ACC needs to lift its own performance before lifting levies - Minister Matt Doocey

• ACC is proposing increases to levies to cover rising injury numbers and costs
• Minister says he expects ACC to lift its own performance before charging taxpayers more
• Labour says government is cutting roles that prevent injury in the first place

The ACC minister says proposed increases to levies are just that at this stage: proposals.

The Accident Compensation Corporation has started a one-month consultation on suggested rises of more than 7 percent for motorists, and more than 4 percent for employers and earners.

It has also suggested changes to classifications that would raise levies for motorcyclists, EV owners, professional sportspeople and ballet dancers.

Under the proposal, the average work levy rate would increase from the current rate of $0.63 per $100 of payroll to $0.66 in 2025/26; $0.69 in 2026/27; and $0.72 in 2027/28.

The earners' levy would increase from the current rate of $1.39 per $100 wages to $1.45 in 2025/26, $1.52 in 2026/27; and $1.59 in 2027/28.

The motor vehicle rates would increase from $113.94 per vehicle currently to $122.84 in 2025/26; $131.94 in 2026/27; and $141.69 in 2027/28.

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Minister for ACC Matt Doocey said the proposal was part of a legislative requirement every three years, and Cabinet would make final decisions in December.

He said it was a "fair question" whether the changes would be palatable to taxpayers at a time they were struggling with the cost of living.

"I'm mindful that any cost to Kiwis at the moment is going to be difficult. It's going to hurt them in the back pocket," he said.

Doocey wanted ACC to "lift their game" before increasing levies.

"My clear expectation with ACC is they need to lift their financial performance. They need to look at how they can increase their rehabilitation rates. They need to do a lot better around injury prevention," he said.

"So I think before they go and look at proposing to put levies up, they've also got to make sure they're spending taxpayers' money well as well."

Labour ACC spokesperson Rachel Boyack said the minister's expectation ACC improved its injury prevention work came at a time when ACC had cut roles in injury prevention.

"Injury prevention is one way that the government could save on ACC costs, but instead, they've actually cut that work. So they cut roles that look at fall prevention, they cut roles that look at preventing sexual violence. And the biggest cut they made was to cut a forestry safety programme," she said.

"And so putting increased costs through levies onto workers when they are cutting the programmes that can help prevent injuries happening in the first place is just showing that this government has their priorities all wrong."

Boyack said investing in injury prevention meant ACC would save money in the long run, through a reduced number of claims, reduced compensation being paid and a reduced need for rehabilitation.

Doocey said some of the changes were around simplification, to ensure there was a better fairness of risk.

"At the moment, with motorcyclists, the ACC levy covers only around 28 percent of their costs to the ACC scheme, and part of the proposal was looking at how that may be increased to cover a greater cost," he said.

Doocey said that may include lowering the levy for lower-powered motorcycles, while increasing the cost for more powerful bikes.

On Wednesday, ACC chief executive Megan Main said the proposed changes were needed to ensure future generations were not carrying the cost of current claims.

ACC's funding comes from levies and earnings from its investment fund. However, it was facing a shortfall of somewhere between $1 billion and $2 billion.