Budget 2015 to include $500M of ACC levy cuts by 2018, Kaye says

Monday 11th May 2015

The government's 2015 budget will outline $500 million of cuts to Accident Compensation Corp levies to be made by 2018, ACC Minister Nikki Kaye says.

The cuts will include $375 million in 2016-17 and $120 million in 2017-18 and will be spread across motor vehicle, work and earners accounts, Kaye said in a statement.

The final details of the cuts won't be known until ACC completes a public consultation round, but in a question and answer attached to the media release, it says current projections are that over a two year period, the average motor vehicle levy would fall by about $75, the average work levy will drop by 20 percent per $10 of liable earnings, and a 6 percent reduction to the earners levy.

“While we’re committing to at least half a billion dollars in reductions over the next two years, it’s important people understand that the exact reductions in each account won’t be known until after public consultation," Kaye said. "The indicative reductions, if confirmed, will take total levy cuts since 2012 to around $2 billion, benefitting businesses, workers and motor vehicle owners alike."

Kaye also announced legislation to put in place a new ACC levy setting framework, which will take effect in 2016/17, called the ACC Financial Responsibility and Transparency Amendment Bill.

“New binding principles will be introduced to ensure the scheme is adequately funded to withstand economic volatilities, while ensuring levies are kept as low as possible and stable over time," she said. "The new levy setting process will enable people to see the delicate balance between ensuring there’s a sufficient buffer in each account to withstand volatilities, while demonstrating that we’re not over collecting money that could be in people’s pockets."

BusinessDesk.co.nz

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