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WORKCOVER: NO EXCUSES FOR BREAKING PROMISES

News Release - Monday, 23rd October 2000

Just six months after promising Victorians that its WorkCover changes would be paid for by a 15% average premium increase and WorkCover would be fully funded within three years, the Government has admitted that it cannot keep the second promise and has put the first in doubt.

The Shadow Minister for WorkCover, Robert Clark, said that it was ludicrous for the Government to attempt to blame this on the previous Government.

"The revised liability estimates reported today are primarily due to Labor's handling of claims for injuries which occurred under the old "common law" system which was abolished in 1997.

"The actuaries have taken the experience of these "common law" claims over the past year, along with other new information, to produce revised estimates of what the unfunded liability would have been in June 1999 if this information had been known then.

"Labor's claim that the Kennett Government kept premiums too low is also wrong. The Labor Government's own Working Party report shows that before Labor's WorkCover changes, premiums were more than covering past losses and were steadily returning WorkCover to the black.

"If the Government had not changed the system, the former average premium of 1.9% of payroll would have been more than enough to cover the costs of finalising claims under the pre-1997 "common law" system, even taking into account the latest revised figures.

"Labor have known for months about the risk of cost blowouts from "common law" claims.

"The Opposition, employer groups and others warned the Bracks Government time and time again that "common law" is inherently an unfair and rort-prone system likely to result in cost blow-outs. Yet the Government has ignored all the warning signs.

"It is absurd for the Government to now claim these additional losses are unexpected.

"What is worse, the Government has pressed on with the reintroduction of "common law" legal actions regardless of the warnings about the cost blowouts which would follow.

"The Government has now given employers and the community further cause to fear future premium increases on top of the massive and still unexplained increases which the Government has already imposed.

"If this occurs, Victorians will pay further in jobs and lost investment for Labor's reintroduction of an unfair and rort-prone system."