Changes to halt rise

THE WA opposition’s change of tack on workers’ compensation should stop insurance premiums from rising.

Labour Relations Minister Cheryl Edwardes said, while she was satisfied the key thrust of the Pearson Review had been accepted, she was disappointed the complete package had not been agreed to.

Mrs Edwardes said the changes allowed the Premium Rates Commit-tee to immediately reassess the potential impact on premiums.

“While any reduction in premiums is outside the government’s control, the changes made will provide a solid platform for a positive review of premium rates,” she said.

The new changes require workers to prove they have a total disability of more than 16 per cent, or a 9.6 per cent disability in the case of a back injury, before they can sue a negligent employer.

Workers with a disability of less than 30 per cent but more than 16 per cent must decide within six months if they plan to pursue common law or receive weekly compensation payments and free medical costs.

For those suffering a less than 30 per cent disability, there is a damages cap of $250,000.

Non-award workers will have weekly payments adjusted to bring them more into line with workers covered by awards.

Mrs Edwardes said the prescribed amount for statutory benefits would increase by almost 10 per cent.

She also commented that a recently announced review of medical and associated costs in the workers’ compensation system would progress alongside a review of the insurance industry as recommended by the Pearson Review.

Chamber of Commerce and Industry operations manager Brendan McCarthy said medical costs had been snowballing and needed to be addressed quickly, as did efficiency issues in the insurance industry.

Labor spokesman for labour relations John Kobelke said the government had focussed too much on cost savings by attacking the rights and benefits of injured workers.

“We agreed cost savings were needed but wanted them to be married with fairness and workability,” Mr Kobelke said.

“Government changes to redemption power in 1993 caused the cost blowout and a draft was developed in 1995 to fix this key mistake.

“The insurance industry and CCI said this was a major mistake in 1993, and we support its return.

“However, a wider range of issues need to be addressed to keep premiums down in the long term such as the government’s 5 per cent stamp duty and burgeoning medical costs.”

Mr Kobelke said there should be a thorough independent review of WorkCover along with the development of an independent body for the insurance industry.

He said while underinsurance and lack of compliance was a major cause of cost blowouts, it was not being investigated properly.

“A recent survey indicated between 17 per cent and 20 per cent of employers were not insuring their workers properly,” he said.

“I’ve heard many stories of companies employing twenty employees and insuring ten – the implication of this on premiums is quite obvious.”

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