However, Mr McGowan hoped proper due diligence had been carried out on the price reductions before they were made and announced.
"We don’t want to see a knee-jerk reaction in five to 10 years, as we have seen in the past when levies have been raised.
"The business case needs to be robust so the next generation does not have to pay for this generation’s follies."
Acting ACC Minister Nathan Guy announced yesterday reductions totalling $126.2 million a year to work and motor vehicle levies, although the earners’ levy would remain unchanged.
The reductions followed more than $2 billion of ACC levy cuts previously made by the Government.The main points of the announcement were:
● The average work levy paid by employers and self-employed people would reduce from 80c to 72c per $100 of liable earnings, a reduction of 10%.
● The average motor vehicle levy, which included the annual licence levy and petrol levy, would reduce from $130.26 to $113.94, a reduction of 12.5%.
● The petrol levy would reduce from 6.9c per litre to 6c per litre, a reduction of 13%.
Mr McGowan said he was pleased a new biennial approach would be taken to levy settings, meaning the levies would only be reviewed every two years.
The reduced work levies would apply from April 1 next year and reduced motor vehicle levies would apply from July 1 next year.
Self-employed business people would benefit from the reduced work levy, along with people running small to medium-sized businesses with few employees and tight margins, he said.
Businesses with large fleets of cars would feel the benefit of reduced motor vehicle levies.
"It was not so long ago people were paying $240 for car registration. That price is significantly lower and is effective almost immediately."
Companies with travelling sales people would also feel the benefit of reduced vehicle levies, right down to small firms with only one or two cars. Every reduction in costs and overheads helped, Mr McGowan said.
Mr Guy said the Government had decided not to implement ACC’s recommended 4c increase to the earners’ levy paid by everyone in the paid workforce to cover out-of-work injuries.
"This is because the earners’ account’s current funds are sufficient to meet its liabilities at this point. Keeping the earners’ levy at the current rate for a further two years means it will not be necessary to reset levy collection systems for what would be a very small increase."
The decision was consistent with the principles of financial responsibility set out in the Accident Compensation Act 2001 which required ACC’s accounts to meet lifetime claims costs while avoiding large changes in levies, he said.
Other changes confirmed yesterday included updates to vehicle risk ratings which determined licence levies based on recent crash data and a reduction to the annual licence levy for electric vehicles.
Annual licence levies for motorcycles would remain at current levels but Mr Guy said motorcyclists would benefit from the reduced petrol levy.
