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WorkCover Report exposes Labor's false claims

News Release - 8 March 2000

Government claims that WorkCover is "in crisis" and "out of control" have been exposed as fabrications by the Government's own Working Party in its report released today.

The Working Party report shows that WorkCover has been more than covering its current costs for each of the past 3 years, that if left unchanged it would return to the black by 2001. (See Working Party report, p.26, p.34)

The Report also said that the main cause of recent WorkCover losses has been the cost of pre-1997 claims under common law - the very system the Government wants to reintroduce. (p32,33)

"The Government's own Working Party report makes clear that common law rather than any alleged mismanagement has been the predominant cause of increased WorkCover costs," Shadow Minister for WorkCover, Robert Clark, said today.

"Yet the Government is ignoring all the danger signals and pressing on with its proposals."

Mr Clark said not only do Victorian unions want to bring back common law legal actions with retrospective effect, they also want to keep all of the increased statutory benefits which were provided in 1997 to replace common law. On top of that, he said, they are pushing for further increases in statutory benefits.

"The unions' claims will increase premiums by more than 20% and seriously damage Victoria's competitive position, costing Victoria in confidence, investment and jobs."

Mr Clark said the Working Party report also refuted the Government's claim that the current system provides low benefit levels to seriously injured workers.

"The Working Party report shows that the average payment to seriously injured workers under common law is estimated to be $195,000, which has to take the place of both weekly benefits and a statutory lump sum.

"However, under the current system a worker unable to work again will receive weekly benefits of 75% of pre-injury ordinary time earnings, to a maximum of $887 per week, until retirement age.

"For a 30 year old worker receiving weekly payments of $650, this would total $1,186,185 over 35 years, equal to around $490,000 in present value.

"As well, a lump sum benefit is payable, to a maximum of $302,250 for very serious injuries such as paraplegia or blindness. Furthermore, an injured worker does not need to run the gauntlet of the cost, delay and uncertainty of a so-called common law action in order to receive those benefits.

"These benefits compare favourably with those available in other states, as the Working Party report shows." Mr Clark said.

Mr Clark said the report also showed that WorkCover had been highly successful in reducing workplace injuries (p.21) while also increasing total payments to injured workers (p.29).