Union and businesses advocates slam government decision to increase WorkCover premiums by 42 per cent
Changes to the “broken” WorkCover program have been slammed by advocates as the government scrambles to prevent cost blowouts.
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Victoria’s businesses and union movement have slammed the government’s changes to WorkCover, warning a 42 per cent hike to premiums will make it one of the most expensive schemes in Australia.
The Victorian Chamber of Commerce and Industry and Trades Hall Council joined forces on Friday to criticise different elements of the government’s announced changes.
As first revealed in the Herald Sun last week, Premier Daniel Andrews confirmed the average premium paid by business would rise from 1.2 per cent 1.8 per cent.
A new agency, named Return to Work Victoria, will be set up to assist people on long-running claims back into employment.
Some mental health claims will also be limited, with stress and burnout no longer eligible for weekly WorkCover payments.
Instead there will be 13 weeks of provisional payments made available for medical treatment and other costs.
WorkCover has been described as “fundamentally broken” by the state, with warnings of $1bn annual blowouts unless changes were made to claims and the amount of money coming in.
VCCI chief executive Paul Guerra said hiking the average premium to 1.8 per cent made it one of the country’s most expensive schemes.
In Queensland the premium rate is 1.23 per cent while NSW sites at 1.48 per cent.
Tasmania and the ACT both charge well above other states with rates of 2 per cent while Western Australia is just above Victoria with a rate of 1.82 per cent.
“When business and unions stand together, you know this as a matter of importance for all Victorians,” Mr Guerra said.
“We’re not happy with the announcement … In fact, we’re not happy with the direction of WorkCover at all.
“The WorkCover system in Victoria is no longer fit for modern Victoria but slugging businesses a 42 per cent premium increase to keep it viable is not the answer.”
Mr Guerra said he expected a business with a payroll above $10m would be paying $60,000 more a year.
“$60,000 probably means one less person at least, that a business is now no longer going to hire,” he said.
“It means that they’re going to look at how they expand their operations and probably won’t.
“It’s a meaningful impact at a time where they can least afford it when everything else is going up.”
Mr Guerra said the government should instead focus in major reform in providing assistance to workers, speeding up assessment and in prevention of injuries.
Trades Hall secretary Luke Hilakari said he was very disappointed with the announcement.
“We think denying workers access to the scheme is the wrong way to go,” he said.
“We have real concerns about what is being said about excluding workers who experience stress, anxiety and overwork.
“This was one of the best scheme in the nation. This takes it back a significant step.”
Mr Hilakari said mental health claims were putting pressure on the scheme but that the government should be trying to address this with earlier intervention rather than restricting access to compensation.
“We had a royal commission in Victoria, about mental health for that reason, to destigmatise it.
“We’re very concerned about today’s announcements
“We don’t want to see any injured worker miss out on their support that they rightly deserve.”
The government will also shake up the test used to determine permanent damage for those on claims past 130 weeks.
The “whole person impairment” requirement will now be 20 per cent, rather than a proposed 35 per cent.
All changes will be reviewed independently in three years time and any extra funds collected will be required to stay within the compensation scheme.
WorkCover Minister Danny Pearson said the state had also been advised by the WorkSafe board to hike premiums above 2 per cent, but they had decided that was too excessive a cost for businesses.
He said not everyone was happy with the result but the government had tried to find a constructive solution for everyone involved.
“This is a sensible balance and a central pathway forward,” Mr Pearson said.
“We need to make sure that we get the legislation right going forward and that’s going to require more time and more work with unions and businesses.”
Premiums will be hiked from July 1 but all other changes will need to be legislated.
This means the government still has to convince crossbench MPs to support them in the upper house.
Mr Andrews said if the laws didn’t pass them then premiums were likely to be significantly higher to keep the scheme funded.
“If they don’t, then the only option is to have premiums that are closer to 3 per cent than 2 per cent and nobody wants that,” he said.
“It is worth taking the time to very carefully draft those changes so that you’re minimising any unintended consequences,
“The safety net is to have that review in three years time as well as the commitment that if there is surpluses that are generated more money than the scheme needs, that money is retained.”
kieran.rooney@news.com.au
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