7 Mar 2009

Motorists would refuse high registration costs, says AA

8:36 am on 7 March 2009

The Automobile Association thinks motorists will stop registering their cars if the cost jumps too much.

The Government uses money paid for motor vehicle registrations to fund ACC.

It has released figures showing costs for people, business and the Government will balloon, unless significant changes are made to the Accident Compensation Scheme.

ACC Minister Nick Smith will not say what this year's increase in motor vehicle registrations will be, but officials have advised that a rise of $125 would be needed this year to keep up with costs.

Automobile Association general manager of motoring affairs Mike Noon says that would be too much to pay and he thinks motorists will refuse to pay their registration.

ACC was a pay-as-you-go scheme until 1999 when it was extended to include the lifelong cost of injuries.

Since the law change, motor vehicle registrations have been used to fund the shortfall for claims filed before 1999.

These were due to be repaid by 2014 and Mr Noon says the AA has been lobbying the Government to extend the repayments until 2019.

This would reduce the size of the levy and relieve the amount motorists have to pay, he says.