Presented by Robert Clark MP		www.robertclark.net

MINISTER SEEKS CREDIT FOR $396M WORKCOVER BURDEN

News Release - Thursday, 2nd August, 2001

The Minister for WorkCover, Bob Cameron, should be apologising to Victorian employers and workers for the $396 million increased burden his bungled handling of WorkCover has helped inflict on them, rather than seeking credit because the situation could have been worse, the Shadow Minister for WorkCover, Robert Clark, said today.

"When Labor came to office, unfunded WorkCover liabilities stood at $296 million. The latest estimate places unfunded liabilities at $692 million. This is not something for which Mr Cameron is entitled to expect congratulations.

"What has happened over the last 6 months is that some of the more outrageous claims lodged prior to Labor's amended deadline for common law claims have been cleared out of the system for less than the original cost estimates.

"This is not surprising, because the actuaries initially valued those claims based on historical claims patterns, without fully taking into account the fact that law firms and unions had deluged the WorkCover system with hundreds of dodgy claims.

"It is mainly getting rid of some of those claims that has helped achieve a $130 million reduction in liabilities at 30 June compared with what the actuaries expected in their December report. The other key factor contributing to the reduction in unfunded liabilities from $1,074 million in December has been a better than expected investment performance.

"However, despite all this there has still been a $396 million deterioration since Labor has been in office. When they came to office WorkCover was on track to return to the black by February 2001 with a premium rate of 1.9%. Now even with a premium rate of 2.22% it is not expected to return to the black until more than three years later in June 2004.

"The Auditor-General's report in June this year found that Labor's legislation changing the deadline for lodgement of common law claims was the most significant development contributing to the massive unfunded liability figure.

"WorkCover's actuaries confirmed in their December report that the last minute surge of claims before the 31 August 2000 deadline was unexpected because plaintiff law firms had indicated previously they did not have a significant backlog of claims to be notified.

"In short, the Minister was dudded by his Labor lawyer mates and by the unions. Once he changed the cut-off date they emptied out their bottom drawers to lodge every dubious claim they could find.

"Labor has well and truly re-ignited the 'compo culture'.

"The Minister seems to think he deserves praise for only presiding over $396 million of deterioration rather than $778 million. But this is $396 million which will have to be made up in continued high premiums and is not available to pay benefits to genuinely injured workers."