New Zealand’s Accident Compensation Corporation (ACC) is on target to deliver levy cuts worth $NZ500 million ($463 million) from next year.

It forecasts drops of about $NZ375 million ($348 million) in 2016/17 and $NZ120 million ($111 million) in 2017/18.

ACC Minister Nikki Kaye says final cuts for motor vehicles, self-employed people and employers will be known only when a public consultation is finished.

“We are committed to providing at least $NZ500 million ($463 million), and that the reductions will be across three accounts – motor vehicle, work and earners,” Ms Kaye said. 

“The final decisions on levy reductions will also have to factor in any updates in forecasts in costs and solvency, such as economic conditions and the ACC’s performance. 

“The exact amounts each year may vary depending on the consultation and considering other issues such as the residual levy being removed.”

Ms Kaye plans to introduce legislation to install a new levy-setting framework from 2016/17.

“This legislation… will deliver greater transparency around the levy setting process and more stable levies over time,” Ms Kaye said.

“There has been an inconsistent approach to levy setting, marked fluctuations in levy rates and some confusion about the factors driving final decisions on levies.”

The new legislation includes binding requirements to maintain adequate funds against economic headwinds. The ACC will be required to publicly report the long-term impact of levy decisions made by the Government.