2021 Levy Consultation > Should we increase the average levy for road injuries?

Recommendations to the Minister

Should we increase the average levy for road injuries?

The number of road accidents and costs of treatment/rehabilitation are rising. We propose to increase the average Motor Vehicle levy to reflect these costs.

Agree

384

Disagree

241

Responses

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.

Motor Vehicle Account detailed pricing report

Road safety initiatives

To help reduce the number and severity of motor vehicle related injuries, we’ve created road safety programmes for new drivers, motorcyclists, cyclists and people on scooters. These include:

Te Ara ki te Ora|Road to Zero
Supporting young Kiwi drivers with DRIVE
RideForever
Scooter Survival

These initiatives have had an impact on injury rates and costs. Highlights include:

ACC’s RideForever rider skills course which develops new skills that are effective at lowering the risk of having a crash by 27% and the associated claims cost by 45%
ACC’s partnership with Waka Kotahi (NZTA) to support young drivers which has saved $7.6m in costs over the past three years by preventing crashes that would have otherwise resulted in injuries.

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.

Cost to support injuries from crashes on public roads

A breakdown of the costs we expect for the 2023 to 2025 levy years are set out below.

Cost of supporting road crashes in the Motor Vehicle Account

Cost ($millions)	2022-23	2023-24	2024-25
Rehabilitation	366.4	379.2	393.5
Treatment	197.5	207.3	218.6
Compensation	324.6	342.5	362.9
*Subtotal for supporting recovery*	*888.5*	*929.0*	*975.0*
Savings from injury prevention	-9.1	-9.2	-9.0
ACC’s operating costs	9.6	9.9	10.0
Savings from management actions	-17.0	-24.5	-30.0
New Year Claims Cost	872.0	905.2	946.0

Dividing the above figures by the estimated number of vehicles we expect to be licensed each year results in the levy we must charge each vehicle on average each year. The table below shows how we have calculated the recommended levy rates to collect enough money to provide the support needed for people injured in road crashes.

Calculating the recommended levy rate

Levy for	2022-23	2023-24	2024-25
Supporting recovery	$216.17	$221.95	$228.77
Investment to prevent injuries	-$2.21	-$2.20	-$2.12
ACC’s running costs (incl. savings)	$2.33	$2.37	$2.35
Savings from management actions	-$4.14	-$5.87	-$7.04
New Year Rate	$212.15	$216.25	$221.96
Funding adjustment	-$91.95	-$87.42	-$83.88
Recommended levy	$120.20	$128.83	$138.08

The recommended Motor Vehicle levies next year are 43% ($378 million) lower than the full cost of supporting the new injuries. The use of the Account’s surplus funds reduced motor vehicle levies by a total of $1,089 million and the cap in the maximum levy rate change lowered the levy by a further $12.5 million over the three years.

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.

For example, a VW Golf is available as a petrol or diesel model and for levying purposes may be classed as a petrol-driven passenger vehicle or a non-petrol driven passenger vehicle. However, when average petrol consumption is factored in, they’re both likely to pay a similar amount over a year.

Motor Vehicle levies only cover accidents on public roads. We don’t include a levy in the price of diesel because diesel is often used in vehicles used exclusively on farms or for different purposes entirely, such as electricity generators or marine engines.

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.

The updated crash and injury data has shown that we need to update the relativities (the factor that compares the relative risk between classes of vehicles) for:

vintage, veteran and tractors (classes 3 and 6)
light goods service vehicles (classes 5L and 9L)
heavy goods service vehicles (classes 5H and 9H).

These classes of vehicles will experience a larger than average increase in 2022/23, as we adjust for new relativities as well as the increase in average levy.

Risk is determined by looking at the frequency of an injury and the average cost of supporting that injury (including compensation for lost wages) for each vehicle class.

This allows us to collect the funds required to support recovery from motor vehicle injuries more fairly.

Motorcycles

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.

The current levy rates for motorcyclists mean they contribute 27% towards the costs of supporting injuries sustained by riders and their passengers. We’re recommending this contribution level remains the same which means we’ll collect $102 million from motorcycle owners over the next three years.

