A substantial decrease in ACC levies for employers and the self-employed is being welcomed with open arms by Otago-Southland Employers Association chief executive John Scandrett.
"A 22% decrease is fantastic news in anyone's language and coming after the Government's reduction in corporate tax, this is additionally positive," he said.
ACC Minister Nick Smith yesterday announced ACC levy reductions of more than $500 million a year for workers and businesses after the corporation reported a surplus of $3.5 billion for the year ended June.
The reductions come in on April 1 next year.
Dr Smith said the levy reductions would save households $340 million a year and businesses $247 million a year.
"This money will go back into the pockets of hard-working New Zealanders and assist with our economic recovery."
The levy on wage and salary earners would reduce by 17%, or $170 a year for someone on the average wage.
The levy on employers and the self-employed would reduce by 22%, a saving of $1120 a year for the average small business with seven employees.
The levy reductions were possible because of the improvements in ACC finances from the deficits of $2.4 billion in 2007-08 and $4.8 billion in 2008-09 to surpluses in 2009-10 of $2.5 billion and yesterday's announcement of a $3.5 billion surplus, he said.
Dr Smith's announcement came the day after Finance Minister Bill English announced that Earthquake Commission levies would rise from February 1 next year.
For insured homeowners, the commission levy will rise from 5c per $100 to 15c, an additional $2.65 a week for most homeowners. The maximum to be paid each year rises from $69 a year to $207.
Mr Scandrett said the ACC levy reduction would be particularly helpful to the service sector in the region - hospitality, retail, accommodation and tourism.
"We have lots of small firms operating in that space. A $1000 or more a year reduction means they can make decisions about additional investment or refocus their budget."
However, he wondered whether the prospect of competition in accident insurance prompted the announcement.
Labour Party ACC spokesman Chris Hipkins said reducing the levies highlighted how dishonest and cynical the Government was in talking up a manufactured crisis in ACC.
"ACC was never in crisis. Nick Smith and the National Party manufactured a crisis in order to justify hiking levies and in order to prepare ACC for privatisation.
"I'm sure householders and businesses will welcome the relief lower ACC levies will bring.
They never should have been paying such high levies in the first place."
