Another WorkCover premium increase would push some already struggling Geelong businesses ’over the edge’

In an already tough operating environment for small and medium businesses, the Geelong Chamber of Commerce says some may not survive another increase in costs.

“Fundamentally broken” Premier Jacinta Allan in parliament this week. Picture: David Geraghty.

Another increase in WorkCover premiums will tip some Geelong businesses over the edge and halt important investment, the local industry association says.

Geelong Chamber of Commerce chief executive Jeremy Crawford said Victoria already had the highest business costs of any state and an increase in premiums would be the final straw for some employers.

“First and foremost, it will tip some businesses over the edge,” he said.

“We’ve got members, local businesses, who are getting quite anxious about the number of taxes, levies and premiums that are consistently and seemingly increasing, adding to the cost of business.

“Not to be too dramatic, but there are businesses that are teetering on a pretty tight thread at the moment in terms of operating profit, and any increases in costs, whether it be levies, taxes, premiums, they’ll be making decisions to walk away, which is obviously something we do not want to see.”

Geelong Chamber of Commerce boss Jeremy Crawford.

The comments come as the state Labor government abandoned plans to legislate its WorkCover reforms prior to Christmas after the opposition and Greens refused to support the overhaul.

Instead, the Legislative Council voted to establish an inquiry that would report back in February.

The government has repeatedly labelled the current workers’ compensation scheme “fundamentally broken”.

A significant increase in mental injury claims and workers staying on the scheme longer are major factors in WorkSafe’s precarious financial position.

The proposed reforms would exclude workers suffering stress and burnout from receiving weekly compensation.

Rather than increase premiums prior to the 2022 state election, the government made $1.3bn in bailout payments to keep the scheme afloat during its previous term.

The average premium was lifted from 1.27 per cent of a business’s payroll to 1.8 per cent mid-year and Premier Jacinta Allan this week said premiums would rise further if the legislation stalled.

An increase to 2.5 per cent has been flagged.

“Premiums will have to go up if these changes don’t go through the parliament, premiums don’t have to go up if this bill passes,” Ms Allan said.

Committee for Geelong chief executive Michael Johnston said reform was needed.

“We would hope to see this issue resolved quickly – businesses don’t want to get caught in the middle and have premiums increase unnecessarily,” he said.

“From a Geelong perspective, we want to see WorkSafe set up to succeed.”

Victorian Chamber of Commerce and Industry boss Paul Guerra said businesses should not be used a pawn in the debate.

“It’s a cost that they can’t bear,” he said.

Meanwhile, it has emerged that WorkSafe opposed a Corio housing development due to its proximity to Viva’s refinery.

According to council documents, WorkSafe advised City Hall against granting a permit for a 108-dwelling development at 26-34 Sharland Rd because it “introduces a significant population increase within an outer major hazard safety area”.

The Victorian Civil and Administrative Tribunal will decide the future of the development next year.

Originally published as Another WorkCover premium increase would push some already struggling Geelong businesses ’over the edge’