Hot Topic
EARNINGS
The government confirmed today it is cutting accident compensation levies despite no reduction in the scheme’s long-term liabilities.
ACC Minister Nick Smith confirmed the average employer and self employed ACC levy is to drop by 22%.
The work account, from which this is funded, has remained almost fully funded in the face of the ACC Corporation’s recent financial difficulties.
Wage and salary earners have a 17% reductions. Levies for the motor vehicle account, which has experienced greater difficulties, is unchanged.
The Accident Compensation Corporation reported a surplus for the year of $3.5 billion.
However the scheme is still a long way from being in a strong financial state.
The outstanding claims liability (OCL), which blew out dramatically several years ago, has stopped increasing but it still at just above $24 billion (see graph) and has thus far shown no signs of decreasing.
Rob Hosking
Wed, 12 Oct 2011
Wed, 12 Oct 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
ACC’s $25 billion liability remains – but govt cuts levies
17339