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Skyrocketing workers compensation premiums will cost Illawarra Business more than $28 Million


Release Date: 21/05/2012

The Illawarra Business Chamber has calculated that the impact of a proposed 28% increase in workers compensation premiums would cost local businesses more than $28 million in extra premium charges and would have a negative impact on jobs.

NSW’s Workers’ Compensation Scheme is facing a $4 billion deficit with a proposed 28% increase in premiums needed to bring the Scheme back into balance within five years.

The analysis by the Illawarra Business Chamber is a conservative estimate based on the impact of a 28% increase on the basic tariff premium applied across the number of employers in the Illawarra.

“If premiums are increased by the 28% that the Actuaries assert is needed to get the scheme back to full funding in five years, that will cost Illawarra employers over $28 million in additional premium fees,” said Mike Leask, CEO of the Illawarra Business Chamber.

“Hiking premiums by $28 million or about $2,073 per Illawarra employer is not an incentive to employ people, in fact, it’s an incentive to employers to review their staffing and stop employing.”

Mr Leask said representatives from the NSW Business Chamber will be appearing before the Joint Select Committee on the Workers Compensation Scheme in the NSW Parliament today to argue that premium increases are not the answer but that the Scheme needs structural reform to overcome the financial difficulties it was challenged with.

“This is not easy reform, but it is necessary reform if we are to have a Compensation Scheme that gets the balance right between supporting injured workers and helping employers to create jobs.

“It is in everyone’s interest, both employer and employee, to have a Workers’ Compensation Scheme that is financially sustainable, competitive and assists injured workers to return to work as soon as they are fit to do so.

“The Illawarra business community supports the proposed changes put forward by the Government. The current proposals for reform of the Scheme are anticipated to have a positive impact on the scheme’s finances, and will focus support for the most seriously injured, where the community expects it should be focused.”
 




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