ACC is looking to increase its levies by more than 7 percent for motorists. File photo.
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The Accident Compensation Corporation (ACC) levies should have been increased in the last review three years ago, says the Automobile Association (AA).
ACC is consulting on its proposal to increase its levies by more than 7 percent for motorists, and more than 4 percent for employers and earners.
It says the number of injuries has been rising, along with the cost of treating them, and higher levies are needed to pay for that.
AA principal policy advisor Terry Collins said ACC needed to be financially sustainable to continue to support people involved in motor vehicle crashes.
“The government of the day decided not to increase the levies because of the economic conditions of the time. You cannot continue to keep deferring revenue when your costs keep going up. The scheme needs to be sustainable.
“Even before we saw the outline of the levy, there was a very, very strong suspicion that the fees would be going up.”
ACC is proposing levy changes to different categories of vehicles, including motorcycles.
Collins said the AA will be analysing whether those changes were right and proposing other options.
“They (the government) still wish to continue to collect 48 percent of the (ACC) revenue via fuel, currently it’s six cents a litre. With the efficiency of vehicles fuel consumption is dropping so that’s also put the fuel excise duty regime under a bit of pressure.
“The Minister wants to work to a distance-based road user charge for fuel excise and fixing our roads. Maybe that this could be used in the future for also collecting ACC.”
Employers and Manufacturers Association (EMA) head of advocacy Alan McDonald said the boom and bust of ACC funds was frustrating.
“We go through a cycle with ACC where we’re doing okay for a while and then we seem to fall into a hole and then we’ve got a bit of surplus and then we fall into a hole again.
“Anything we can do to try and take the edge off that and that’s where I’d probably line up with the AA and agree with them that consistent small increases are better than perhaps than a bigger bang at the end of an extended period.”
McDonald said ACC needed to keep pace with changing costs, including recent sharp increases in medical costs.
He was pleased that ACC would increase the levies over the next three years, because it will be easier for employers and workers to adjust.
Both the AA and EMA will be making submissions as part of ACC’s public consultation.