NSW Premier Barry O’Farrell and Minister for Finance and Services Andrew Constance have announced a further reduction to WorkCover premiums while confirming the scheme is now back in surplus for the first time since 2008.
This will mean that 200,000 employers across 376 industries including many in the transport sector will benefit from an average premium rate reduction of five per cent – saving them a total of more than $130 million a year.
O’Farrell made the announcement at Aldridge Traffic Systems at Rhodes along with Constance, Member for Drummoyne John Sidoti and Vice President of the NSW Business Chamber Tony Dormer.
“The NSW Government’s reforms are delivering a fairer system, with more generous payments being provided to severely injured workers and businesses receiving incentives to improve workplace safety,” said O’Farrell.
The premium cuts announced this week are on top of an average 7.5 per cent rate cut which came into effect earlier this year for 167,000 employers. With these reductions combined, NSW businesses will receive an average 12.5 per cent rate reduction in the 2013 premium cycle, saving $330 million.
WorkCover cited, as a case study, a small transport company in South West Sydney with a wages bill of $455,000. If the WorkCover scheme had not been reformed, the employer would be paying an annual premium of $44,924. Under the NSW Government’s changes, the business is now receiving a rate reduction of 22.5 per cent, and will now pay a bill of $20,324 with other discounts and incentives applied.
O’Farrell said improvements in the scheme mean no employer will receive a rate increase in 2013.
“These reforms are great news for a business such as Aldridge Traffic Systems which will receive a further WorkCover premium rate reduction of 7.5 per cent,” said O'Farrell. “Returning to work early and safely is good for recovery and helps workers regain financial independence sooner. Safe Work Australia has reported that in 2012/13, NSW’s return to work rate improved by three per cent to 88 per cent – making it higher than the national average of 86 per cent.
“This result is a key driver in WorkCover’s improved performance, with the scheme accumulating a $309 million surplus as of 30 June 2013. This is a great result for the workers and employers of NSW. There is now adequate funding to protect injured worker payments while rewarding employers for good safety performance.”
Small employers are benefitting from incentives introduced in June including an Employer Safety Incentive (ESI) premium discount at each policy renewal and a Return to Work Incentive for employers who have an injury in the workplace. An employer can retain their ESI discount provided injured workers return to work within 13 weeks.
The NSW Business Chamber estimated that without the NSW Government’s reforms to the WorkCover Scheme 12,600 jobs and job opportunities would be have been at risk.
“WorkCover’s improved financial performance proves that looking after people who are injured at work and lower premiums are not mutually exclusive,” said Dormer. “Apart from the reduced premiums, it is particularly pleasing (that) there has been a reduction in the number of claims and the improvement in the return to work rate. NSW now has the best return to work rate in the country.”