ACC $1,300 to $2,000 a year

As expected, the increase in ACC levies is less than proposed, but are enough to stop the unfunded liabilities increasing.

What I find interesting is that the average worker now pays $1,300 a year in levies. That is a huge amount of money. If workers paid it directly, I suspect there would be far far more support for reducing the costs of ACC. But workers pay it in three ways – through the employee PAYE levy, petrol tax and vehicle registration levels.

On top of that is the employer levy. Ultimately workers pay for this also, through lower wage levels. Employers factor the total cost of employment into decisions on staffing and wage levels. This is another $700 a year

So the average worker has $2,000 paid to ACC. The average after tax income is around $40,000 so ACC consumes around 5% of take home pay.

Over a worker’s life, they pay a huge amount of money into ACC. Are they getting value for money? I have my doubts. Of course it is the nature of accidents that some will be injured more than others, and need more support. But I suspect for 95% of levy payers, the benefits they get from ACC are miniscule compared to their lifetime contributions.

The Government has started off in the right direction by trimming some of Labour’s expansions to the scheme. I hope they continue to trim.I’m all in favour of families not being left starving when an income earner is unable to work due to an accident. I am more sceptical about ACC funding the myriad of providers of different medical services from counselling to physio. I’d rather we fund them through Vote Health for low income families rather than have someone on $100,000 get free phsyiotherapy for their skiing injury.

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