Petrol rise part of ACC plan

Motorists face a huge rise in ACC levies under proposals put to the Government yesterday - including one to increase the cost of petrol.

The proposed 22 per cent levy rise means motorists would be hit with an average bill of $207.26, an extra $37.59 a year.

The Accident Compensation Corporation says in a discussion document on proposed levies for the 2004 financial year that the increase is needed to cover the escalating cost of motor vehicle injuries.

Its account covering motor vehicle injuries was $1.44 billion in the red at June 30.

The increase in road accident costs is due mainly to higher medical and ongoing rehabilitation bills as survival rates improve.

ACC proposes increasing the petrol tax as one option for collecting the levy for petrol-powered vehicles.

Under this scenario the existing component of the levy paid through the vehicle relicensing fee would be scrapped.

The result would be more expensive petrol but cheaper vehicle registration fees.

Though the proposal is one of several, ACC says that regardless of which option is chosen, the cost to motorists will increase 22 per cent.

George Fairbairn, secretary-general of the Automobile Association, said: "There will be a lot of concern and frustration after the increase last year that was intended to address underfunding from earlier years was not sufficient, and now there is a significant increase this year."

The option of collecting the levy through a petrol tax could be fairer to those who drove short distances, he said.

Those who travelled more paid more.

The ACC levy paid by wage and salary earners would remain unchanged at $1.20 for every $100 earned under the proposed funding options.

But the average levy paid by employers would reduce to $1.12 from $1.20 for every $100 of payroll.

The self-employed would also pay less - an average levy of $3.09 compared with the present $3.17 for every $100 of liable earnings.

ACC also suggests removing the co-payment charged by many medical providers to cover the shortfall between ACC's contribution for consultation and the practitioner's fee.

Based on present claim numbers, the estimated cost to ACC for paying the full cost of medical treatment and removing claimant co-payments for new claims is $200 million across all ACC accounts.

- NZPA