Victorian Political News		www.robertclark.net

ACCC FORCES BACKDOWN ON WORKCOVER CLAIMS

News Release - Monday 24th July 2000

The ACCC has forced the Victorian WorkCover Authority to re-issue a leaflet purporting to explain WorkCover premium increases, which the ACCC found to be "potentially misleading".

The cost of issuing the corrected leaflet, which the ACCC has said "may have misled employers about the impact of the Goods and Services Tax on premiums", is likely to exceed $100,000, which will have to be met out of employer premiums.

The original notice issued by VWA in June and sent to all Victorian employers, claimed that an extra 12% had been applied to premiums to cover GST costs.

Under the re-issued leaflet, the VWA has been forced to disclose that only a 10% GST charge has been applied to premiums, and that the remaining 2% increase has been an indirect cost due to a range of factors flowing from the new tax system. These include higher compensation benefit payments as well as indirect cost increases for some services.

For the majority of employers the 10% GST charge on premiums can be reclaimed as an input credit under the new tax system

Shadow Minister for WorkCover, Robert Clark, said the ACCC finding raised concern about political interference with the VWA, and added insult to injury for employers facing WorkCover premium increases of up to 40% or more. The premium increases are due to the Bracks government's reintroduction of so-called common law legal actions and higher statutory benefits, combined with increases in various industry premium rates.

"The original leaflet seems clearly designed to make a political attack on the Federal Government, rather than provide impartial and factual information to employers.

"It shows all the signs of being part of the Labor Party's now discredited campaign against the GST.

"The Minister for WorkCover needs to explain exactly what role he and his office had in the drafting of this leaflet, and what instructions or suggestions they made to the VWA about its wording.

"Small and medium size employers in industries covering 44% of Victorian payroll, now face premium increases of 30 to 40 per cent (plus GST). To know that more than $100,000 of their premiums has been wasted in correcting a misleading piece of political propaganda only adds insult to the serious injury that the Bracks government has already inflicted on them," Mr Clark said.