The Australian Retailers Association (ARA) has warned that the decision to increase WorkCover premiums by 42% will put further pressure on Victorian businesses.
The Victorian Government made the decision to raise the average premium to 1.8% of an employer’s payroll.
According to Victorian Chamber of Commerce and Industry (VCCI), this is the highest in the country, above New South Wales at 1.48% and Queensland at 1.23%.
ARA CEO Paul Zahra said the increased charges will hit businesses that are already experiencing higher costs.
“Many small businesses are already severely challenged around cashflow,” Zahra said. “And our broader sector is experiencing really difficult economic conditions, with a consumer spending slowdown at the same time that operating costs – such as rent, fuel, energy and labour – continue to rise and a wave of retail crime that is impacting retailers’ margins and their teams’ wellbeing.
“This will be a bitter pill to swallow for a lot of retailers, who obviously want to do the right thing by their workers but who are being asked to carry the can for decades of poor decision-making within this scheme.”
Zahra said the ARA understands the need to ensure longevity of the scheme, but said there’s a delicate balance required to avoid sending businesses, particularly SMEs, into the red.
“Many businesses have been very proactive in reducing their level of work injuries, in an effort to reduce their operating costs and will be disappointed that they may not get the full cost-benefit due to this significant increase in premiums,” Zahra said. “These costs can’t continue to be imposed on businesses, particularly small businesses which operate on tight margins.”
Zahra also expressed concerns about potential limitations to mental health claims, amid reports that stress and burnout will no longer be eligible for weekly WorkCover payments.
“This is disappointing for businesses and staff,” Zahra said. “We need to make sure the cumulative impacts of working in a stressful environment remain protected.
“It is especially important for the retail sector, where we are seeing common and repeated instances of antisocial, aggressive and criminal behaviour against staff.
“We will continue to consult with the government to ensure greater protections for retail workers, who are all too often exposed to violent and antisocial behaviour.
“If we can stop this type of behaviour from happening in the first place, then we’ll reduce the number of potential claims, which would be good for workers, good for their employers and good for the scheme’s viability.”
Meanwhile, VCCI CEO Paul Guerra said imposing premium increases on employers without any reform measures is not ideal.
“We need clear commitment to reform, and they must be legislated,” Guerra said. “We cannot be back here again next year with another premium increase.”
Guerra said there needs to be holistic reform of the system with business and unions having a seat at the table.
“The Chamber must be involved in shaping a program to address the mental health crisis among our workforces and we are well placed to do this,” Guerra said.
“The only way to prevent further increases of this nature is to deliver real reform of the system which would result in healthier and happier workplaces.
“Ultimately, every business wants to ensure a viable WorkCover System, but no business wants to wear increases of 40-plus per cent on premiums. Reform is required.
“The business community is willing to engage to guide that reform.”