Premium cut shrinks

BUSINESSES will receive a smaller reduction in workers’ compensation premiums than first thought because they will need to help fund a 5 per cent levy to meet the liability caused by the collapse of HIH Insurance.

The insurer’s collapse last month forced the WA Government’s Supplementation Fund to meet the compensation workers who were covered by HIH up until March 14 this year.

The projected cost of these claims is $93 million, while the Supplementation Fund only has about $8.5 million.

Labour Relations Minister John Kobelke said businesses would still receive an average saving on current workers’ compensation premiums of 3.2 per cent.

“The reduction would have been larger but for the need to add a 5 per cent levy to cover the liability from the collapse of HIH,” Mr Kobelke said.

He said under the plan, the levy would apply to workers’ compensation premiums paid by all business for the next 12 months, after which the status of the Supplementation Fund would be reviewed.

Mr Kobelke said the Government’s rescue plan had the support of major industry groups and would require the drafting of an urgent legislative amendment.

“Industry understands the importance to injured workers in putting this strategy in place. Now I hope the Parliament will also recognise its importance and work to expedite the legislation,” he said.


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