While the Federal Government’s ability to introduce standardised workers’ compensation laws across Australia is limited, it does have some powerful cards to play if it wants to. With employers around the country voicing increasing concern at rising workers’ comp premiums – at last estimate the various systems now suck $30 billion out of the economy – the Federal Government is considering allowing the biggest national employers to join its Comcare system.

Workplace Relations Minister Tony Abbott – whose reshuffle into the health portfolio [see first Regulatory News story] will inevitably cause delays while his successor settles in – has been an advocate for the inclusion of the big employers in Comcare, which generally charges less than the eight state and territory systems.

The repercussions for those schemes could be disastrous. So bad, in fact, that some senior Canberra public servants fear a move into Comcare by the big employers could destroy some of the struggling state schemes. All very well, but the small businesses left behind without the Comcare choice would be forced to support even flimsier and more expensive schemes.  

Workers’ comp premiums in Australia have risen more than 30% in the past five years. The only other thing going up at much the same rate are the deficits they carry. NSW, Victoria and South Australia are at the top of the list for poor results.

For example, WorkCover SA’s June quarter results released last week showed an unaudited funding shortfall of $419 million, based on an outstanding claims liability of $1.031 billion: an increase of almost $230 million on last year’s result. Unfunded liabilities increased from about $22 million in 1999/2000 to $56 million in 2000/01 and $192 million in 2001/2002.

Bruce Carter, its new chairman, says the financial position “will substantially worsen before it improves”.

There’s no doubt the issue will take some time for Mr Abbott’s successor, former Minister for the Ageing Kevin Andrews, to get his teeth into. But don’t expect the national employers to let it drop now.