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No Change For New Zealand ACC Levy

by Mary Swire, Tax-News,com, Hong Kong

14 December 2012

New Zealand's headline Accident Compensation Corporation (ACC) levies will remain unchanged for 2013/14, with the government minister in charge stressing that they must "err on the side of caution" in developing a long-term framework for the charges.

The ACC is a governmental agency which provides personal injury cover for New Zealand residents and visitors. It is funded by levies on earnings, business payrolls, the cost of petrol and vehicle licensing fees, and by government funding. Business levies consist of three elements. The ACC WorkPlace Cover (the work levy) uses payroll pay-as-you-earn details, while the Health and Safety in Employment levy is collected on behalf of the Department of Labour to enable it to fund occupational health and safety services. Finally, a residual portion of the work account levies is paid by businesses to cover the ongoing costs of long-term injuries that occurred prior to 2000.

The ACC levies in the Work and Earners’ Accounts have now been announced as unchanged for 2013/2014. The average levy per NZD100 (USD84) of liable earnings in the Work Account will remain at NZD1.15, and that in the Earners' Account at NZD1.70. The average ACC Motor Vehicle levy per vehicle will be NZD334.52. Levies were substantially reduced in 2012/13 by NZD630m, with a 22% reduction in the Work Account and a 17% reduction in the Earners Account. Average Work Account levies are now at an historic low.

In making its decision, the government considered recent volatility and continuing uncertainty in world financial markets and the effect these can have on the significant assets and liabilities held by ACC. The government also concluded that a reduction in ACC levies would have a direct impact on its operating balance.

According to ACC Minister Judith Collins: “Changes in economic conditions have been a major factor in recent deviations from ACC’s budgeted surpluses. Therefore, we have decided to err on the side of caution with a longer-term framework for levies."

Collins added: “This government is committed to rebuilding ACC’s long-term sustainability, so we can invest in its systems, its people and the services it delivers on behalf of all New Zealanders. That means making sustainable change over time, and reducing levies over a longer-term framework."

TAGS: tax | business | fees | payroll | New Zealand

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