As New Zealanders face rising costs of living, ACC's proposed levy hikes threaten to add another financial burden. It is time for a critical look at our accident compensation system. 
 
ACC proposes cumulative levy increases of 14% for work and earners' levies and 24% for motor vehicle levies from 2025 to 2028. These increases will further strain businesses, workers, and vehicle owners during challenging economic times.  
 
While the government seeks to restrain its operating spending and calls on local government to focus on 'doing the basics brilliantly', ACC must do likewise. 
 
Adding to the need for change came yesterday’s release of the government’s financial statements for the year to June. They revealed that ACC contributed to a bigger fiscal deficit by having higher costs to settle claims and by charging levy payers less than the annual cost of claims. 
 
As a monopoly provider, ACC lacks competitive pressure to improve efficiency. Levies should be risk-based and provide accurate price signals, but ACC is often treated more like a welfare agency than an insurance scheme, driving up costs. The Earners' Account is below its funding target and is forecast to deteriorate further. In the Motor Vehicle Account, motorcyclists are heavily subsidised by other vehicle owners.  
 
In ACC's 50-year history, a brief period of competition in 1999-2000 showed promising results: lower premiums, reduced cross-subsidies, and improved accident and rehabilitation rates. Yet, political changes cut this experiment short before its full potential could be realised. 
 
Despite stricter health and safety regulations, New Zealand's injury rates remain concerningly high. We must question whether ACC's current structure truly supports or hinders safety improvements. As the government reviews work health and safety regulations, it needs to consider ACC's role in the system. 
 
ACC levies should send sharp pricing signals on risk and safety experience to encourage safer practices. This could reduce reliance on regulations many consider to be neither clear, sensible, proportionate, or effective. 
 
As ACC marks its 50th year, it is time for a comprehensive review. The government should explore options for increased competition and efficiency to create a more sustainable and effective system; a system that is more fiscally responsible and better serves businesses and individuals while improving health and safety outcomes. 
 
Nick Clark's submission, 2024 ACC Levy Consultation, was lodged on 9 October.​