ACC to Sting Old-car Owners

ACC Minister Nick Smith said the review would study whether basing the ACC levy on the safety ratings of cars could help drive down the $336 million annual cost of road crashes.

"I've seen information that the cost of motor vehicle accidents would be 40 per cent less if every vehicle on the road met a five-star safety rating. That's a huge difference and the question is whether that can be translated into a financial incentive for people to invest in safer vehicles."

It would be possible to connect vehicle registration with the make and year of a car, link that to a safety rating and a discount or extra premium.

He had also not ruled out investigating whether drivers should pay ACC levies according to their accident and infringement records, although that could be too complicated to implement without significant compliance costs.

Yesterday, he stressed that he had made no decision but said the focus would be on levies linked to car safety. However, financial incentives based on car safety ratings could be difficult to implement as New Zealand had a relatively old fleet and many people could not easily upgrade, he said.

Another stumbling block is likely to be the relatively small amount drivers would save on registration fees compared with the cost of upgrading cars.

At present, ACC levies account for $168 of the $246 annual registration fee. Only recent-model cars would be likely to meet the five-star safety standard requiring curtain-side airbags and electronic stability control.

The Government is examining whether to shift more of the ACC road levy from registration fees to fuel, so those who drive more pay more. The ACC component on petrol is 9.9 cents a litre, or $118 a year for the average motorist.

Motoring groups warned that it would be difficult to implement any safe-car incentives without penalising less-wealthy drivers.

The Automobile Association's technical services manager, Stella Stocks, said the AA welcomed initiatives aimed at improving safety, but incentives would not be easy to introduce fairly.

Clive Matthew-Wilson, editor of car buyers' publication the Dog and Lemon Guide, said poor people did not buy unsafe cars because they were unsafe. "They select unsafe cars because they're the only cars that poor people can afford."

Labour ACC spokesman David Parker said he would oppose a system that saw better-off drivers pay less because they could afford better cars, but he would consider more "sophisticated" proposals.

Dr Smith said the review would also look at whether to keep extra entitlements introduced by Labour. Free physiotherapy will be axed from November 1.

Source: www.stuff.co.nz