July/August - MTA
July/August - MTA
July/August - MTA
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EXECUTIVE DIRECTOR’S REPORT<br />
By <strong>MTA</strong>-SA Executive Director John Chapman<br />
The Great WorkCover Spin<br />
Well the new WorkCover<br />
rates have been released<br />
and there is good news and bad<br />
news for employers.<br />
Earlier this year, the<br />
WorkCover Board announced<br />
that it had reduced the average<br />
levy rate from 3 to 2.75 per cent.<br />
This reduction was too little<br />
and way overdue from the<br />
legislative changes which<br />
were put in place in 2008.<br />
These changes followed an<br />
independent review known as<br />
the Clayton Walsh review.<br />
At the time 1 the Government<br />
said the review was directed<br />
in part to an objective of “an<br />
average employer levy rate<br />
reduced to a range of 2.25 to<br />
2.75 per cent by <strong>July</strong> 1 2009”.<br />
Some in the business<br />
community think the latest<br />
reduction is a good result. I<br />
remind members and others that<br />
the current levy rate in Victoria<br />
is 1.387 per cent or just over<br />
half of our current average levy<br />
of 2.75 per cent. In New South<br />
Wales, their WorkCover levy<br />
has just been cut for the sixth<br />
successive time with a target rate<br />
of 1.66 per cent.<br />
Depending on what<br />
automotive industry sector you<br />
are in, your rate has hopefully<br />
gone down.<br />
But for some employers who<br />
manage their operations well<br />
and take their occupational<br />
health and safety responsibilities<br />
seriously, they are facing an<br />
increase in costs because of the<br />
removal of the Bonus/Penalty<br />
Scheme effective from<br />
<strong>July</strong> 1 2010.<br />
This ham-fisted decision<br />
typifies the mismanagement of<br />
the state’s workers compensation<br />
scheme – which is paid for by<br />
employers – which has been<br />
going on for too long.<br />
The decision to remove the<br />
Bonus/Penalty Scheme was made<br />
in mid 2008 but WorkCover<br />
did not communicate to every<br />
employer what it was going to do<br />
to replace it.<br />
After persistent lobbying<br />
by the <strong>MTA</strong> last year, a<br />
“consultation” process was<br />
put in place to develop an<br />
alternative to the Bonus/Penalty<br />
Scheme.<br />
But that alternative was never<br />
going to include a system which<br />
rewarded good employers and<br />
penalised not-so-good<br />
employers.<br />
Why? Because WorkCover<br />
had already committed to a new<br />
computer system which did not<br />
have the capacity for a bonus/<br />
penalty.<br />
Guess what – the outcome<br />
of the consultation process<br />
was a recommendation that a<br />
“consultant” should be hired<br />
to work with stakeholders to<br />
devise a new system.<br />
Is the WorkCover<br />
organisation so bereft of talent<br />
that it needs to bring in a high<br />
priced outsider to fix something<br />
that should be core business to<br />
the organisation?<br />
All this prevarication delayed<br />
any decision on the WorkCover<br />
rates for 2010/11.<br />
Businesses trying to plan a<br />
budget for 2010/11 would have<br />
found it virtually impossible<br />
to plan for the cost of workers<br />
compensation insurance.<br />
WorkCover seem to think it<br />
acceptable that we get the rates<br />
in the second week of June, just<br />
a few weeks before the start of<br />
the new financial year.<br />
That shows a fundamental<br />
disconnect with business and<br />
business planning.<br />
WorkCover’s latest letter<br />
to employers (something we<br />
said should have been issued<br />
months ago) tries to justify that<br />
removing the Bonus/Penalty<br />
Scheme is good for employers.<br />
Well it might be for the<br />
employers who have not<br />
managed their OH & S well –<br />
they won’t face a penalty.<br />
The letter in part states “This<br />
improved industry-based<br />
system without bonuses or<br />
penalties will be better for all<br />
stakeholders and will encourage<br />
industries to collaborate to find<br />
employment opportunities for<br />
workers with disabilities leading<br />
to further reductions in the<br />
total cost of workplace injuries.”<br />
What a load of cobblers! This<br />
is the sort of information we<br />
have come to expect from an<br />
organisation which is more<br />
intent on spin than the<br />
substance of properly managing<br />
claims.<br />
All sides of politics grimace<br />
when you mention the issue of<br />
WorkCover. Simply WorkCover<br />
doesn’t work well at all and<br />
hasn’t for many years.<br />
WorkCover has appointed<br />
a new Chief Executive, Rob<br />
Thomson, whose challenge is<br />
to rebuild confidence with the<br />
employer community. We look<br />
forward to any improvement.<br />
We will continue to hold<br />
WorkCover and the State<br />
Government to account on an<br />
organisation which is funded<br />
by employers who do not get an<br />
adequate say in its management.<br />
1<br />
Premier Rann Ministerial Statement to<br />
Parliament 26th February 2008<br />
www.mta-sa.asn.aumotor trade 5