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WorkCover Levy reduction welcomed by business but can it be justified?

Posted on March 29, 2010

 

Today’s announcement by the WorkCover Board that they will reduce the WorkCover levy rate to 2.75% will no doubt be welcomed by South Australian businesses but needs to be justified, according to Iain Evans, Shadow Minister for WorkCover.
 
“How can the WorkCover Board justify a reduction in the WorkCover levy rate to 2.75% when the unfunded liability is $911 million and the scheme is only 60% funded?” Mr Evans said.
 
In 2001/02 the unfunded liability was just $192.3 million but no levy rate reduction occurred.
 
In 2002/03 the unfunded liability was $591.1 million but no levy rate reduction occurred.
 
The unfunded liability climbed to $844 million in 2006/07 and still no reduction occurred.
 
“How can the WorkCover Board justify a reduction in the levy rate given the financial position of the scheme is worse now than many previous years when no levy rate reduction occurred?” Mr Evans said.
 
In 2001 when the unfunded liability was $56 million the levy rate was reduced and the Labor Opposition criticised the levy reduction on the basis the reduction put the scheme at risk.
 
“While the reduction in the levy rate will be welcomed by business the WorkCover Board need to explain, if the scheme can afford levy reductions now, why couldn’t the levy rate be reduced in previous years when the scheme was in a better financial position?” Mr Evans said.

 

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