New Zealand’s Accident Compensation Corporation (ACC) will reduce compulsory levies on employers and workers next year after reporting a surplus in 2010/11.

Chairman John Judge says the net surplus of $NZ3.5 billion ($2.7 billion) at June 30 will be used to reduce the ACC’s outstanding deficit – the gap between assets and liabilities – from $NZ10.3 billion ($8 billion) to about $NZ6.8 billion ($5.2 billion).

It is the second year of surplus since the corporation reported a $NZ4.8 billion ($3.7 billion) annual deficit and a $NZ13 billion ($10 billion) outstanding deficit in 2008/09, which led to major changes in its administration.

The Government wants to open the compulsory system to the private sector, giving employers a choice of the ACC or private insurers for workplace cover. The ACC says no timeframe has been announced but it can adapt if competition is implemented.

Little mention of privatisation was made in the ACC’s annual report released last Wednesday, but ACC Minister Nick Smith told New Zealand media the Government might also allow private insurers to offer motor vehicle and non work-related injury cover.

The corporation will reduce the average levy paid by employers and self-employed people into its work account, which covers workplace injuries, from 1.47% to 1.15%.

The levy paid into the earners’ account, covering non-workplace injuries and paid by employees and the self-employed, will drop from 1.78% to 1.48%.

The levy on motorists, collected via licensing fees and a 9.9 NZ cents a litre levy on petrol, will not change.

Mr Judge says the surplus is a result of improved rehabilitation rates and increased returns on the investment portfolio, which averaged a 12.6% return last year.

CEO Jan White says the surplus was achieved despite the impact of a depressed economy, the Pike River coalmine tragedy and more than 10,000 claims from the Christchurch earthquakes.