High workers’ compensation premiums are holding Victorian businesses back, the Australian Industry Group has warned. In a pre-budget submission, the employers’ body has urged Premier Steve Bracks to reduce the costs of the state’s WorkCover program by 10%.

Queensland – which has Australia’s lowest premiums – has just announced a $100 million cut in its workers’ comp premiums from July 1, with Premier Peter Beattie saying the rate will drop from $1.43 for every $100 in wages paid to $1.20.

Currently for each $100 of wages paid, Victoria charges $1.80, NSW $2.44, WA $2.32, SA $3, and the Federal Government $1.77.

It’s the Queensland rate that is in the sights of the Victorian employers, who want their state government to achieve parity with it.

Victorian director Timothy Piper says the cuts are needed in the face of increased competition from both interstate and overseas. “These measures are about removing obstacles and improving incentives for investment and risk-taking.”

He says the 2006/07 state budget provides an ideal opportunity to reduce business compliance costs across the board.