Business could face increased costs of up to $174 million in the first year of the Gallop Government’s new workers’ compensation laws, according to the Chamber of Commerce and Industry.
Business could face increased costs of up to $174 million in the first year of the Gallop Government’s new workers’ compensation laws, according to the Chamber of Commerce and Industry.
And small business could face an even bigger burden because of the legislation’s reliance on injury management plans.
Included in the new legislation is an increase in the length of time workers can receive their normal pay level on workers’ compensation, from four weeks to 13 weeks.
It also protects shift allowances and regular overtime, meaning injured workers in the system can receive a maximum weekly payment of up to $1,446, up from $1,084.
Consumer and Employment Protection Minister John Kobelke has hit back at those claims, saying business groups such as the CCI were taking Government figures out of context and that premiums could actually go down due to increased systemic efficiency.
CCI director safety and health Anne Bellamy said: “The analysis by the Government’s own actuaries show the changes will increase claims costs by 30 per cent to 40 per cent and risk sending employers’ insurance premiums through the roof.
“This is in spite of the Government promise to industry and to parliament that its plans would not cause premiums to rise.
“The changes will also add considerably to the complexity and compliance burden for employers.”
Part of that compliance burden is the legislative requirement for injury management plans to help get workers back into the workforce.
The legislation does allow small businesses to turn to their insurance companies for help with injury management plans.
Combined Small Business Associations CEO Oliver Moon said getting help from the insurance company would relieve some of the pressure on small business.
However, he questioned whether that insurance company help would result in higher premiums.
Mr Kobelke told WA Business News the Government actuary report the CCI was referring to did not take into account increased efficiencies in the system.
He admitted there would be an increase to the system of about $130 million for the first year.
Of that, he said, $70 million had been allowed for and related to people already in the system, while the remaining $60 million was additional ongoing costs to the system.
“The big question is whether those increased ongoing costs go through to premiums when the insurance companies are collecting more in premiums than they are paying out,” Mr Kobelke said.
He disputed claims that small business would have to meet the cost of insurance companies taking on the injury management plans for small business, saying injury management plans should increase efficiency and help reduce rather than increase premiums.