The remaining costs of motorcycle rider and passenger injuries are funded by other road users. For example, the owner of a Ford Focus will contribute $20 to subsidise the cost of motorcycle injuries.

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).

Recommended Motor Vehicle class rates

		Current	2023	2024	2025
Average levy		$113.94	$120.20	$128.83	$138.08
Motor Vehicle Class Levies payable when the vehicle is relicensed each year
2	Petrol driven passenger vehicles	$46.04	$46.16	$54.52	$63.56
2A	Light electric vehicles (EV, PHEV, Hybrid)	$46.04	$46.16	$54.52	$63.56
3	Petrol driven tractors, vintage and veteran vehicles, and specified vehicles	$16.40	$25.41	$30.02	$34.99
4A	Petrol driven mopeds*	$99.33	$104.78	$112.31	$120.37
4B	Petrol driven motorcycles 600cc or less*	$297.91	$314.27	$336.83	$361.01
4C	Petrol driven motorcycles over 600cc*	$397.18	$418.99	$449.07	$481.31

5L	Petrol driven goods vehicles 3,500kg or less	$62.13	$80.23	$90.70	$101.99
5H	Petrol driven goods vehicles over 3,500kg	$224.22	$257.72	$277.63	$298.98
6	Non-petrol driven passenger vehicles	$104.65	$106.73	$114.37	$122.54
7	Non-petrol driven tractors, vintage and veteran vehicles, and specified vehicles	$36.91	$58.76	$62.97	$67.47
8A	Non-petrol driven mopeds*	$113.98	$118.77	$126.12	$133.99
8B	Non-petrol driven motorcycles 600cc or less*	$312.56	$328.25	$350.65	$374.63
8C	Non-petrol driven motorcycles over 600cc*	$411.83	$432.97	$462.89	$494.93
9L	Non-petrol driven goods vehicles 3,500kg or less	$120.75	$136.90	$146.69	$157.17
9H	Non-petrol driven goods vehicles over 3,500kg	$241.80	$275.41	$295.11	$316.21

* excludes the Motorcycle Safety Levy

	Current	2023	2024	2025
Motor vehicle levy on holders of trade plates
Holders of trade plates for trailers	Nil	Nil	Nil	Nil
Holders of trade plates for vehicles not classified elsewhere	$46.04	$46.16	$54.52	$63.56
Holders of trade plates for mopeds and motorcycles 60 cc or less*	$99.33	$104.78	$112.31	$120.37
Holders of trade plates for mopeds and motorcycles over 60 cc*	$397.18	$418.99	$449.07	$481.31

* excludes the Motorcycle Safety Levy

9H Non-petrol driven goods vehicles over 3,500kg
	Current	2023	2024	2025
Goods vehicles over 3,500 kg in the FleetSaver programme
5H Petrol driven goods vehicles over 3,500kg
Bronze level achieved	$200.04	$230.18	$248.12	$267.36
Silver level achieved	$163.77	$188.87	$203.85	$219.93
Gold level achieved	$127.50	$147.56	$159.59	$172.50
Bronze level achieved	$217.62	$247.87	$265.60	$284.59
Silver level achieved	$181.35	$206.56	$221.33	$237.16
Gold level achieved	$145.08	$165.25	$177.07	$189.73

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.

The Motorcycle Safety Levy supports delivery to ACC’s Motorcycle Safety Strategy through funding motorcycle safety related initiatives, such as the RideForever Programme or partnering with Waka Kotahi on roading improvements.

RideForever is aimed at giving riders sound information and access to training to encourage safer riders. RideForever coaching is working well.

Comparing a sample of approximately 3,000 riders, against a similarly matched control sample, one RideForever course reduced the incidence of having a crash by 27% and the associated claims cost by 45%. In other words, RideForever trained riders crashed less often, and any crashes they did have were less severe on average.

