ACC motor vehicle levy to increase by $32

ACC Minister Nick Smith today announced a $32 increase in the motor vehicle levy from 1 July 2009.

The motor vehicle license fee for a petrol car will increase from $136.44 to $168.46 and the ACC petrol levy will rise from 9.34 cents per litre to 9.90 cents per litre.

"This $32 increase comes at a tough time for motor vehicle owners, families and businesses and is on top of a $50 increase last year, "Dr Smith says. "It is the bare minimum needed to fund the cost of motor vehicle accidents while maintaining an acceptable level of solvency in the account. An increase of $121 to $376.48 is what officials had advised would be required to fully fund the Motor Vehicle Account based on the latest report liabilities, the existing law, and funding policy.

"The motor vehicle levy rate largely reflects an increase in the cost of treating and rehabilitating the seriously injured - especially home support.

"While the Government is committed to helping the injured, ongoing large increases in ACC are not affordable. That is why the Government is embarking on a programme of ACC reforms to contain costs, push out the full funding date, and achieve greater flexibility in funding mechanisms for the Motor Vehicle Account.

"I am confident with the changes the new Government is making in ACC that such large increases will not be repeated again next year."