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Government vetoes ACC's proposed motor vehicle levy hike and reduces work levies. It also scraps the vehicle risk rating programme

Government vetoes ACC's proposed motor vehicle levy hike and reduces work levies. It also scraps the vehicle risk rating programme

The Government has vetoed ACC proposals to hike average motor vehicle levies by 12.1%.

This means the average levy, which includes a vehicle registration fee and a 6 cent per litre fee paid at the petrol pump, will remain at $113.94.

ACC in September said that since the last levy adjustment in 2016, the number of claims for injuries had grown by 6.4%, with more people than ever before needing ACC support.

It recognised it was over-funded with its projected solvency rate for 2019-20 at 111%. It said it aimed to drop this back to the target 105% by charging those who got injured less than it needed to.

However, speaking at a post-Cabinet press conference on Monday, Prime Minister Jacinda Ardern said Cabinet made the decision not to hike motor vehicle levies based on the “wider public interest”.

She noted the high cost of living and “pain” motorists had experienced at the petrol pump.

Ardern also pointed out both the Ministry of Business, Innovation and Employment (MBIE) and Treasury believed ACC’s books were in good shape.

Work levies cut, Earners levies to remain where they are

The Government has also announced that in line with ACC’s recommendations, it will reduce average work levies paid by employers and self-employed people from 72 cents to 67 cents per $100 of liable earnings. This equates to a 7% reduction.

The change will come into effect on April 1, 2019.

It will save businesses $100 million over two years.

The earners levies paid through PAYE (or invoiced directly through ACC for self-employed people) will remain at $1.21 per $100 of liable earnings, even though ACC recommended it be increased to $1.24.

Vehicle Risk Rating scrapped at cost to nearly half of car owners

The Government has decided to ditch the vehicle risk rating programme, introduced in 2015.

The programme sees owners of more dangerous car makes and models pay higher levies than those with cars that have better safety ratings.

ACC in September said doing away with the programme would see car owners pay a flat levy of $40.30. This would see owners of cars in the safest band pay $23.34 more, while those in the other three bands would pay between $1.13 and $46.39 less.

It noted just over 46% of cars were in the safest band, so would have to pay more.

The Minster for ACC Iain Lees-Galloway said it was challenging for MBIE to administer the vehicle risk rating programme and there was a lack of evidence that it is was contributing to a safer vehicle fleet. 

“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,” he said.

The vehicle risk rating will no longer apply from July 1, 2019.

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Well, well, well. Something for the self-employed - a no increase on a cost. Thanks Jacinda. You're all heart.

"it will reduce average work levies paid by employers and self-employed people from 72 cents to 67 cents per $100 of liable earnings. This equates to a 7% reduction."

So they're reducing the burden by 7% and you think this is "no increase"?

I was just looking on line for a yellow vest for my car too......

Do roads get more dangerous as the number of vehicles increase? Is it a linear relationship or a power law? Any unintended consequences here of the all party quasi-religous belief in the wonderfulness of high immigration rates? I mean, it is possible, perhaps.

Traffic congestion is a great road safety tool. How many serious accidents can you have if the average speed is 9 km/h?

Yes, lots of small crashes with only minor injuries. Excellent driver of GDP growth too, all those fabulously expensive light fittings that get smashed, and full employment for panel beaters, not to mention the boost to GDP from the increased insurance premiums.

Sure. But that applies to congested city traffic only.
Country roads however... totally different, they can't cope with that amount of traffic.

Heaps.. cos at 9kph the phone comes out and the brain switches off.

My car is a safe one, so I wonder what my rego will increase to after April......
Iain Lees-Galloway is involved in this decision. Hmmmmm I wonder how much of the report he read.
VRR has only been active for a couple of years hasn't it? Surely it would not have been expected to make much of a difference to fleet purchase in that short time. Plus it's more like a reward for not buying something that may injure yourself really badly and cost ACC heaps. However my complaint with it was always that it didn't penalize huge big heavy SUVs and Utes. Because if one of those behemoths smashes into your little economical hatchback, you are going to be shunted backwards by the laws of conservation of momentum which makes the impact so much worse for you.

Ah, yes, an important point. The heavier vehicle wins as deceleration is less extreme, the dark underbelly of car safety. Amazing how complex these issues are. Encouraging us to travel in death traps seems a bit questionable though. Anyway, I thought yer lower classes travelled in big V8s, but maybe I'm behind the times and bogan culture is no more.

Bogans drive old v8 Commodores and Falcons (1.5ton), the well-heeled drive V8 turbo diesel Audi Q7 SUVs (2 - 2.5ton).

On the flip side, heading south into Ngaruawahia from the road on the West side of the river there is a vehicle wreckers. Look at what they have there. It seems that 4WDs roll alot!

I wanted one of those (grandchildren transport) - in the old shape that looks more like a big wagon than an SUV. For petrol cost reasons we settled for a Holden Captiva diesel. And it's been good. We got the leather seats and the kids can climb all around without Grandad worrying about it :-). Still have the Audi TT when we want to experience a 'drivers car'.

No new taxes, just extensive tweaks to anything-but-a-tax(by Regulation, mais naturellement) to swell the coffers....

I was just beginning to enjoy the really really low rego cost on my Subaru's and the older cars had already come down in cost anyway to the point I registered it again instead of putting it on hold. No way I was paying $300 a year for something I hardly drive. Really need some sort of multicar rego as you can only drive one at a time ! No point making it too expensive, people don't bother with the Reg or the WOF and still drive it anyway.

Talk about biased reporting: "Vehicle Risk Rating scrapped at cost to nearly half of car owners"

How about "Vehicle Risk Rating scrapped, most car owners to benefit from lower levy"

Yeah right... Labour knew that as the nations' fleet is upgraded the average vehicle safety rating will rise and their lolly scramble accident insurance funds would be eroded. Eventually everyone would have been driving a tier 4 safe vehicle.

But it's not a tax it's a "levy".

Or would it not have been better to apply that 7c or part of it to a tax break for the wage earner?
In Effect an injection into the economy's disposable income, to help counter the predicted drop in GDP?

It’ll trickle down.

In all honesty, the failure to get virtual vehicle registrations implemented is beyond me. I also want to know why the MSM hasn't dug into the story behind ACC historically overcharging on premiums, which they have now begun refunding to the tune of $100 million....I have $400 coming to me, did you get yours?

Virtual vehicle registrations? What are you on about?

Probably some fancy online rego portal, which would be a complete waste of money. I have no issue paying my vehicle registrations online, and if I need to know when it's due I just step outside and look at the windscreen.

I was wondering if he was wanting to register his cars from GTA or something. Is the registration virtual.. or the vehicle?

Could be a VR module you load with your Occulus Rift. Select which AA branch you want and then you can register your vehicle in the Virtual Simulator.

Another stealth tax on the middle class by Labour. I have two cheap cars a 2L family wagon and a 2L sedan and neither is worth a lot. But I guess you have to pay for everyone's lolly scrambles some how right? The breeders, the bludgers, the boomers the greenies and the Jones' pork barrel fund.
Labour's policy might sound alright until you realise the word rich just means anyone who is actually productive.

By the way National are no better effectively selling the next generation into serfdom.

At least this exposes the Green Party as a social issue party and not an environmental issue party. Not a peep from them when their government changes policy to favour the use of motor vehicles and extend the life of unsafe, dirty, gas guzzlers.

Well as an owner of old and new cars it will be interesting to see how the total price changes. I will be surprised if the total cost is less, but then my confidence in Labour is pretty much shot to bits.