New Zealand’s Accident Compensation Corporation (ACC) expects a surplus of $NZ2.5 billion ($1.9 billion) for the 2010/11 financial year, which will enable it to reduce its deficit and reduce levies on employers.

The ACC is a monopoly that administers New Zealand’s no-fault personal injury scheme. It is running a deficit after incurring losses in previous years, and faces competition when the Government allows private insurers into the market.

ACC Chairman John Judge says the surplus will enable the ACC to reduce its net deficit from $NZ10.3 billion ($7.9 billion) last year to around $NZ7.8 billion ($6 billion]), but there is still a long way to go to reduce the remaining deficit. Mr Judge says the improved performance is due to better rehabilitation systems, enabling people to get back to work sooner, and improving investment returns.

“It has also been important that the ACC has stuck more closely to its legislation than was perhaps the case in the past,” he said.

ACC Minister Nick Smith last week told Parliament’s Transport and Industrial Relations Committee the surplus means “there is room to reduce levies for wage-earners and businesses due to ongoing improvements in the ACC’s finances”.

The Government plans to open personal injury cover to the private sector from October next year, when employers will be able to choose from the ACC or private insurers when purchasing work-related personal injury insurance.

The ACC received 1.6 million new claims during the year.