Business premiums frozen for 12 months in Victorian WorkCover reforms

Victoria’s union movement has blasted the Labor government after it brokered a deal with the Coalition to push through contentious changes to the state’s worker insurance scheme.

Premiums for businesses under the WorkCover scheme will be frozen for the 2024/25 financial year under an agreement to secure opposition support for the bill.

Other amendments include an independent review into the impact of the reforms, expanding WorkSafe’s board from five members to six and setting up an advisory committee on the creation of Return to Work Victoria.

The deal means the legislation, which restricts eligibility and testing requirements to curtail skyrocketing costs, will pass the upper house as early as Tuesday.

“This premium freeze for employers will help many of them at a time when land taxes and payroll taxes and other fees and charges … continue to skyrocket,” Opposition Leader John Pesutto told reporters.

Under the incoming scheme changes, workers suffering stress and burnout will no longer be able to access weekly WorkCover benefits.

They can still receive up to 13 weeks of provisional payments to cover medical treatments and services.

Workers receiving payments beyond two-and-a-half years will also have to undergo another impairment test to determine if they are unable to work indefinitely and meet a “whole person impairment” of more than 20 per cent.

The union movement has staunchly opposed the reforms since they were announced a year ago by then-premier Daniel Andrews.

Victorian Trades Hall Council secretary Luke Hilakari wrote to all state Labor MPs last month encouraging them to lobby WorkSafe Minister Danny Pearson to dump the bill.

He said the changes will take the worker compensation scheme from one of the country’s best to one of the worst, with injured workers to face poverty when kicked off after 130 weeks.

“It should be unimaginable that Labor would cosy up to the (Liberals) to remove injured workers rights but that is exactly what happened today,” Hilakari wrote on X, formerly known as Twitter.

“Say goodbye to ‘putting people first’.”

But Pearson declared the changes were a victory for “all Victorian workers”.

“We’re making sure that Victorian workers have the dignity of a viable, sustainable workers compensation scheme,” he said.

Victorian Chamber of Commerce and Industry chief executive Paul Guerra applauded the major parties, saying it was the best outcome the business community could have hoped for.

“This is a significant win for employers who manage their businesses in the highest taxing state in the country,” he said.

Animal Justice MP Georgie Purcell, who chaired a parliamentary inquiry into the bill, said the reforms were a backward step for the treatment of mental health.

“What this bill says is that the government doesn’t want to hear about workers’ mental health,” she told the upper house.

“They only want to talk about mental health when it’s convenient and promotional for them.”

WorkCover claims liability has tripled in Victoria since 2010, mainly because of people staying on the scheme longer and soaring mental health claims.

Over the 2022/23 financial year, 16% of claims were for mental injuries.

Some 98,000 Victorians received WorkCover support in 2022/23 and taxpayers have topped up the scheme with an extra $1.3 billion to offset rising costs over the past three financial years.

The average premium for businesses was lifted from 1.27% to 1.8% in July after the government declared the scheme was broken and needed to be overhauled.

This article was first published by AAP.