The Accident Compensation Corporation (ACC) is proposing significant increases to its levies, with a rise of over 7% for motorists and more than 4% for employers and earners. This decision comes in response to a continuous increase in the number of injuries and the associated treatment costs.
Automobile Association (AA) principal policy advisor Terry Collins emphasised the importance of the ACC maintaining financial sustainability to ensure ongoing support for people injured 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,” Collins said.
ACC is proposing changes to the levies for various categories of vehicles, including motorcycles. The AA will then be assessing whether the proposed changes in levies were appropriate and will suggest alternative options.
Alan McDonald, the head of advocacy at the Employers and Manufacturers Association (EMA), expressed frustration over the fluctuating nature of the ACC funds. He noted a recurring cycle where the ACC experiences periods of financial stability followed by significant deficits.
McDonald highlighted the importance of mitigating these fluctuations, aligning with the AA’s perspective that gradual, consistent increases in levies are preferable to sudden, large hikes after extended periods. He emphasised that ACC must adapt to rising costs, particularly the recent sharp increases in medical expenses.
While he welcomed ACC’s decision to raise levies over the next three years, making adjustments easier for employers and workers, he acknowledged that many association members would view this as an unwelcome additional burden.
ACC chief executive Megan Main addressed the rationale behind the proposed increase in levies, emphasising that the adjustments are necessary to maintain fairness within the scheme and to align funding with the actual risk of injuries.
Main noted that, for instance, motorcyclists were disproportionately involved in costly injuries, while injuries among ballet dancers were comparable to those of rugby players.
Rehabilitation performance has been steadily declining, leading to an increasing number of injured individuals needing longer periods away from work. Additionally, delays in the healthcare system are also contributing.
Megan Main said ACC is dedicated to improving rehabilitation performance and outcomes for injured individuals.
