Could Victoria try to subsidise its ailing workers’ compensation system by joining it with the highly profitable Transport Accident Commission and running them as one operation?

The Victorian Government yesterday denied it is planning to merge the two statutory bodies, but concern has been raised by media, business and motoring groups at yesterday’s appointment of Workcover Authority Chairman James MacKenzie to the chairmanship of the TAC as well. Mr MacKenzie was CEO of the TAC from 1994 to 1997.

Successive governments have used unnecessarily high TAC premiums as a cash cow, with millions of motorists’ dollars tipped into the state’s consolidated revenue over the past 10 years. TAC made a $447 million operating profit in 2000, while WorkCover lost $651 million in the six months to last December.

Under the 1992 State Owned Enterprises Act, the TAC is required to pay a “dividend” to the state, as determined by the Treasurer. Last year’s “dividend” was $273.4 million.

The RACV – which came out strongly several years ago against a Kennett Government suggestion that it might privatise the TAC – described the merger possibility as “totally inappropriate”.

Employers might think so, too. While the media has concentrated on the personalities, it’s likely that over the next few weeks the real consequences of the plan could become more clear. Mr MacKenzie has been seen as a very efficient and innovative manager. Outgoing TAC Chairwoman Margaret Jackson, who is also Chairman of Qantas, has held the top TAC job for eight years. She is known to oppose the united leadership plan. Professor Stephen Cordner – whose term on the TAC board expires at the end of this month – has indicated he will not be available for reappointment as a result of Mr MacKenzie’s move into the chairmanship.