ACC motor vehicle levy cuts confirmed

Last updated 13:52 05/08/2014

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Motorists will be $135 on average better off from next July after confirmation of cuts to ACC vehicle levies.

Vehicle levies will be based on safety ratings from next year, meaning those who drive safer cars will pay less, while employers will also receive a slight cut.

ACC Minister Judith Collins said today that the average vehicle levy would fall from about $330 to $195 a year from next July.

This included reductions to the licence fee and a drop of 3 cents a litre off the petrol levy, she said.

The average levy paid by employers and self-employed people into the work account will fall from 95c to 90c per $100 of liable earnings.

The reductions represented annual savings of $480 million to New Zealand households and businesses in the next financial year, Collins said.

She said the Government would introduce risk rating for cars, which would see light vehicles placed into bands based on their crash safety ratings, with owners paying levies relative to those safety levels.

"This will improve how the levy system reflects actual risk and cost of injuries."

Further cuts were likely the following year, she said.

Motorcycle and moped levies will remain the same.

The new ACC levy rates for motor vehicles will come into effect on next July 1, while the lower work account levy rate will do so from April.

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