Bay of Plenty vehicle owners are set to save an average $135 annually from July 1 next year, when Accident Compensation Corporation levy cuts come into force.

Dropping the motor vehicle levy is part of a Government announcement this week of slashing ACC levies worth $480 million, as signalled in the 2014 Budget.

The ACC motor vehicle levy is set to drop from July 1 next year, saving the avergae vehicle owner $135 annually.

Rotorua MP Todd McClay says reductions to motor vehicle levies in 2015/2016 will see the average levy fall from about $330 to $195 – offering the average vehicle owner a $135 saving.

'This includes reductions to the licence fee and a drop of three cents per litre off the petrol levy.”

Todd says the cut is positive news for and businesses and will be welcomed by many that have raised concerns over the cost of ACC levies.

The move also follows last year's cuts, which were expected to save households up to $200 a year, says Todd.

'These savings are thanks to continuing improvements in ACC, which have provided an opportunity for significant levy reductions to benefit employers, the self-employed, families and households.”

In the last levy round significant reductions were made to the Work and Earners' Accounts, but this year's focus is on reductions to the Motor Vehicle Account.

The Government will also introduce risk rating for light passenger cars, placing vehicles into bands based on their crash safety ratings.

Owners of petrol-driven cars in the safest grouping will see the ACC component of their annual vehicle licence fee fall by 66 per cent.

'These are good savings and means this money can now be spent on other necessities.

'Overall these reductions to Work and Motor Vehicle levies represent an annual saving of $480 million to New Zealand households and businesses in the 2015/2016 levy year,” says Todd.