| Contents |
|
Robert Clark Ideas Box Hill Electorate Former Portfolio areas Other Facts
and Issues Other Site Last Changed |
| Search |
 |
||
Victorian Political News |
 |
www.robertclark.net |
NEW WORKCOVER SLUG FOR EMPLOYERS
News Release - Wednesday 19th July 2000
Thousands of Victorian employers are facing WorkCover premium increases of up to 40% as a result of hidden changes to the way premium rates are calculated, combined with premium increases already announced by the State Government, Shadow WorkCover Minister Robert Clark said today.
Mr Clarke said under changes, which have not been publicised, the Government has specified that the 17% increase in premiums will be imposed on top of the cap of up to 20%, which has applied in the past to increases in the premium rate for small and medium size employers.
He said the Government has also abolished the cap on movements in the "industry rate"- the standard premium rate which applies in each industry group.
"These changes have opened the way for massive increases in the rates for many industries, which will lead to higher costs for the typical employer in those industries," Mr Clark said.
"The standard premium rate for 275 industry classifications is to be increased by at least 20%. This compares with only 43 industry rates reduced, and 200 industry rates unchanged."
The combined effect of these two changes is that many small and medium size employers will face a premium increase of up to 40.4% this financial year, because the increased industry rate will lift their premium rate to the cap, and then a further 17% increase is applied on top. Some large employers will face even bigger increases.
(The 17% increase consists of 15% due to the reintroduction of so-called common law legal actions and increases in statutory benefit levels by the State Government, plus 2% due to the Commonwealth's new tax system. This does not include the 10% GST that is then applied to the premium, but which can be reclaimed as an input tax credit by almost all employers.)
"Industries where the typical employer will be hard hit include much of the mining, construction, clothing, motor vehicle, electrical and electronics, transport, health and aged care sectors," Mr Clark said.
"The latest changes to the rules have been disclosed only in a WorkCover Premium Order published in the Government Gazette, and in information provided by the Victorian WorkCover Authority to their agents," he said.
Mr Clark said the Government's handling of the issue confirmed Labor's complete disinterest in the impact of its WorkCover changes on employment and jobs and made a mockery of its claims to be a business-friendly government.
"The Government has blithely changed a 20% cap into a 40.4% cap, and seems to think that it simply has to set the premium rates and employers will pay up.
"Labor lacks the real world experience to realise that a 30% to 40% increase in WorkCover premiums will send many businesses to the wall, and force others to relocate interstate or overseas.
"These increases will do serious damage to Victoria's international and interstate competitiveness, and will cost investment and jobs."
WorkCover Premium Increases – Illustrative Examples
| Firm’s Industry Category | Firm's Annual Payroll ($) | Firm's 99-00 Premium Rate | Industry Rate 00-01 | Firm's 00-01 Premium Rate | Premium Rate % increase |
| Grape Growing | 200,000 |
2.70% |
3.95% |
3.76% |
39.23% |
| Sand Quarrying | 1,000,000 |
2.70% |
3.26% |
3.76% |
39.23% |
| Food Products nec | 2,000,000 |
4.78% |
5.78% |
6.67% |
39.52% |
| Clothing Mfr | 4,000,000 |
3.26% |
3.95% |
4.57% |
40.14% |
| Iron or Steel casting | 2,000,000 |
4.78% |
5.78% |
6.67% |
39.52% |
| Motor vehicle Mfr | 20,000,000 |
3.95% |
4.78% |
5.59% |
41.58% |
| Electrical machinery Mfr | 7,000,000 |
2.70% |
3.95% |
3.90% |
44.57% |
| Bricklaying | 100,000 |
7.00% |
8.40% |
9.75% |
39.23% |
| Furniture Wholesalers | 1,000,000 |
1.84% |
2.23% |
2.56% |
39.23% |
| Shoe Repairers | 500,000 |
1.04% |
1.52% |
1.45% |
39.23% |
| Stevedoring | 6,000,000 |
2.70% |
3.95% |
3.85% |
42.64% |
| Nursing Homes | 1,000,000 |
3.95% |
4.78% |
5.50% |
39.24% |
| Cafes & Restaurants | 400,000 |
1.84% |
2.23% |
2.56% |
39.23% |
Notes:
The above are hypothetical examples of the increases faced by firms in the specified industry categories.
They are examples from 13 of the 275 industry categories for which the standard premium rate has been increased. All industry rate increases have been of at least 20%. The rate has been reduced for 43 industry categories, and 200 industry rates are unchanged.
It is assumed that each firm’s 1999-2000 premium rate was equal to the 1999-2000 industry rate for the industry concerned, and that the firm’s past WorkCover claims experience factor for 1999-00 and 2000–01 has moved in line with the industry rate for the industry category concerned.