The authority was set up to compensate people injured at work.The New South Wales auditor-general has raised serious concerns about the financial position of the state's WorkCover Authority.
Peter Achterstraat says WorkCover is more than $2 billion in deficit and may not collect enough premiums this year to meet its requirement for sustainable long-term funding.
"We will need to stop people getting hurt at work. Otherwise premiums will have to rise," Mr Achterstraat said.
The auditor-general says a sluggish return on investments and workers attempting to maximise claims are contributing to the deteriorating situation.
He says the Government should consider raiding premiums.
"It does depend to a certain extent on investment returns but last year $4.2 billion in expenses was paid out but only $3.4 billion in premiums and investment income was earned," Mr Achterstraat said.
"The actuarial people tell us that the break-even rate for premiums is higher than the premium rate at the moment."
The report adds to the headaches already faced by the State Government as it seeks to rein in the cost of workers compensation for police officers.
Legislation to replace the costly death and disability scheme for police was introduced to State Parliament today.
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