5. MICHAEL WOODHOUSE (National) Link to this
to the Minister for ACC
How much has it been necessary to increase ACC levies, and how do these compare to those recommended by the ACC board?
Hon Dr NICK SMITH (Minister for ACC) Link to this
Today I have announced levy increases for workers, for employers, and for motorists to help, alongside cost-saving initiatives, to address the accident compensation scheme’s financial difficulties. The earners levy will rise from $1.70 to $2 per $100 of earnings; the employers’ levy increases from an average of $1.31 to $1.47 per $100 of earnings; the accident compensation levy on vehicle registration for a standard petrol car will increase by $30; and the petrol levy is to remain unchanged at 9.9c per litre. The board of the Accident Compensation Corporation (ACC) recommended larger increases, but given the cost impacts on families and businesses of the recession, which New Zealand is just starting to recover from, Cabinet decided that these lower rates were appropriate.
Michael Woodhouse Link to this
What decisions has the Government taken on motorcycle levies and on steps to reverse the trend of increasing motorcycle accidents?
Hon Dr NICK SMITH Link to this
The accident compensation levies on registration fees will rise to $129 for mopeds or scooters under 50cc, to $328 for motorcycles under 600cc, and to $427 for motorbikes over 600cc. Of this, $30 will be ring-fenced for a new $3 million per annum dedicated motorcycle injury prevention fund. This will be modelled on the Victorian scheme where motorcycle clubs, in partnership with the Transport Accident Commission, have successfully reduced motorcycle fatalities by over 20 percent.
Hon David ParkerWhy does the Minister not accept the view of motorcycle riders that the disproportionate increase in levies for some bikes represents a policy change by the current Government?
Hon Dr NICK SMITH Link to this
There is very clear evidence that the cost of motorcycle accidents for those very large bikes does go up significantly; it is about double in terms of the cost per bike. The levy announcements made today provide for about a 35 percent extra premium. I note that it was a decision of the previous Labour Government to introduce higher fees for motorcycles back in 2002.
Michael Woodhouse Link to this
What reports has the Minister seen on claim-cost inflation in the last 4 years, compared with general inflation, and what steps has the Government taken to contain costs so that the full burden of fixing accident compensation does not fall on levy payers?
Hon Dr NICK SMITH Link to this
Claim costs have risen 57 percent in the past 4 years—five times the rate of inflation. The Government is working with the ACC to better manage these costs. We have initiatives under way covering physiotherapists, high-tech imaging, hearing, self-harm, rehabilitation, and criminal entitlements that will save over $100 million per year. The Government’s approach is a fair balance of levy increases and cost savings, so that we can get the scheme’s finances back into proper shape.
Why has it taken the Minister 6 months to acknowledge that his levy increases never needed to be as extreme as the figures he caused to be used earlier?
Hon Dr NICK SMITH Link to this
The books that were signed off by the previous Government last year showed a loss of $2.4 billion. This year’s audit accounts for the accident compensation scheme show a loss of $4.8 billion. It is a huge challenge for this Government both to get costs under control and to provide for modest levy increases, so that we can secure the future of our unique, 24/7 accident compensation scheme.