Budget indicates room for further ACC levy cuts

Budget 2014 indicates the Accident Compensation Corporation is on track to provide further levy cuts for New Zealanders of around $480 million in 2015/16, following more pleasing results over the past year, ACC Minister Judith Collins says.

“The Government will make its final decision after ACC’s public consultation, but we anticipate the bulk of these cuts will be for motor vehicle levies, along with the possibility of a levy reduction for employers and the self-employed.”

Depending on the outcome of consultation, this could reduce the average levy for a private motor vehicle by about $130 a year from 1 July 2015.

“ACC’s consistent performance has meant that annual levies for households and businesses have fallen by close to $1 billion since 2011/12,” Ms Collins says.

“The Government remains confident that a decrease in ACC levies next year is sustainable and, as a result, we are indicating a possible reduction in the cost of levies to New Zealanders of around $480 million in 2015/16.

“ACC continues to improve its financial situation, transforming the way it supports injured New Zealanders back to independence and building on its investment returns.”

The Government will also make decisions later this year about the levy-setting process and its underlying principles, so that levies remain sustainable and provide some constancy for households and businesses in the longer term, Ms Collins says.

“It’s important we ensure levies are set in a manner that is not only fair but also sustainable and maintains ACC’s ability to fund entitlements in the future.”

The Minister cautioned that final decisions on the levy rates will not be made until the results of the public consultation by ACC have been considered.