Media release from ACC Minister Nick Smith

The Government's Accident Compensation Amendment Bill passed its third reading in Parliament today with the support of the ACT and United Future Parties.

"ACC claim costs have risen 57% in the past four years - five times the rate of inflation - and the unfunded liabilities have grown from $4 billion to $13 billion.  This law change is necessary to ensure ACC is affordable, sustainable and fair for claimants and levy payers," Dr Smith said.

"The scale of levy increases required this year without these law changes would be crippling for workers, motorists and businesses.  These law changes enable the levy increase this year for the average worker to be reduced from $550/year to $150/year, for motorists from $104/car to $30/car, and for businesses from a 44% increase to a 12% average increase in employer levies."

"These law changes are about a balanced approach between the rights of ACC claimants and other New Zealanders who do the paying."

The law changes include:

• Extending full funding date from 2014 to 2019
• Reversing 2008 income compensation extensions covering casuals, part-timers, non-earners and abatement of holiday pay
• Reversing vocational rehabilitation changes
• Introducing 6% hearing loss threshold
• Reversing entitlements for wilfully self-inflicted injury and suicide
• Strengthening disentitlements for criminals
• Enabling safety incentives for employers and vehicle owners
• Requiring more open reporting on ACC's finances

"This law change represents the stop-gap measures to prevent ongoing ACC losses.  More work will be required to secure the long-term future of ACC as a fair, efficient 24/7 no-fault insurance scheme for all New Zealanders."