Govt scaremongering over ACC levy hikes - Labour

Labour ACC spokesman David Parker says the Government is intentionally trying to scare the public with over inflated ACC figures.

Levies for workers on the average income would go up by almost $500 if ACC recommendations to the Government went through in their current form.

However Mr Parker said the increases would not be as steep as the recommendations and accused the Government of scaremongering for not giving more realistic figures.

"This is further evidence of the Government's agenda to misrepresent ACC's position so as to soften up the public for major cuts to ACC entitlements and privatisation," Mr Parker said.

The Government says ACC has become unsustainable and reform is required to secure its future.

ACC today released its final recommendations after getting submissions on proposed hikes. However the earners' levy increase does not take into account a bill before Parliament to cut some entitlements and extend the date for full funding for residual claims liabilities from 2014 to 2019. It is unclear how much less the increase will be once that passes but it will still be significant.

The recommendations also largely retained steep increases to motorcycle levies. There has been an outcry over the motorcycle increases but all workers will be hit in the pocket by changes.

ACC examples of how the earners' levy would impact on workers showed those on a salary of $20,800, currently paying $353.60 a year, would pay $582.40 under the change. For those on $45,000 the increase was from $765 to $1260. Those on $60,000 were paying $1870 and this would go up to $3080.

A spokesman for ACC Minister Nick Smith said Mr Parker knew there was a process the Government had to follow.

"ACC comes up with its recommended rates, the minister then gets independent advice from the Department of Labour, then that is presented in a paper to Cabinet and that is actually what the process is."

He said the levies would be lower than recommended.

"The intention is to set the levies taking into account the legislation, and that will happen."

He could not give an estimate of how much less the increases would then be.

Under today's recommendations the motor vehicle levy would increase from $119.08 to $182.27. The new recommendation is down on the $204.60 that ACC consulted on.

Moped levies would increase from $100.46 to $277.25. The previous recommendation was $292.93.

Motorcycyles in the 0-125 cc range were better off going from $430.54 to $277.25. However gruntier bikes were worse off - those in the 126-600 cc range would go from $430.54 to $517.52. The previous recommendation was $546.78.

And bikes 601cc plus would increase from $430.54 to $739.32, lower than the previous $781.12 recommendation.

ACC chairman John Judge said the organisation received a record number of submissions on its proposed levy hikes, which prompted angry motorcyclists to ride to Parliament in protest.

Motorcyclists are angry that rises appeared to be going ahead.

Aucklander Anne James, who organised protests against the intended hikes last month, said revised targets were "nowhere near" acceptable.

"To lower them $41.80 for a motorcycle over 600cc doesn't cut it for us," she told Radio New Zealand.

Levies on motorcyclists were going up more than for other vehicle groups, and bike riders would continue to protest, Ms James said.

Mr Judge said in a statement that ACC still wanted to bring in more money and was only slightly lowering the recommendation for the motor vehicle levy.

"There are several reasons why we have generally stuck to our original figures. Most importantly, we believed that if the levies were set at lower levels then ACC's difficult financial situation would only be worsened," Mr Judge said.

Mr Judge said ACC was also trying to reduce costs but without the levy hikes the future of the corporation would be in doubt.

"It is clear that these increases will be unpalatable, especially in the current economic climate. But if New Zealand is to retain the ACC scheme then I believe they are necessary," Mr Judge said.

- NZPA