Financial crisis wipes $600m off value of Worksafe investments

Article from: The Herald Sun
Written By: John Ferguson
September 27, 2008

VOLATILE financial markets have stripped nearly $600 million
off the value of WorkSafe Victoria's investment pool.

The huge fall has sparked alarm bells about Government investments
after the Wall St crisis. WorkSafe accounts show its investment returns
falling nearly 10 per cent in the past financial year amid fears the falls
will have intensified after June 30.

The Brumby Government and WorkCover have defended WorkSafe's
position, arguing the diversified portfolio had achieved gains of more than
6 per cent a year for the past five years.

The $600 million was a net loss on investments for 2007-08.

Finance Minister Tim Holding said the body that manages the state's
workplace safety system was still in strong shape. "Over the past 12
months investments have out-performed the Australian stockmarket
average and since 1999 they have created an extra $1.1 billion through
their carefully managed investment portfolio," Mr Holding said through
a spokesman.

WCV's: So why is Mr Holding telling us that the government cannot
afford to include the injured workrs of the Kennett Era?

Opposition finance spokesman Gordon Rich-Phillips warned that there
might be worse to come, adding forecast reforms to workers' compensation
could add an extra burden to business. "You can't be just loading up the
WorkCover scheme with additional costs," Mr Rich-Phillips said.
Despite the investment blow, the state's workplace injury insurance
scheme remains fully-funded.

WorkSafe chair Elana Rubin said the investment hit needed to be seen
in context. "During the previous four years WorkSafe, like most other
major investors, achieved investment returns far in excess of the long-term
expected return and these drove high net profit outcomes," Ms Rubin said.
Her comments came as the Government released the independent review
into Victoria's workers' compensation legislation. Performed by Peter Hanks,
QC, the review recommendations -- if backed -- would lead to sweeping
changes about the way the system works.