on any helpful price signals to the public, and simply impact on the those least able to pay regardless of whether they are more or less likely to be involved in an accident”

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Mr Fairbairn said the opportunity for a number of options to be considered for future levy rates is a positive move and motorists should take the opportunity to make their views known in the consultation process. He also called on the Government to look closely at the cost impacts on families of any price increases, the mechanisms to allocate costs to different groups of drivers, and the mix of prevention versus rehabilitation, before making their decisions.

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