Smith defends $32 ACC rise

National is continuing to highlight the financial problems at ACC, firstly raising the motor vehicle levy by $32 and then releasing a report showing the corporation failing to meet its own performance targets.

ACC Minister Nick Smith said the increase on the motor vehicle levy "illustrates why we need to make wider change within ACC" as the Government continued its campaign to justify cutting back the scheme.

The $32 rise, which motorists pay with their yearly registration, follows a $50 rise last year.

Dr Smith said the rise was a "fraction" of the $121 that officials had recommended to fully fund the part of the scheme that covers the cost of motor vehicle accidents.

But Labour's ACC spokesman David Parker said Dr Smith had initially threatened bigger increases to trick the public into being happy with the $32.

Dr Smith then released a report showing ACC failing to meet its key performance indicators in seven areas.

Dr Smith said these included long-term rehabilitation rates declining and long-term weekly compensation payouts increasing. "By anyone's measure this is not good and that's why the Government is making changes," he said.

National has been highlighting different problems at ACC since last year to justify its planned changes, which it says will include cutting back the entitlements in order to bring costs under control.

This week Dr Smith sacked the ACC chairman, former union chief Ross Wilson, replacing him with former Ernst and Young chief executive John Judge.

Mr Parker released a letter Mr Wilson wrote to Dr Smith last week, that showed the board was frustrated at being "gagged" while ACC's financial performance was criticised.

The letter described the board's financial decisions as "excellent", and said ACC's financial issues were not a result of mismanagement but other pressures such as the global recession.

Mr Wilson's letter warns Dr Smith to stop inferring the deterioration in ACC's financial situation is due to the board.

Mr Wilson also rejected criticism that ACC should have done more to disclose holes in funding, saying it had informed everyone it should have and the failings were by other organisations.

Mr Parker said the letter was further proof "the Government has concocted a story of a so-called cost-blow-out driven by financial mismanagement, in order to gain public support to remove fundamental entitlements from injured New Zealanders".

GOING UP
ACC Motor Vehicle levy
* Annual licensing fee rises $31.97 to $168.45.
* Petrol levy rises by 0.56c to 9.9c per litre - an average of $118.55 a year.
* Total average levy rises $32.37 to $287.