ACC recommended levy cut
The Accident Compensation Corporation recommended lowering its levies earlier than the Government chose to, chairwoman Paula Rebstock says.
Levy reductions were announced earlier this week, kicking in immediately for employers and workers.
Questioned by Labour ACC spokesman Iain Lees-Galloway at ACC's financial review at Parliament's transport and industrial relations select committee today, Rebstock said the ACC board had advised the Government to lower the levies earlier.
"In our view, looking at things the board looks at, yes, we did [advise an earlier reduction]," she said.
She did not say the Government had rejected the advice, but that the corporation wanted stable levies and erratic rates were not good for anyone.
Lees-Galloway said the workers' and earners' accounts were now funded at about 126 per cent of the funds needed and asked how long they had been over 100 per cent.
"There's a question about whether they are fully funded at that point," Rebstock said.
"The question [of funding levels] is open to a lot of debate. We believe we are fully funded and the scheme is not overfunded at this stage."
Lees-Galloway asked whether levy-payers had been overcharged because the corporation was intent on reaching its full funding target before its 2019 deadline.
"I don't think they have been," Rebstock said.
ACC Minister Judith Collins said this week workers' and employers' levies would be lowered immediately, leaving $387 million in the pockets of employers and workers in the 2014-15 year.
That would amount to about $200 a year for the average household and $180 a year for small businesses.
Larger employers would receive a cut of on average $6000 a year.
The employers' levy would drop 17 per cent to 95 cents for every $100 of liable earnings and the workers' levy would drop 15 per cent to $1.45 for every $100 of earnings. Both are in line with ACC's recommended reductions.
National select committee member Mike Sabin criticised the Opposition for focusing on the issue of levies instead of the broader performance of the corporation.
"There's been slightly one-dimensional questioning, not surprising coming from the Opposition, around levies and the balance sheet," he said.
"There are other areas which go towards performance."
This story has been updated to correct some figures.