Businesses Face $47 Million increase in WorkCover costs due to $40 Million Computer Bungle
Posted on 11 Mar, 2010
Having spent over $40 million on a new computer system for WorkCover, the Government have had to cancel the long standing bonus/penalty scheme because the new computer system was not designed to cater for the bonus/penalty scheme- they left it out.
The bungle means that approximately 60% of businesses will face paying higher WorkCover costs from 1st July 2010. This extra cost to business will be on top of already paying the highest WorkCover levies of any state in Australia.
In 2008 WorkCover announced that it would continue the existing bonus/penalty scheme until July 2010 and consult business on what options might replace the scheme. Industry groups were told at a meeting on the 26th February 2010 that the bonus/penalty scheme would be cancelled as of the 1st July 2010 and not replaced.
One of the reasons given for the cancellation of the bonus penalty scheme was that the new computer system was not designed to include the bonus/penalty scheme.
“The Rann Government spent over $40 million on a computer system and left the bonus/penalty scheme out. The result is that approximately 60% of businesses will lose up to 30% in bonuses (levy reductions) resulting in higher WorkCover costs,” said Iain Evans, Shadow Minister for WorkCover.
“Approximately 60% of businesses will face paying higher WorkCover costs as a result of Labor’s $40 million bungle.
“In 2008 the bonus penalty scheme provided good employers with bonuses of $47.3 Million (approx.) - with the abolition of the bonus penalty scheme this cost will now be recouped from businesses through the loss of the WorkCover bonus.
“Some businesses will be paying extra increased costs of hundred of thousands of dollars per year,” Mr Evans said.
“Tens of thousands of businesses will be impacted by the change. Some industry associations have been advised that up to 45,000 businesses will be impacted by the change.
The Liberal Party have committed to keep the bonus penalty scheme until the review of WorkCover required under the Act is completed. Options for the bonus penalty scheme will be considered as part of the Liberal review.