Questions raised about the Victorian Government’s transparency on WorkCover

In December 2011 the Victorian Liberal Government announced the removal of almost $A500 million from WorkCover funds to be placed in general revenue over the next four years.  Some unions were outraged and began a protest petition.  Labor politicians were similarly outraged.

The removal of the funds sounds odd as it is understood that these funds are originally generated through the workers compensation insurance premiums required to be paid by most Victorian businesses.  The funds are then invested to provide a healthy return with the intention that the pool of WorkCover funds is used to support the OHS functions of WorkSafe and its inspectorate and to provide funds to assist in the rehabilitation of injured workers. Logically, the more funds available, the better the rehabilitation services and the better the prospect of people returning to work.

In this context, how come such a large amount can be removed without affecting the level of inspectorate and rehabilitation services?  Does the current success of Australia’s economy really justify this move, even though a large part of that economic health is from States other than Victoria?

Business organisations understandably questioned why the funds were being used in this way when the Government could have reduced the premium burden on businesses, as has occurred repeatedly in good economic times.

The Australian Financial Review (AFR)  for 28 February 2012 (not available online without a subscription) has reported that the Victorian Government has commenced a “root and branch” inquiry into the WorkCover Authority and the Transport Accident Commission through the Essential Services Commission. There has been no public announcement of this review.

This secrecy has raised the ire of opposition politicians and business leaders for, although the inquiry may fit with the Government’s original commitments to improve efficiency and transparency, no terms of reference have been released and there is no indication of any consultative mechanisms.

The AFR article is based on a longer opinion piece (available online) written by James MacKenzie, a former chairman of the Victorian Workcover Authority, who discusses the government’s “rob Peter to pay Paul” policy.  Some of MacKenzie’s concerns were aired in The Age newspaper in December 2011. MacKenzie asks

“If there is no hidden agenda or ideological outcome in the government’s mind, why not release the terms of reference?”

He also admits that more information is unlikely to appear until Parliament resumes and the government proposes the legislative changes required to facilitate what MacKenzie describes as an “unprecedented cash grab.”  The parliamentary hope relies on a combative, perceptive and strategic opposition Labor Party to hold the government accountable and that may be the flaw in the expectations of transparency and accountability.

In 2012, Victoria’s Labor Party needs to double its effectiveness in and outside Parliament to ensure that the health safety and wellbeing of workers is maintained.

Kevin Jones

Categories business, economics, government, OHS, politics, WorkCover, WorkSafeTags , , , , ,

5 thoughts on “Questions raised about the Victorian Government’s transparency on WorkCover”

  1. What this equates to is Little Ted is emulating what Big Jeff did to the state schools, hospitals and a number of other Government subsidised entities (taxi industry I think may have been another) that went under the knife and lost a lot of blood. They have been struggling to etch out an existance ever since.

    So many things are cut down and thrown away with Liberal Governments (state Govt mostly) and this is another example. Watch little Ted go into hiding again. He makes an announcement of sorts and sticks around for a few days (sometimes) then goes into hiding until the sun comes out again. A bit like those pharocial Adelaide supporters (sorry South Aussies…just a joke). And talking of jokes…that is exactly what he is a joke, like his decisions. Only problem is no-one is laughing, but groaning instead (incessently).

  2. The AFR for 29 February 2012 has additional details. According to Victoria’s Assistant Treasurer, Gordon Rich-Phillips, says the review is an internal review and results are expected within 6 months.
    Business representatives say that moving money from WorkCover into general revenue sets a precedent that wouold be difficult to reverse.
    Law industry representatives are also critical of the government accessing reserves for general economic purposes.

  3. Pretty disgusting if I may say so.

    Employers pay premiums to cover workers comp costs, not to fill the budget black hole left by poor government decisions (by either party). This is effectively a tax on businesses and they have a right to be outraged.

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