10 Dec 2018

ACC lowers work levy, scraps vehicle risk rating

7:50 pm on 10 December 2018

The government is to reduce the ACC Work Levy which is paid by employers and self-employed people but other levies will remain at the same rate.

ACC Building

Photo: RNZ / Richard Tindiller

The work levy will decrease from 72 cents per $100 of liable earnings, to 67 cents.

The ACC Vehicle Risk Rating programme will also end.

ACC Minister Iain Lees-Galloway said the programme, which applied different levy rates to different makes and models of cars based on their safety ratings, was challenging for ACC to administer and lacked evidence that it was contributing to a safer vehicle fleet in New Zealand.

"There is no evidence that variable levies based on VRR contribute to injury prevention or encourage the purchase of cars with higher safety ratings.

"It also loads more of the burden onto low-income people and families, as they are generally less able to buy cars with the best safety ratings."

Prime Minister Jacinda Ardern said ACC proposed in September to increase the petrol levy by about two cents per litre, alongside an average increase in the motor vehicle levy of about 12 percent.

But she said the government rejected those increases as it was considered that many motorists were "feeling a lot of pain at the petrol pump".

"Cabinet did indeed make the final decision on levy rates based on wider public interest, taking into account the feedback we recieved from publis consultation, and I think it's fair to say that feedback was fairly overwhelming.

"As a result cabinet concluded that ACC levies will not increase."

The new Work and Earners' levies would come into effect on April the first next year and the vehicle risk rating would no longer apply from July the first.

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