ACC levies might drop more than first thought - English

Up to $2 billion cut in ACC levies over two years | Sees skills shortage pushing up pay | Confirms return to Labour's auto-enrollment for Kiwisaver.

The Government is planning to reduce ACC levies by as much as $2 billion over the next two-three years, Finance Minister Bill English said today.

Speaking to Corin Dann on TV ONE’s Q+A, Mr English said that ACC has “by combination of things, including just doing a better job of rehabilitating people sooner” given the Government the opportunity to reduce levies substantially – “the equivalent of a four cent cut in the company tax rate.”

Mr English also told Corin that in the same two-three year time-frame, New Zealanders can look forward to higher pay increases.

Better economy + skills shortage = high wages
“The good news for the punter is that business confidence is at the highest it’s been at for many years.  That indicates that in their workplaces, there’s growing confidence that they can sell more, that profits are going to be up, that pay rises are coming.             

“There are some things that will force them to do it.  One is just their need to get hold of skilled people.  We’ve already got skill shortages in some areas.  As employment— As new jobs grow, you’re going to see more of that,” Mr English says.

Auto-enrolment in Kiwisave to return
If and when the Government returns to surplus, auto-enrolment in KiwiSaver will be re-introduced, says Finance Minister Bill English.

Mr English told Corin Dann that the Government was still committed to auto-enrolment, which would mean everyone not currently enrolled in KiwiSaver would be automatically signed up, with the option to opt-out.

But paying down debt would be the first priority, said Mr English.

“We’re still borrowing at $110 million a week, and before the next recession turns up, we want the government balance sheet to be back in a good position, that it can run up debt again if it has to or if we have another earthquake.”

Watch the full interview here.

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