The Victorian Government says it is working with business and other groups to look at options to improve the state’s “fundamentally broken” workers’ compensation system.
WorkSafe reported a net profit of $43 million last financial year, its first positive net result since 2017/18, but Performance from Insurance Operations had a deficit of $1.6 billion.
The annual report noted a growing gap between collected premium income and the annual cost of claims, with the State Government providing an operating grant of $450 million, while holding the average premium rate at 1.27%.
“The WorkCover scheme is fundamentally broken. The scheme is no longer fit for purpose and does not meet the modern needs of those it was originally designed to help more than 30 years ago,” a Victorian Government spokesman said yesterday.
“The Victorian Government is working with business and worker stakeholder groups to look at all options and take immediate action to continue the ongoing maintenance of the WorkSafe program.”
The spokesman said the priority was helping people return to work after an injury, and ensuring the scheme was maintained.
The media at the end of December reported that the State Government released a report in 2020 by consultants Finity which found that the scheme is at a tipping point in its history and faces internal and external threats to its stability.
Increases in mental health claims add to the pressures on the system, with the annual report stating that mental injuries often take longer to resolve and require more services and support.
The Victorian Chamber of Commerce and Industry says it recognizes the current WorkCover system is not sustainable and adjustments need to be made to ensure its viability.
“The Government consulted with us in good faith to ensure that the business position was taken into account,” said CEO Paul Guerra. “While we would like to see additional business costs reduced, we recognize that the continued viability of the system is paramount.”
Shine Lawyers Special Adviser Thomas Bradley has urged the Victorian Government to consider increasing insurance premiums, which he says have not been lifted for years.
“The government should also address the delaying tactics used by insurers when assessing claims because they ultimately increase medical and legal costs by dragging out disputes and allowing cases to fester. damage,” he said.
WorkSafe Victoria is the trading name of the Victorian WorkCover Authority.
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