Bid to cut ACC levies hits wall

ACC Minister Judith Collins Photo / NZPA

ACC has recommended slashing more than half a billion dollars off ACC levies for workers, employers and motorists next year.

But the Government, which ignored the corporation's recommendation for $330 million of cuts last year, has indicated it is likely to go with far smaller cuts than recommended.

ACC yesterday said it had recommended a 15 per cent cut in the work levy paid by every employer and self-employed person and a 17 per cent cut in the levy paid by employees.

The corporation also recommended a 15 per cent cut to the motor vehicle levy. Under the proposal, private passenger vehicles would be categorised according to their safety rating. Currently, owners of petrol-powered passenger vehicles pay $198.65 to ACC. Those with diesel vehicles pay $321.59.

Under the new scheme owners of petrol vehicles with the lowest risk rating would pay $98.65 and those with diesel vehicles $222.53.

This would account for 750,000 vehicles in New Zealand.

The corporation is seeking public input on its proposals before making its final recommendations to the Government which has the final say.

The proposed cuts would save employers, workers and motorists $562 million a year but ACC Minister Judith Collins has already said the Government plans more modest cuts of about $300 million.

She said ACC's proposals to cut levies were not an indication they were set too high, but "a sign of some really good work at ACC bringing down the liabilities".

Recommendations

* Reduce the Work levy by 17% from $1.15 to $0.95 for every $100 of liable earnings: annual saving $152m or $109 for someone on the average wage.

* Reduce the Earners' levy by 15%, from $1.48 to $1.26 per $100 of liable earnings: annual saving $236m.

* Reduce the average Motor Vehicle levy by 15% or from $330.68 to $280: annual saving $173m or $50 for the average motorist.

- additional reporting: Teuila Fuatai of APNZ