ACC back-tracks on cuts to petrol levies

Photo / Natalie Slade

ACC has back-tracked on proposed cuts to petrol levies, cutting them 2 cents to 7.9 cents per litre, rather than 4 cent cut proposed earlier this year.

The levies are proposed to take effect in 2015/16 and the changes follow a public consultation period after the announcement in May.

The current ACC petrol levy is 9.9 cents per litre. An earlier proposal was for a cut to 5.9 cents per litre.

This year's Budget featured an announcement from the Government that it planned to slash ACC levies by $480 million from next year, with motorists to get a cut of $130 a year on average.

The ACC then released its recommendations for public consultation proposing deeper overall cuts, saying that based on its funding requirements, businesses, workers and motorists should see cuts of up to $650 million next year.

ACC chairwoman Paula Rebstock today said the combined value of levy cuts recommended hadn't changed and the organisation was still recommending that the Government implemented "across the board levy cuts" next year.

"But we have recommended changing how we apportion levy cuts across ACC motor vehicle levies, which include licence levies and the ACC petrol levy."

Applying a large chunk of motor vehicle levy cuts to the petrol levy would disadvantage those who travelled low mileages in their vehicles, and who therefore bought less petrol, Ms Rebstock said.

"As a result, we're now recommending that the petrol levy be cut to 7.9 cents per litre, rather than 5.9 cents per litre as we originally proposed.

"To balance this smaller cut to the petrol levy, we're recommending bigger cuts to annual licence levies.

"In the final wash, vehicle owners will benefit from the same overall level of levy cuts that we originally proposed. The cuts will just be spread more fairly across annual licence levies and the petrol levy."

ACC would not, however, be recommending cuts to motorcycle levies, which were already heavily subsidised by other vehicle owners, Ms Rebstock said.

Risk rating, which would see car owners pay a levy which reflected how their vehicle's design affected injury outcomes in a crash, remained part of the levy changes ACC was recommending to the Government.

While owners of safer cars would benefit the most from the renewed proposals, all car owners would pay lower levies if the cuts were implemented, Ms Rebstock said.

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Proposed levy changes for 2015/16:

* 21 per cent reduction to average work levy

* 5 per cent reduction to earners' levy

* 40 per cent reduction to combined average motor vehicle levies.

* Petrol levies cutting from 9.9 to 7.9 c/l