The PM said the move would ensure “Kiwis aren’t being charged more” for ACC without a good reason, and that the annual license and petrol levy will not increase.

The Government has knocked back a proposed increase in ACC motoring levies.

It has also decided to do away with the current rules that mean it is cheaper to register cars that have a higher safety rating, and more expensive to register cars that are deemed less safe.

Prime Minister Jacinda Ardern and ACC Minister Iain Lees-Galloway said the Government had decided to keep the average motor vehicle levy, which is raised from an annual car registration fee and a levy on petrol, at $113.94 a year.

MONIQUE FORD/STUFF The Government says a decision to reduce the ACC Work Levy will save New Zealand businesses $100 million over the next two years.

ACC had proposed increasing the levy to $127.68 through an increase in the car rego levy, after Lees-Galloway earlier signalled no appetite for pushing up petrol prices, but has been knocked back.

A compelling case was needed for ACC's originally proposed recommendations to be accepted and Cabinet could make a much broader consideration based on public interest, Ardern said.

"It was clear many motorists at the time were feeling a lot of pain at the petrol pump."

Cabinet was not bound to follow ACC's recommendations: "We considered the wider public good ... including cost of living considerations."

When making its final decision on levy rates, Cabinet took on board the public feedback, which was "fairly overwhelming," she said.

ACC was an important scheme and it was essential the Government ensured its ongoing viability, she said.

"We have done that today while also looking at the interest of consumers."

Lees-Galloway said the so-called Vehicle Risk Rating programme was ineffective, hurt people on lower incomes and would end.

"There is no evidence that variable levies based on VRR contribute to injury prevention or encourage the purchase of cars with higher safety ratings," he said.

"It also loads more of the burden onto low-income people and families, as they are generally less able to buy cars with the best safety ratings.

Ardern and Lee-Galloway said they had decided to reduce the ACC Work Levy in a move that will save New Zealand businesses $100 million over the next two years.

The average work levies paid by employers and self-employed people will decrease from 72 cents to 67 cents per $100 of liable earnings.

All other ACC levies would be held at their current rate, they said.

Ardern said the Government was determined to ensure Kiwis were not being charged more without reasonable cause, while lifting wages for New Zealanders.

"We have done just that and concluded that the levies would not increase, and actually decrease for work levies paid by employers and self-employed people. This will save New Zealand businesses and their customers around $100 million over the next two years compared to current rates."

The Government had been guided by advice from the Ministry of Business, Innovation and Employment and the Treasury in making the decision, she said.

"This Government is committed to keeping ACC levies fair for businesses, workers and motorists, and no higher than needed to meet the real costs of injury claims."