14-11-2008
Greens MLC Mark Parnell has raised concerns in Parliament about a 26%
increase in fees paid to the WorkCover claims manager, despite the failure
to deliver a promised reduction in the Corporation's unfunded liability.
In 2006, WorkCover CEO Julia Davison, when announcing the appointment of
Employers Mutual Limited (EML) as WorkCover's sole outsourced claim agent,
promised the new arrangement would cut claims liability 'by up to$100 million
a year after only two years', and stated EML's remuneration would be 'tightly
linked' to 'reducing WorkCover's liabilities'.
In the Corporation's 2007/08 Annual Report, the cost of claims management
has increased from $25.1 million to $31.8 million in 12 months. Yet, since EML
became sole claims agent, WorkCover's unfundedliability has increased by
$600 million.
"Outsourcing WorkCover's claims management is a failed experiment.
Admin costs have jumped by a quarter in just one year at the same time as
WorkCover's unfunded liability has ballooned. All the heart-ache for workers
through the slashing of their benefits has come to nought," said Greens MLC
Mark Parnell, an outspoken critic of the Rann Government's changes to
WorkCover that passed Parliament in August this year.
"Not only is WorkCover in a far worse financial position, the claims agent who
promised to slash admin fees has pocketed a 26% increase injust one year.
"Rann's WorkCover priorities couldn't be any clearer: employers and the
private claims agent make windfall gains, while employees' benefits are
slashed and WorkCover's financial position sinks.
The Rann Government has punished injured workers, while allowing
WorkCover's poor management to lurch on with their poor performance.
"Instead of outsourcing, WorkCover should take back claims management.
"Ensuring a safe return to work for injured workers is a core WorkCover
function, not an add-on," he said.
For further comment contact Craig Wilkins on 0434 007 893
www.vic.greens.org.au
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