ACC Minister Nick Smith has announced ACC will cut employee levies by 17% or NZ$340 million a year and will cut employer levies by 22% or NZ$247 million from April 1 next year after ACC reversed massive deficits by reducing claims costs 15%.
“These significant levy reductions are good news for families and businesses and are affordable because of the prudent management of ACC’s finances,” ACC Minister Nick Smith said.
“These levy reductions are affordable because we have reversed ACC’s large deficits of $2.4 billion in 2007/08 and $4.8 billion in 2008/09 with surpluses of $2.5 billion in each year since. The big turnaround is because ACC’s annual claim costs, which grew by 50% between 2005 and 2008, have since been reduced by 15%. Improved rehabilitation has seen a 20% reduction in the number of people on long-term compensation, which is ACC’s biggest cost," he said.
“We are on track to achieve 100% solvency in the Earners’ and Work Accounts in the next year enabling levy reductions for employees and employers. Reductions in motor vehicle levies are not affordable yet because solvency in that account is only at 66%.”
The Earners' Account Levy (paid by wage and salary earners) is proposed to decrease from $2.04 to $1.70 (including GST) and the average Work Account Levy (paid by employers and the self employed) is proposed to decrease from $1.47 to $1.15 (excluding GST) per $100 of liable earnings from 1 April 2012.
Work levies for individual companies depend on their industry classification and experience rating.
Submissions and comments on the proposed levies are to be made by 15 August to enable ACC’s Board to make its final recommendations to the Government.
Final levies for 2012/13 will be determined in September.