Australia has 10 different Workers’ Compensation systems, each with its own method of calculating funding requirements to meet anticipated compensation entitlements for injured workers under each unique model. Judging by recent coverage in the media, not all states have got this right.
Here is the state of affairs at the moment
New South Wales
NSW WorkCover deficit will be $4.1 billion – a $1.7 billion slide in six months. Premier O’Farrell will be slashed workers’ compensation rights and payouts to rein in a $4 billion WorkCover deficit and encourage employers to employ more staff.
An article in the Daily Telegraph says “Workers compensation premiums in NSW are double those in Victoria – and the government says employers will end up facing premiums four to five times higher if the scheme is not reformed. A NSW cleaning company paying $150,000 in annual wages currently forks out $10,681 as a base premium. Similar firms in Melbourne and Brisbane would pay $3709 and $4901 respectively.”
A $222 million blowout in the unfunded liability of the South Australian scheme has created more headaches for the government and businesses struggling to pay growing premiums. The latest actual figures to December 31 show the unfunded liability has grown from $952m to $1.174bn in just six months. The unfunded liability was $55m in June 2001.
Victorian Premier Mr Baillieu plans to use funds ($471.5 million over the next four years) from Victoria Workcover Authority (which is in the black) to plug holes in the Victorian budget. He plans to take the funds from the Victorian WorkCover Authority over the next four years.
In Western Australia the system of workers’ compensation payments is completely different. WA’s workers compensation is run privately and insurers are responsible for the WC liabilities. Other than their own government agencies, the WA government does not have any payment responsibility.
At Aurenda we work with companies to in all these states to reduce their workers’ compensation costs.