Single mum Jasmine Donelley drives around in a small car cleaning houses for a living and a hike in motor vehicle registration levy and fuel tax will hit her particularly hard.

She said the Accident Compensation Corporation's justification to hike the charges was a "cop out" that would make life harder for not just struggling families but the working class as well.

Her comments followed a proposal by ACC to increase the average motor vehicle levy for road users by 12.1 per cent, from $113.95 to $127.68 each year, and an increase in tax of 1.9 centre per litre for petrol.

ACC is blaming the proposed rise on higher medical costs relating to road accidents.


Since 2016 when the ACC levy on motor vehicle registration went down, the number of overall claims for injuries grew by 6.4 per cent.

Public consultation on the proposed levy changes will run until October 25.

Donelley can't afford rent and has been living in a caravan at the Springs Flat Caravan Park, just north of Whangārei, for just over an year.

"I am struggling to keep on top of my bills and now more for petrol and vehicle rego. It's ridiculous. It will mean struggling people will struggle more," she said.

"I spend on average $80 a week on petrol because I travel a lot as part of my work. Every fortnight, I drive to Maungaturoto for work so I can easily use a whole tank in a week.

"It's not just me that's going to be hard-hit. I can vouch for anybody living in a caravan park but most of them are working, and having to pay more for transport will hit their pockets hard."

Donelley said there were other ways ACC could recover higher costs rather than making life more difficult for struggling families.

Whangarei Budgeting Services co-ordinator Dianne Clarke said increased petrol and transport costs, it they come into effect, would be just another burden on poor families.


"A lot of families, including working people, are going to struggle if they have to pay more and with minimum wage $16.50 an hour, it just doesn't cut it."

She said people were already paying between $40 and $50 a week for petrol on top of parking charges.

"We've already seen a lot of clients who have unregistered vehicles because they simply can't afford to have them registered. Then they get fined $200," Clarke said.

ACC is expecting 110 serious injury cases each year for 2019 and 2020, with an estimated lifetime cost of $164 million every year.

ACC also announced it would lower the average work account levy for employers from 72 cents to 67 cents for every $100 earned.

However, the earners' levy for workers will rise from $1.21 to $1.24 for every $100 earned.

"Experience tells us that during times of economic growth such as we have experienced over the last few years, people tend to lead more active lives, exposing themselves to greater risk," ACC chairwoman Dame Paula Rebstock said.

In the past two years, she said ACC had covered costs for more than 30,400 road accidents which was a 9 per cent increase from 2016.

In 2015, the previous government agreed to $450 million of ACC levy reductions across motor vehicle, work and earners' levies.

The average motor vehicle levy decreased by 33 per cent, from $194.25 to $130.26 per vehicle.

The average work levy paid by businesses reduced by 11 per cent to 80c per $100 of earnings, and the earners' levy, paid by everyone in the paid workforce, decreased by 4 per cent to $1.21 per $100 earned.