The Victorian Government has cut workers’ compensation premiums in the 2012/13 financial year, but will take funds from the Victorian WorkCover Authority by way of a dividend this financial year.

Treasurer Kim Wells announced in the state budget announcement last week that WorkCover premiums will fall by 3% from July 1.

“This will generate savings for Victorian businesses and entrench our competitive position as the state with the lowest workers’ compensation premiums in Australia, in addition to an outstanding workplace safety record,” he said.

Mr Wells has previously said the state will take a $471.1 million WorkCover dividend over the next four years. The state budget, released last Tuesday, revealed the dividend will contribute to a $500 million-plus increase in dividends to the Government.

The budget papers do not disclose what the dividend will be this financial year or in 2012/13. A Department of Treasury and Finance spokesman told insuranceNEWS.com.au the Treasurer will determine the dividend each year after consulting WorkCover.

Applying a dividend to WorkCover means that in this financial year, the Government’s total dividend revenue is forecast to rise to $767 million, from $243 million in 2010/11.

The budget papers say this is mostly due to WorkCover paying a dividend as well as profitability within the water sector.

They show the Victorian WorkCover Authority is budgeted to record a $157 million net surplus in 2012/13.

Victoria’s average workers’ compensation premium this year is 1.338% of wages, compared with 1.68% in NSW and 1.42% in Queensland.