Victorian Political News		www.robertclark.net

WORKCOVER: GOVERNMENT MUST COME CLEAN ON EXPENSIVE BUNGLE

News Release - Monday 7th August 2000

The State Opposition has called on the Labor Government to make public full details of its research and costings of WorkCover premium increases and their impact.

Shadow WorkCover Minister Robert Clark said that on all the evidence to date, the Government had grossly miscalculated both the size and the effect of the increases.

"It appears the Labor Government has failed to adequately research the effect which its premium increases would have on jobs and services," Mr Clark said.

"It seems the Government used only one inappropriate economic model to assess the impact on jobs and this did not take account of the premium increase method which the Government adopted.

"This flawed method imposes a 17% across the board increase on top of the cap in increases which previously protected employers.

"The result of this has been that most small and medium size employers in industries covering some 44 per cent of Victorian payroll are facing premium rate increases of close to 40 per cent (plus GST), with many large employers, or employers who have had modest payroll growth, facing even higher increases in their bills.

"We are now seeing the consequences of this bungling, with thousands of businesses contemplating laying off staff, deferring new employment or sourcing their products from overseas.

"It also appears the Government failed to look at the effect its increases would have on the service organisations which are funded by State Government. It has failed to increase grants to these organisations to meet the cost of the premium increases, so that now at least one disability service will have to stop excursions for their clients in order to pay their WorkCover bill.

"To compound the situation, the Labor Government has tried to conceal the extent of the increases with misleading statistics.

"The Government claims that only 2% of businesses have had rate increases of more than 40%, but they know, or ought to know, that the increase method they have adopted means there are thousands of businesses whose premium rates have increased between 39% and 40%.

"Furthermore, the Government's claim that the average increase in premium rate has been only 17% just doesn't add up when industry rates for 275 of 518 industry classifications have been increased by over 20%, with 200 unchanged and only 43 reduced.

"It is also hard to believe the Government's claim that 31% of premium rates have remained unchanged or fallen.

"The Government must make public all the information and calculations on which their premium increase decisions have been based, so that employers and the public can see for themselves what research the Government undertook, whether or not there has been only a 17% average increase, and whether the Government is being fair and accurate its statements.

"The Government must also look again at the premium increase method they have adopted and come up with a more equitable and affordable approach that minimizes the impact on jobs and services."