9 Mar 2015

Labour accuses Govt of ACC rip-off

5:44 am on 9 March 2015

The Government has been accused of overcharging businesses for ACC levies to the tune of $370 million a year.

Nikki Kaye.

ACC Minister Nikki Kaye. Photo: SUPPLIED

An independent report commissioned by the Labour Party said the Government was collecting an excess in levies - a move which cost the economy up to 700 jobs and $70 million a year.

From 1 April, the ACC Work Account levy will drop from 95 cents per $100 of earnings to 90 cents.

The report by Infometrics said businesses should be paying only about 69 cents.

"The work account and the earner's account hold reserves worth $3.9 billion more than their claims liabilities. In the current year, the two funds are forecast to take in $373 million in levies more than needed to cover their costs, which will be added to the already over-funded reserves," it said.

Labour leader Andrew Little said the Government should be making bigger levy cuts.

He said a small business could save hundreds of dollars a year, and medium-sized and big business could save tens of thousands of dollars a year.

Mr Little said the Government was using ACC as a cash cow to balance its books.

"And that helps the Government to give the appearance that they are close to generating a surplus, which is their holy grail," he said.

ACC Minister Nikki Kaye said the levies were set at a prudent level so they could be sustainable long term.

"You can end up not having consistency and stability for businesses because you are cutting levies or raising them."

She said they needed real consistency and stability over the long term, which meant being more fiscally conservative.

Ms Kaye said $370 million could be eaten up quite quickly with a large scheme such as ACC.

ACC Futures Coalition spokesperson Hazel Armstrong said ACC levies had always been used as a political football.

"The way that levies are debated in New Zealand, we can never get an idea on what the appropriate levy should be."

"It's either getting too much in, or it is in crisis and nearly bankrupt," she said.

Ms Armstrong said while the accounts were in surplus, politicians should establish a cross-party accord to set ACC levies appropriately.

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