The Motor Vehicle Account
|We propose increasing the average Motor Vehicle levy from $113.94 to $120.20 in 2022/23, $128.83 in 2023/24 and $138.08 in 2024/25.|
The levy collected for the Motor Vehicle Account is used to support injuries from motor vehicle crashes that happen on public roads.
Recovery from injuries that result from motor vehicle accidents generally take longer with a higher proportion of injuries requiring support for ten or more years.
Some people’s injuries are so severe a full recovery will never be possible. In these cases, our work is focused on supporting the best life possible.
The proposed changes and background information are outlined below. For a more in-depth look at how we arrived at the recommended levy rates, see our detailed pricing report.
Road safety initiatives
Drivers for proposed levy increase
The key drivers behind the proposed increase in the average motor vehicle levy rate has been:
- lengthening recovery periods for workers injured in road crashes
- the increasing cost of caring for those who are seriously injured (e.g. brain and spinal trauma).
The impact of these cost pressures has been partially offset by the changes to the Funding Policy Statement in 2019 which removed the use of a risk margin when assessing the lifetime cost of claims (a risk margin increases the estimate of these costs). Changes in economic factors (inflation, risk free discount rates and investment returns) have had a negligible impact on the levy rates.
Collecting the Motor Vehicle levy
Motor Vehicle levies are paid in two different ways:
- petrol at the pump – currently at 6 cents per litre
- part of the vehicle licence (registration) fee.
Vehicle registration is cheaper for owners of petrol-powered vehicles than owners of diesel vehicles because they also pay a petrol levy. The average levy collected for an equivalent vehicle is the same whether it is petrol or diesel powered.
Different rates for different vehicle classes
We don’t charge a standard or ‘flat’ levy rate for every vehicle on the road. We group vehicles into ‘vehicle classes’ ranging from vintage cars to heavy goods vehicles. We believe it’s fairer that owners pay an amount that reflects the risk of their class of vehicle.
When recommending levy rates for each motor vehicle, we take the last seven years of data from the Police crash analysis system and:
- match it to our injury data
- then determine the risk of each motor vehicle class, compared to the risk of other vehicle classes.
Motorcyclists have little protection in a crash, which contributes to the cost of supporting recovery from injuries for riders and their passengers.
We require $374 million (equivalent to $1,360 per motorbike) to support injured motorcycle riders and their passengers to recover from the injuries we expect over the next three years.
Over several consultation periods, we have sought a levy contribution from motorcycle owners that is not prohibitively expensive.
Electric vehicles and plug-in hybrid electric vehicles
Light electric vehicles are levied through vehicle registration at the same rate as petrol-driven vehicles.
For the 2022-25 levy period, electric vehicles and plug-in hybrid electric vehicles will continue to be classified as petrol vehicles for levying purposes. This results in a 57% lower levy in 2022/23 for pure electric vehicles compared to other non-petrol powered light vehicles. This is to help incentivise the uptake of electric vehicles.
Our recommended levy rates
The recommended motor vehicle class rates are set out below. The petrol-powered vehicle classes have been set using the recommended 6 cent per litre petrol levy (unchanged from the current year).
Motorcycle Safety Levy
The Minister for ACC has confirmed that the Motorcycle Safety Levy will continue to be collected at the current rate of $25 each year, per motorbike or moped, to allow further targeted funding in motorcycle safety.
The Motorcycle Safety Levy is therefore not being reviewed in this consultation.