New Zealand workers and businesses are to be denied
almost $180 million in ACC levy cuts next year as recommended
by the corporation, leaving it with an embarrassment of riches.
The Government has set aside the Accident Compensation
Corporation's recommendation that workers and businesses
receive $658 million in levy cuts next year, instead cutting
them by $480 million as indicated at the Budget.
The smaller cuts were confirmed by Prime Minister John Key at
an Auckland Chamber of Commerce luncheon today,.
"It comes on top of previous ACC levy reductions of close to
$1 billion that we announced in 2011/12'' he said.
"These levy reductions are possible because of a number of
factors good management of ACC and favourable economic
factors sustained over a number of years.
"As indicated in the budget earlier this year, most of the
reductions will be directed at motor vehicle levies. Other
ACC levies have gone down in recent years, but not motor
vehicle levies and the funding of the motor vehicle account
is growing the fastest of all the ACC accounts.
"For 2015/16 the average amount people will pay in ACC levies
will go down from around about $330 a year to $195 a year an
average saving of around about $135 per vehicle.''
The reduction was made up by a reduction in the petrol levy
of 3c per litre and a reduction in ACC portion of annual
vehicle licencing fees.
"The licence fee reduction also incorporates new safety
ratings for cars so you'll pay an even lower fee if you have
a safer car.''
The cuts mean vehicle owners will pay $438 million less a
year in petrol tax and registration fees.
ACC Minister Judith Collins also confirmed work account levy
paid by employers and self-employed people would fall to 90
cents per $100 of liable earnings, down from 95 cents. ACC
recommended a reduction to $75c which would have saved $162
million a year.
The Government decided against cutting the earners levy which
pays for non-work injuries, which ACC in recommended cutting
from $1.26 to $1.20 per $100 of earnings. That would have
saved have saved salary and wage earners $69 million a year.
ACC recommended the cut to the earners account and a deeper
cut to the work account following a public consultation
process. Those accounts are now fully funded meaning they
contain sufficient funds to meet all their future
obligations. Without cutting the levies further as
recommended by the ACC they will in effect be collecting more
money than they require leaving the corporation with the
headache of what to do with the money.
Mr Key said he anticipated further levy cuts "across all ACC
accounts'' in the future now that he was satisfied that ACC
was in good health.
- By Adam Bennett and Brendan Manning