The Government will deliver tax cuts in the next financial year by slicing $450 million off ACC levies in 2016-17.
The reductions will take effect before the next election in 2017 and will be a powerful tool for Prime Minister John Key to take into the campaign.
ACC Minister Nikki Kaye said the levy reductions would apply across motor vehicle, work and earners' levies.
There would be a 33% reduction to the average motor vehicle levy, made up of the petrol levy and annual licence levy, from an average of $194.25 now to $130.26 per vehicle.
There was no reduction in motorcycle levies.
There had been no significant reduction to motorcyclists' injury costs over the past year and 76% of those costs were already met by other road users, she said.
Extra safety initiatives for motorcyclists would be rolled out next year.
The average work levy paid by businesses would reduce by 11% to 80c per $100 of liable earnings and the earners' levy - paid by everyone in the paid workforce - would decrease by 4% to $1.21 per $100.
"These levy reductions are significant, as only twice in the last seven years has the Government agreed to implement all of the ACC board's recommendations.''
The cut in the motor vehicle levy meant it was now at a historically low level, Ms Kaye said. The annual ACC licence fee component for every petrol car would be less than $90.
Following public consultation, the ACC board recommended the petrol levy paid at the pump should stay at 6.9c per litre rather than be reduced to 5.7c per litre, as had been earlier proposed.
Instead of reducing the petrol levy by 1.2c, the board recommended an additional reduction to the annual licence levy of $13 per petrol car.
Ms Kaye indicated further help could be on the way for people who did not use their cars frequently.
Submissions argued shifting the balance slightly towards the petrol levy would mean those who did not use their cars a lot would pay fairer levies.
The Government had taken note of the feedback and implemented the ACC board's recommendation in this round of cuts, she said.
"I believe we need a clearer policy around how the petrol and annual licence levy are apportioned in the future and work will be done on this next year.''
Changes could also be possible on the different safety levels of cars and the levies paid as a result.
ACC would consult from December 14 on specific levy rates that would apply as a result to particular vehicles.
That would give people an opportunity to see and comment on how their own vehicle was rated and why, before final decisions were made, she said.
The levy reductions were possible because of ACC's clear focus on financial sustainability, its high-performing investment strategy and growth of the scheme's assets from $10 billion in 2008-09 to about $32 billion now.
"The reductions, which are a continuation of significant reductions for three years now, will be welcome news for many as we head into the Christmas season. For some, the reductions next year will be significant and for hard-working New Zealanders, every little bit helps.''
At a glance
In 2016-17 financial year
• $450 million in ACC reductions.
• Average motor vehicle levy cut by 33%.
• Average work levy paid by businesses will reduce 11%.
• Earners levy falls 4% to $1.21 per $100.
• No change to motorcycle levy.
