Australia’s peak retail body, the Australian Retail Association, says an increase in WorkCover premiums is the last thing businesses need amid rising inflation and a crime wave targeting small businesses.
On May 19, the Victorian Labor government announced a 42 percent increase to the Workcover premium paid by the state’s businesses into joint funds used to cover employee injuries and insurance claims.
“There’s nothing safe about being sick—we’re helping workers return to their jobs and making sure WorkCover can support Victorians for many years to come,” said Premier Daniel Andrews in a statement.
The government said WorkCover was “fundamentally broken” and did not meet the modern needs of work.
Since 2010, claims have tripled—driven by the increase in weekly income support for those on WorkCover long-term.
The Victorian government also pointed to a rise in mental injury claims as another reason for the cost increase—now representing 16 percent of claims.
Yet the CEO of the Australian Retail Association, Paul Zahra, said the move would make Victoria’s Workcover costs (1.8 percent of an employer’s payroll) higher than New South Wales (1.48 percent) and Queensland (1.23 percent).
“Many small businesses are already severely challenged around cash flow,” Zahra said in a statement.
“And our broader sector is experiencing really difficult economic conditions, with a consumer spending slowdown at the same time that operating costs—such as rent, fuel, energy, and labour—continue to rise and a wave of retail crime that is impacting retailers’ margins and their teams’ wellbeing,” he added.
“This will be a bitter pill to swallow for a lot of retailers, who obviously want to do the right thing by their workers, but who are being asked to carry the can for decades of poor decision-making within this scheme.”
Victoria’s Finances in Dire Straits, MPs Warn
Former Liberal MP Neil Angus said it was foreseeable that WorkCover was in financial trouble, especially after the government was forced to inject $1 billion into it in recent years to keep it afloat.“These funds were needed due to the mismanagement of the scheme over many years,” he said in a statement to The Epoch Times. “The rorting of the scheme and the ease with which some claimants are able to participate in it is not sustainable.”
“The gross mismanagement of major projects over the last nine years, with tens of billions of dollars in cost overruns, has real consequences—that is, Victorian taxpayers and businesses are as always left to foot the bill in one way or another.”
Meanwhile, Victorian Senator Ralph Babet said the cumulative impact of rising interest rates (which slow consumer spending), over-regulation, and inflation was already squeezing businesses.
“Our nation and Andrews-run Victoria has a problem, and it’s that our business owners are absorbing much of the pressure. Business owners always pay their staff before themselves, but their ability to stay afloat is impacted every day by government actions,” he told The Epoch Times in an email.
Changes to Mental Health Claims
Another change to WorkCover would be for workers experiencing stress or burnout to be moved on from receiving benefits under the scheme and to receive instead 13 weeks of provisional payments to cover medical treatment.On this change, Luke Hilakari, the Victorian Trades Hall Council secretary, was not supportive.
“The current system has many faults, but limiting who can access financial support is not the solution. The union movement doesn’t support any changes that will hurt injured workers,” he wrote on Twitter.
While Zahra said, crime was a main contributor to increased mental stress for workers.
“We are seeing common and repeated instances of antisocial, aggressive and criminal behaviour against staff,” he said. “If we can stop this type of behaviour from happening in the first place, then we’ll reduce the number of potential claims.”
