A further hike in the price of petrol - this time by nearly two cents a litre - is on the cards as ACC proposes an increase to the levy it collects from motorists.
The corporation is proposing a 12 per cent rise in the average levy on road users to help cover the growing costs of treating road injuries, a rise which could add 1.9 cents per litre to pump prices.
Emma Powell, ACC's chief customer officer, says the increases are necessary because "more serious injuries are occurring on New Zealand roads, while the road toll has been rising in recent years."
Ministry of Transport figures show New Zealand's road toll has climbed steadily in the last five years rising from 253 in 2013 to 378 last year, while the number of reported injuries is also up, climbing from 11,781 in 2013 to 12,456 last year.
With more serious injuries occurring on the road, costs are growing.
Powell says increased salaries for care and support workers resulting from the pay equity settlement agreed by the government last year, along with increasing medical costs and weekly compensation claims, are making it more expensive to cover the cost of injuries.
In addition, the impact of lower interest rates on ACC investments, and higher inflation forecasts, have a significant influence on future costs for the organisation. "These factors need to be reflected in the levy rates to ensure that we can support our clients' needs, which can cost more than $20 million over the lifetime of a single claim," she says.
Despite the cost pressures, Powell says the ACC is doing everything it can to keep costs down.
"Our investment in injury prevention and ongoing changes to the way we work are having a positive impact," she says. "In addition, over the past two years we have achieved higher investment returns than we had forecast.
"This is helping to keep levies from increasing as much as they would otherwise need to," she says.
As part of the same suite of proposals, ACC is also suggesting a 6.9 per cent reduction on average to the levy that business owners pay. This could result in some business owners and self-employed paying less over the next two years.
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Powell says this is because those who have suffered work-related injuries are returning to work sooner than expected, meaning compensation costs in the work account have been lower, and in turn meaning levies can be lower.
ACC is also proposing an increase in the levy on wages by 2.5 per cent to cover accidents relating to everyday activities such as sports or DIY injuries.
Powell says the changes, which overall are expected to add $86.9m to ACC's accounts (a one per cent increase in total levies over a two-year period), will help the corporation to continue to deliver the level of care that New Zealanders need in the face of a myriad of factors driving costs up including rising medical and social rehabilitation charges.
Last year ACC processed 1.9 million claims and since 2016, when levies were last adjusted, the number has grown by 6.4 per cent.
ACC is asking for public feedback on the proposals between now and October 25. People can go to www.shapeyouracc.co.nz to express their views or the levy consultation booth which will be part of a national roadshow - Ask the Nation Station - to nine cities and towns over the next month.
"It's important for people to realise these are proposals at this stage," says Powell. "We would like people to have a think about what the proposals will mean to them and from this we will make final recommendations to the government before the end of the year."
Powell says the proposed 12.1 per cent increase in the motor vehicle levy is consolidated across both petrol and registration fees.
"Overall we're proposing to increase the average motor vehicle levy we collect from $113.94 to $127.68. For petrol vehicles, 55 per cent of this comes from petrol at the pump, which would equate to an increase of 1.9 cents per litre.
"If we don't increase the petrol levy we would need to pass all the increased costs to registrations. Paying part of the levy at the pump makes it fairer for everyone on the road – the more you drive, the more you are at risk of an accident and so the more you pay."
Feedback for the levy proposals opened with the Ask the Nation Station roadshow in Wellington yesterday. It will run for the next four weeks and appear in Palmerston North, Hamilton, Auckland, Rotorua, Timaru, Dunedin and Christchurch.
For dates and venues click here.
#This is the first in a series of articles on the ACC proposals. Others will look in more depth at the impact on business owners, road users and motorcyclists.