KEY POINTS:
Labour is promising to cut motor vehicle registration costs if it is re-elected this year.
The current Accident Compensation Corporation motor vehicle levy, which covers the cost of all injuries involving vehicles on public roads and makes up the bulk of a car registration cost, is $254.
The ACC last month issued a consultation document proposing to raise that cost to $287 before the end of the year. But Labour said yesterday that if the ACC move succeeded, it would support an immediate law change to reduce the rate by $84, to $203.
Vehicle registration costs also include an annual vehicle licensing fee and a petrol levy.
ACC Minister Maryan Street has said petrol and food price increases and high interest rates had created additional spending constraints on families this year.
If rates were raised, more people may fail to register their vehicles, she said.
Labour would also reduce the ACC employer levy by 25 cents from $1.26 per $100 of liable earnings.
Prime Minister Helen Clark and Ms Street announced in a joint statement yesterday that ACC would be kept in public ownership if Labour won the election. This would reduce the pressure on levy rates.
The Government had made significant improvements to ACC over the last nine years, including increasing the cover it offered to older people and those suffering mental injury after witnessing a traumatic event at work.
"National votes against those improvements," they said. "There can be no doubt that its plans to privatise ACC would result in private insurance companies lobbying to reduce the coverage the scheme gives to injured people."
ACC wants to increase the levy because of rising claim numbers, medical and surgical costs, rehabilitation rates and personal support costs and ACC's low investment returns.
Motor vehicle injury claim costs rose from $288 million in 2006 to more than $359 million last year.
