2 Dec 2009

Financial health of ACC disputed

6:55 am on 2 December 2009

The Government and the Accident Compensation Corporation face growing opposition to their claims about the financial health of ACC and the need for higher levies.

As part of ACC reforms, the corporation on Tuesday announced its final recommendations which have been sent to ACC Minister Nick Smith. The Government will make a final decision on any levy increases before Christmas.

Though ACC has slightly reduced proposed increases for motorcycle owners, the levies it recommends for employers and workers remain the same.

However, Radio New Zealand understands the final increases will not be as steep as has been proposed by the corporation.

Brent Hutchison led thousands of motorbike owners on a protest rally to Parliament in November and says ACC's accounts show the corporation is not in financial trouble.

"ACC is not broke - it doesn't need to raise its levies whatsoever. We've proven this to the minister with evidence and data.

"In fact, you can prove it from ACC's own quarterly and annual reports. They clearly show that the corporation is making one heck of a profit above what it pays out in claims."

Mr Hutchison says the Government's true agenda is to turn ACC into an insurance scheme which it can sell off.

The Labour and Green parties say the Government is softening up the public for big changes, including privatising parts of the scheme.

Labour Party ACC spokesperson David Parker says the increases will be hard on people's pockets, but will not be as steep as the figures released on Tuesday.

Mr Parker says the levy recommendations fail to take into account legislation before Parliament that will push out the date for fully funding ACC.

"It's clearly just trying to paint the picture for ACC as black as possible in order to justify in the minds of people who are being asked to pay these higher levies substantial cuts to entitlements and privatisation of the scheme."

ACC levy proposals

Owners of motorbikes over 600cc would pay a levy of $739.32 next year, instead of the $781.12 originally proposed.

Employers would pay a levy for work injuries of $1.89 per $100, a 44% increase.

Employees would pay a rate of $2.80 per $100 for non-work claims, a 64% increase.

For an employee earning $45,000, the annual levy for non-work injuries would increase from $765 to $1,260 - an increase of $495.

For someone earning $60,000 a year, the levy would rise from just over $1000 to almost $1,700.