Help shape ACC levy rates for 2019-2021
All Kiwis are invited to have their say on the proposed changes to levies before the ACC Board makes its final recommendations to the ACC Minister for a decision, says ACC Board Chair, Dame Paula Rebstock.
“ACC encourages everyone to make a submission on any aspect of what's being proposed, and provide their insight into where ACC should be focusing its future efforts.”
The proposed levies are generally lower than those forecast in 2016. The proposals for the 2019-2021 levy period include:
- decreasing the average work account levy for employers from $0.72 to $0.67 for every $100 of liable earnings. This is a decrease of 6.9%.
- increasing the earners’ levy for workers from $1.21 to $1.24 for every $100 of liable earnings. This is an increase of 2.5%.
- increasing the average motor vehicle levy for road users from $113.94 to $127.68 including a proposed increase of 1.9 cents per litre for petrol. This is an increase of 12.1%.
Drivers of change
“Since we last adjusted levies in 2016, the number of claims for injuries has grown by 6.4%, with more people than ever needing our support,” says Dame Paula Rebstock.
Pressures on costs include:
- increasing medical costs
- increased costs for care and support workers resulting from the pay equity settlement agreed by Government
- the introduction of free doctor visits for under 14s
- increases in weekly compensation claims.
“In addition, the impact of lower interest rates on our investments, and higher inflation forecasts will have a significant influence on future costs. These factors need to be reflected in the levy rates now to ensure that we can support our clients’ needs throughout their lifetime.“
“Despite the cost pressures, our investment in injury prevention and ongoing changes to the way we work are having a positive impact. Over the past two years, we've also achieved higher investment returns than forecast.
“This is helping us to manage increasing costs, and, with the exception of the motor vehicle account which is slightly higher than anticipated, we've kept levies from increasing as much as we had thought in 2016,” says Dame Paula Rebstock.
Lower than predicted
Prudent management is helping to keep levies from increasing as much as ACC anticipated in 2016.
ACC has been able to reduce the work levy for employers and self-employed because people requiring weekly compensation are returning to work sooner than expected and over the past two years we've achieved higher investment returns than we had forecast.
People are tending to lead more active lives, exposing themselves to greater risk. This leads to more claims, which increases the need to raise levies.
However, the proposed levy is significantly below ACC’s original forecasts in 2016, where ACC predicted that an increase of 9% would be needed for the levy we collect from Kiwi wages ($1.32 per $100 of liable earnings) to pay for increased treatment and compensation costs.
“It is also considerably below what workers were paying in 2011 and 2012 when the Earners’ levy peaked at $1.78. That’s 44% higher than the rate of $1.24 we're proposing for the next two years.”
Motor Vehicle levy
The cost of supporting injured customers has continued to increase. The biggest driver has been pay equity.
However, for road users, the increase is significantly below what motorists had to pay in 2013 and 2014 when the average Motor Vehicle Account levy peaked at $333. That’s more than $200 higher (161%) than the rate we're proposing for the next two years.
Have your say
ACC is taking the consultation to the streets of New Zealand with a roadshow to nine towns and cities featuring a new 'Ask the Nation Station'. It’s an 'out-of-the-box' way of getting out to communities to encourage comment and participation.
You can find out more detail and provide your feedback on our consultation website:
Dates and locations of the 'Ask the Nation Station'
|Thursday 27 September||Wellington||Midland Park, Lambton Quay|
|Tuesday 2 October||Palmerston North||Massey University, Tennant Drive|
|Thursday 4 October||Hamilton||Garden Place TBC|
|Saturday 6 October||Auckland||Otara Market|
|Monday 8 October||Auckland||Harley Davidson retail shop, 521 Mount Wellington Highway|
|Wednesday 10 October||Rotorua||World Indigenous Business Forum, Rotorua Energy Events Centre|
|Saturday 13 October||Timaru||Caroline Bay Park TBC|
|Wednesday 17 October||Dunedin||Business Customer Solutions Employer Seminar, Otago Golf Club|
|Tuesday 23 October||Christchurch||Retail precinct TBC|
The consultation period is from 27 September 2018 to 25 October 2018. After this consultation period, the ACC Board will consider all feedback received and make its final recommendations to the Minister for ACC.
The Government is expected to decide on final levy rates in December 2018.