‘Paying for the incompetence’: Victorian government slammed over changes to WorkCover following new analysis

‘Paying for the incompetence’: Victorian government slammed over changes to WorkCover following new analysis
  • PublishedSeptember 13, 2023

Leading industry groups and the Opposition have criticised the Victorian government’s proposed changes to WorkCover, which will see business bear the brunt of costs.

Changes to the mandatory scheme were announced in May and will see a 42 per cent increase to premiums paid, from 1.27 per cent to 1.8 per cent of a business’ remuneration.

But, new analysis from the Victorian Parliamentary Budget Office has revealed that the changes will cost the businesses $17.8 billion over the next decade.

The scheme is mandatory for all employers if actual or expected employee remuneration exceeds $7,500, or if apprentices and trainees are employed.

Sole traders, partnerships or trusts with a single employee are not required to take out the insurance scheme.

The changes have prompted warnings from Victorian Chamber of Commerce and Industry chief Paul Guerra, who argued businesses will go broke as a result or customers will be forced to pay more.

“We know the WorkCover system needs to evolve, it needs to be maintained, and it needs to be sustainable, but we can’t just expect business to pay for it,” he told the Herald Sun.

“One of three things is going to happen: the costs will absolutely be passed on to customers where it can, for those who can’t pass it on they will reduce their employment, and unfortunately it will be the last straw for some businesses, and they will go broke.”

The Opposition’s shadow minister for WorkCover and the TAC, Ann-Marie Hermans, said the scheme is “broke” just like the state under Labor.

“Like Victoria, Workcover is broke and it’s Victorian businesses and workers who are paying for the incompetence of the Andrews government,” she said.

“It’s little wonder businesses are fleeing Victoria and it’s workers and families who will be punished as a result of Labor’s incompetence.”

It comes after the Australian Bureau of Statistics (ABS) revealed that Victoria was the sole state to have fewer registered businesses last financial year.

The state saw 7,606 fewer businesses registered in 2022/23 than in the year prior, while New South Wales and Queensland saw increases of 11,031 and 8,147, respectively.

Earlier this year, ANZ Chief Executive Shayne Elliot described the state as “one of the toughest” places to do business.

He said it’s “certainly not getting easier” for companies in Victoria, pointing to the state’s payroll tax rate of 4.85 per cent.

The Victorian government’s budget, handed down in May, was also viewed as unfair to businesses due to new taxes and levies imposed to address debt brought on by the pandemic.

The Business Council of Australia said Victoria is willing to sting companies more to do business in the state at a time when there should be a focus on growing the economy.

Mr Guerra said the budget was a “difficult pill to swallow” as he warned it could result in job losses across the state.


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