ACC’s fee hike request faces tough scrutiny

The Government looks set to knock back a request from the Accident Compensation Corporation to increase its levy on petrol by almost 2 cents a litre.

ACC said it wanted to increase its levy on petrol by 1.9 cents a litre and raise the average annual levy on car registrations from $113.94 to $127.68 per year.

The increased charges would apply from July next year and would represent a price rise of 12.1 per cent on its existing levies.

But the levy changes would need to be approved by the Cabinet, and ACC Minister Iain Lees-Galloway said ACC would need to make a ‘‘very, very strong case for why they think now is the right time for petrol prices to go up’’.

‘‘We know families across the country are facing rising living costs.

‘‘When Cabinet comes to consider these proposals that is something that we will definitely be taking into account.’’ Lees-Galloway said the Government would take any case ACC made ‘‘on board’’ but signalled its ear might lie elsewhere.

‘‘I can assure everyone that this Government is very well aware of the cost pressures that New Zealanders face.

‘‘We are able to take that into account when we make our decision about ACC levies and we will,’’ he said.

The price of petrol went above $2.40 per litre in many parts of the country for the first time this week on the back of rising oil prices. A rise in excise tax is expected to push up the price of petrol by 4c a litre from Sunday.

ACC cited increased costs for care and support workers ‘‘resulting from the pay equity settlement agreed by Government’’ as one reason why its levies needed to rise.

ACC also wants to increase levies paid by workers by 2.5 per cent but levies on employers should fall 6.9 per cent, it has suggested.