A report commissioned by the Insurance Council of Australia (ICA) calls for greater harmony between state and territory workers’ compensation schemes.

ICA CEO Rob Whelan says the “incredibly inefficient and archaic” regime needs an overhaul. He says currently employers may need to comply with up to eight state and territory schemes, and a person injured at work may receive different levels of benefits depending on the state or territory in which their injury occurred.

“The differences between the schemes and the compliance burden on businesses are detrimental to efficiency and costs, and are a drag on employment and the economy.”

The report – A Best Practice Workers’ Compensation Scheme – examines the best elements of programs in each jurisdiction, seeking to improve harmonisation and provide “greater scheme sustainability, alignment and certainty for injured workers and employers”.

Mr Whelan says the fragmented system should be replaced with a co-ordinated national approach based on competitive underwriting by general insurers regulated by the Australian Prudential Regulation Authority.

“Competitive underwriting of monopoly schemes would reduce scheme volatility and remove political interference with the pricing of risk,” he says.

“It would also remove government reliance on premiums as a source of general revenue.”

ICA hopes the report will drive renewed efforts by governments, employer and employee organisations, compensation authorities and other stakeholders to improve alignment between the schemes.

The report was written by Finity Consulting principals Geoff Atkins and Gae Robinson. It can be accessed here.