17 May 2013

ACC 'working smarter' so levies can be cut

9:10 pm on 17 May 2013

Accident Compensation Minister Judith Collins says a levy reduction has only become possible because ACC is working smarter and earning a good income.

In Thursday's Budget the Government signalled a significant drop in levies in the next two years.

Ms Collins says although the levy cuts are not set in stone, with the way ACC is performing she expects a $300 million reduction in the next financial year and a $1 billion reduction the year after.

"This is where we expect to be," she says, "based on the performance that we're seeing to date. ACC has had a huge turnaround in the last year or so."

Ms Collins says levy increases in 2009 were necessary because ACC was in a dire financial position, but that is no longer the case.

However, she says ACC needs to continue to win people's trust by - among other things - reducing the number of privacy breaches.

ACC Futures Coalition spokesperson Hazel Armstrong says her group welcomes the drop in levies, but she wants governments to stop moving them up and down to suit their own needs.

"This announcement opens the way for a cross-party accord so that levies can be set not on political grounds but on what we need to look after the needs of New Zealanders."

Ms Armstrong says she's also pleased the Government has indicated it will not be privatising ACC.