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.