Victorian Political News		www.robertclark.net

WorkCover decision risks making Victorians three way losers

News Release - 11 April 2000

Victorians are at risk of being three way losers from the Labor Government's WorkCover decision through an inequitable method of compensating injured workers, through premium increases and job losses, and through a return to the rip-offs and cost blow-outs of the past, Shadow WorkCover Minister Robert Clark said today.

"Under so-called common law legal actions, the level of compensation an injured worker receives depends on whether that worker can prove fault," Mr Clark said.

"Two workers with the same injuries and the same needs could receive different levels of compensation just because one can prove negligence and the other cannot.

"The Government has offered no explanation of why it supports this inequity."

Mr Clark said a $150 million extra burden on payrolls through increases in WorkCover premiums would lead to the loss of 9,000 jobs in Victoria.*

"The public are entitled to know whether the Bracks Government have done any economic impact assessment of the proposed premium increases, and what the results of any such assessment are."

Mr Clark said the Government's proposal fiddled at the edges of the so-called pre-1997 common law scheme - while retaining and further increasing the enhanced no-fault benefits provided in 1997 - and did nothing to address the risk of cost blow-outs and rip-offs that have dogged workers' compensation in past.

"Under the previous Labor Government's WorkCare scheme, unfunded liabilities hit $2.1 billion and premiums hit an average 3.3% of payroll.

"The Coalition Government brought workers compensation back into the black, before so-called common law claims for injuries prior to 1997 led it back to unfunded liabilities of $295 million.

"However, in the six months to 31 December 1999, WorkCover had a surplus of $96 million, and if left unchanged WorkCover is on track to return to full funding by 2001, as forecast by WorkCover's actuaries.

"Yet the Bracks Government is proposing to reintroduce a so-called common law system of the type that has caused such difficulties in the past.

"The public are entitled to demand the Government address all of these concerns, and not hide behind the opportunistic policy which they adopted in 1997.

"It is a policy which flies in the face of Labor Party tradition to seek to eliminate common law legal actions, as the Hawke Labor government did in 1988 and the South Australian Labor Government in 1992."

*methodology used by the Department of Treasury and Finance in 1999 in estimating the effects on jobs of payroll tax changes