ACC proposes across board cuts next year

ACC is proposing significant cuts to motor vehicle levies, including the ACC petrol levy, next year, as well as further reductions to work and earner levies.

The corporation is seeking feedback on these and other proposed changes as part of its annual levy consultation process, which starts today. . .

“On average, we’re proposing a forty per cent cut to motor vehicle levies, which are paid when relicensing a vehicle and through the petrol levy paid at the pump,” says ACC Chair Paula Rebstock.

“We’re also proposing an average twenty-one per cent cut to work levies, and a five per cent cut to the earners’ levy in 2015.”

This would have a similar effect to tax cuts, leaving more money in the pockets of workers and motorists.

This follows the significant reductions to work and earner levies which took effect in April this year.

Ms Rebstock says “This is a significant package of proposed levy cuts, made possible by the fact that the Scheme has achieved its goal of being fully funded.”

Full funding means ACC has sufficient financial assets to meet the lifetime costs of all existing claims.

That is the only way to ensure the scheme is sustainable.

As well as reducing motor vehicle and petrol levies, ACC is also proposing the introduction of ‘risk rating’ for cars in 2015.

Risk rating would see the levy paid by car owners reflect how their vehicle’s design affects injury outcomes in a crash.

Motor vehicle levies already reflect the different risk and cost of injury associated with different classes of vehicle. Risk rating would enable a more sophisticated classification of risk, based on real life crash data, within the ‘light passenger’ classes, which essentially comprise cars.

“Risk rating would mean owners of safer cars pay lower levies, to reflect the fact their vehicle is less likely to cause injury if involved in a crash.

This means the cost would reflect the risk.

The alternative is people with safer vehicles subsidising those whose vehicles are more dangerous.

Wait for the uproar from the usual suspects pointing out that poorer people are likely to have less safe cars and therefore will be paying more.

“While owners of the safest cars may receive the largest levy cut, I’d like to emphasise that all car owners will pay lower levies under our proposed changes.”

Ms Rebstock says ACC is not proposing levy reductions for motorcycles next year. This is because motorcycle-related injuries continue to generate disproportionately high costs for the scheme, and motorcycle levies are already heavily subsidised by owners of other types of motor vehicle.

Proposed changes to levies in 2015/16
• combined average motor vehicle levy reduced from $330.68 to $200 (40% reduction)
• petrol levy reduced from 9.9 cents to 5.9 cents per litre (40% reduction)
• average work levy reduced from $0.95 to $0.75 per $100 of liable earnings (21% reduction)
• earners’ levy reduced from $1.26 to $1.20 per $100 of liable earnings (5% reduction)

Other changes that ACC is proposing for 2015/16 include:
• increasing the minimum and maximum liable earnings limits for work and earners’ levies. . . 

There’s more on the proposed changes here.

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