ACC has subsidised the bronze, silver, and gold RideForever courses by $249 and $125 for the urban and scooter courses. Riders that completed the course prior to 30 June 2021 may be eligible for a $200 rebate spread over two years, as part of the registration cashback programme, to reflect their status as a safer, trained rider. The cashback programme is currently under review.

Ride Forever

1 Sep 2021

Open for feedback

Tell us what you think about our proposals.

5 Oct 2021

Consultation closes

We’ll review and consider all feedback submitted to us.

Nov 2021

Recommendations to the Minister

Taking account of what you tell us, we’ll make recommendations on levy rates to the Minister for ACC.

Dec 2021

Final decisions by Government

The Government will make the decision on final levy rates, which will take effect next year and be in place for three years.

Agree

15%

Disagree

85%

15%

Agree

15%

Disagree

85%

If you did not build new real estate [Dunedin] the levies would not need to rise as much.

My main gripe is that, despite being told, even though it should be obvious to you, a driver's risk of an accident is related to how often they are on the road, not how many cars are in their garage as, please correct me if I am wrong, but we multiple car owners can only drive one at a time. It defies logic that the levy is applied to registration, when it should all be on fuel.

The situation with farmers, earthmovers etc. could be covered by going back to the old petrol rebate scheme.

Please think about this logically. Am I four times more dangerous because I own four vehicles?

I oppose the extra levy for motorcycles. I tried looking at other countries that treat motorcyclists as unfairly as they are in NZ and coul dnot find any examples. In most countries that are equivalent to us (e.g. Aus and UK) motorcyclists are charged the same ammount as other registered vehichles.

I was a Truck driver and used to travel the motorway of Auckland on a regular basis. What I saw most days was surely adding to costs of accidents. People on big bikes with sand shoes shorts and a singlet. Im doing 90kph and the bikes scream up, pass and gone. My proposal is change the law on motorcycle protective clothing so all of us that are responsible enough to wear our leathers etc dont have to pay for the idiots that are basically road naked. Make heavy fines possible and if a rider doesn't have appropriate gear then their motorcycle stays where it is until they have appropriate gear to carry on delivered or if that will take to long holding up a law enforcement officer then the motorcycle gets towed at owners expense. I get so annoyed with what I see and the fact It costs me a lot for registration all because of idiots that font gear up...

I agree with the need to raise more levy. I disagree with how the levies are divied up to motorcyclists.

Firstly, the stats for injury are inflated by including unregistered, unlicensed and untrained riders in them (i.e. farm vehichles and dirt bikes). Only a portion of the road accidents should be covered by motorcycle registrations if any at all.

Secondly, the motorcycle levy is unfair. The principle of road users paying for their fair share of injuries is not applied to all road users (e.g. cyclists). Not sure why it is applied t motorcyclists.

The popularity of e-bikes has shown that the public wants to use two-wheeled transport more than ever. However the high levies artificially restrict that demand. I belive that as technology evolves, more people will be encouraged to use heavily loaded e-bikes with multiple occupants (e.g. toddler carriers), ridden by inexperienced riders. This is going to lead to perverse outcomes for the health and safety of all New Zealanders if not managed appropriately.

ACC is a no-fault system. You are clearly targeting a group of users based on perceived higher risk. It is blatantly unfair how the levies are currently charged and yet you wish to increase these. For those of us who attend rider training and have multiple motorcycles we are penalised - and yet we are the ones who are 72% less likely to be in your statistics.

I suggest that your increases will have the opposite effect and you'll have plenty of unregistered motorcycles travelling on our roads as I have already noticed. Sadly those that break the law are not penalised.

These will also be the people reflected in your statistics. Why should I have to contribute to their rehabilitation when they won't take up training or continue to ride recklessly?

Fair is fair. And this case, it is not.

Are you forcing me to downgrade my motorcycle to an e-bike so that I can still have motorised propulsion without having to pay super-high registration costs? It seems that's what the nanny state wants.

I think it is discrimination against a small group of individuals
.motorcyclists all wear protective gear. Yet lycra clad Cyclists pay nothing not to mention all the sports Injuries. This system is biased, unfair and discriminatory

Motorcycle levy is now bonkers and you are proposing raising it more? Surely it would be fairer to just put the levy on fuel, that way it really is user pays.

