|Issue No 11||30 April 1999|
WorkCover Troubles Canít Hit Injured Workers
The body overseeing the state's workers compensation scheme has asked the NSW Government to defer privatisation amidst concerns the insurance companies would set premiums at an inflated level.
The Labor Council is represented on the body, the Workers Compensation Advisory Council, which was established to oversee reform of the troubled scheme.
The WorkCover fund has been in financial difficulties since before 1995, when the Carr government came to power to discover gross mismanagement by the Fahey Administration had dissipated $ billion in surplus funds.
Since then, the scheme has moved into deficit despite a range of reforms measures by Industrial Relations Minister Jeff Shaw in consultation with the union movement. This included cutting lump sum benefits by up to 25 per cent.
The privatisation strategy followed an independent report by KPMG Partner Richard Grellman, which recommended the transfer of risk to insurers as part of a broader push to focus the scheme on rehabilitation and return to work.
While key parts of Grellman's report have been implemented, including the establishment of industry-based groups to oversee safety issues, the privatisation appears to have hit the wall.
Workers Online understands that the insurance companies are pushing for premium increases to fund what they calculate are ongoing shortfalls. However, other stakeholers argue that the insurers calculations are unnecessarily pessimistic.
Labor Council secretary Michael Costa says, whatever the government does with privatisation, workers benefits are at their lowest possible level.
"We believe if the employers and the insurers can't deliver a scheme that maintain our benefits without a premium rise, the introduction of private underwriting needs to be delayed.
"Any premium rise will be used as a trigger to again attack our benefits. the two issues are linked."
Meanwhile, the CFMEU is continuing to push for a separate scheme for the state's building workers, claiming underpayment of premiums is rife in the industry.
CFMEU state secretary Andrew Ferguson said the scheme would put greater onus on big developers, who make huge profits from construction work, to pay for injury insurance. That scheme has won the broad support of Labor Council.
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Last Modified: 15 Nov 2005