Are you trying to price us off the road? Fuel is going up massively too so how can people afford anything anymore. Govt has spent billions during Covid so suck it up.

Absolutely not, it is already too high.
The one who pay the most ate the one who doesn't cost to the ACC.
The highest amount spent is on hand and teeth surgery, riders with proper big bike ride fully geared and pay max fees when riders with 50cc scooter, smaller bikes or push bike for that matter ride with nothing on and open Face helmet while paying nothing or next to nothing ! How is that fair. If you can prove that you spent money and own a proper gear to ride then the levy should be minimal, at the contrary the one who take the most risk should be the one who pay more. This will push people to have the ride gear on and diminish the amount spent in surgery when an accident happens.

I oppose this lazy attempt to cover ACC’s spiralling costs. It’s too easy to raise the levy on road bikes as it is easy to do through registration, however a significant proportion of accidents occur on unregistered vehicles (farm bikes, quads, dirtbike etc). Stop being so lazy and attacking the road riding motorcyclist (again). Either add ACC levies to the cost of a new off road bike or, if you really are intent on making ACC a user pays system, find a way to target other recipients of ACC funds like cyclists, skateboarders, rugby players etc. Your proposal is just lazy revenue gathering at the expense of a group who are easy to target and are unfairly deemed to cost ACC disproportionately to other ACC recipients.

Should make insurance mandatory for all vehicles and impound of vehicles not insured, for 10 days before crushing if no proof of insurance provided.

I don't know if this applies to me as a motorcyclist. I own a car and a motorcycle, of course I am only able to do one thing at a time. That is an age old discussion however, I ride a medium size motorcycle that is meticulously maintained... much like 95% of other motorcycles as they are our pride and joy. I wear great gear that is replaced every 3 years which has full D30 armor and is CE rated and ISO. I wear an airbag vest and a top notch helmet that is also replaced every 3-5 years and I complete 2-3 ride forever courses per year. For everything I do I pay over 400 per year. My father in law who rides a classic bike with drum brakes, of course no ABS and wears a helmet 10 years old pays about $30 per year.
What I'm getting at, the reason classic bikes are reduced is because they get used minimally however that is not really the case and, they are normally ridden by people who do not maintain their training because "I've been riding for years and don't need it" is the thing heard all of the time. I have been riding for 30 years and still maintain my training 3 times a year.

Motorcycles
- Have the following groups contribute to the cost: dirt bike riders, farm accidents on their property with unregistered vehicles, push bike riders & pedestrians
- Insure the person rather than the vehicle, i.e. a person with 5 motorcycles can only ride one at a time - charge the person once for Motorcycle ACC part of yearly registration
- Allow a discount for doing safety training
- Allow a discount for low risk people who have no or low number of accidents
- Contribute towards the cost of a motorcycle air bag
- Allow a discount for motorcycle air bag owners

If the increases are necessary then so be it, but first look at the operational costs associated with running the ACC scheme.

Yes, but exclude Pure EV

Rather than increasing the charge for all drivers, the majority of whom are not involved in accidents, the other contributing factors to accidents should be investigated and alternate ways found to more accurately distribute the cost to society.

i strongly disagree. how about some equity about the users that don't pay anything at this stage as numerous people have bought up , i'.e. electric scooters , they don't even have to wear a helmet but how much has ACC paid out on these accidents?

The roads have tar shiny and smooth No chip. On the trip to Burt this year 5 k out of Gore in the wet Two bikes went down on a straight road!!! In the wet .If you want to save ACC money spend it on the roads.Dangerous Roads no road chip!

Given that my 125cc scooter is around 450$ per annum for registration whilst my 28 year old 4.0 litre jeep it's around 90$
Is say that's extraordinarily unfair on the scooter.

Given the desire to reduce carbon footprint scooters should be promoted as should other motorcycle transport... cars are an environmental nightmare.

Put the whole lot on fuel costs and see a reduction in private car use.. reduce congestion making roads safer and sustainable.