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Deteriorating WorkSafe performance creates 'emerging financial risk' for Victoria

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A Victorian Auditor General’s report has flagged concerns with the performance of the state’s workers’ compensation scheme.

The annual report on the state’s finances warns outstanding clams liabilities at WorkSafe (which manages the workers’ compensation scheme), the Transport Accident Commission and the Victorian Managed Insurance Authority increased by 7.2% in the last financial year to $47.3 billion.

“The performance of WorkSafe is the primary reason for the increase,” the report says, adding that it is an emerging financial risk the government needs to “closely monitor and manage”.

The number of injured workers accessing the scheme has gone up, as has the amount of time they spend on the scheme.

“In 2020/21, an independent review of the financial sustainability of the scheme concluded that its financial trajectory is unsustainable,” the report says.

“WorkSafe is developing initiatives aimed at addressing these pressures and managing long-term financial sustainability.

“To minimise the impact on businesses and provide time to explore options before approving premium increases, the government provided WorkSafe with $550 million in 2020/21 to sustain its financial position over the short term.”

The initiatives being looked at focus on prevention, recovery and return to work, and include a review of the WorkSafe outsourced agent model.

A WorkSafe spokesman told insuranceNEWS.com.au “the growth of mental injuries and impacts of COVID-19 continue to place significant pressure on our community, our workplaces and our workers’ compensation scheme”.

“WorkSafe is ensuring the scheme remains contemporary, fit for purpose and sustainable and is developing initiatives designed to have significant impact on workplace health and safety, outcomes for injured workers and the scheme’s financial position,” the spokesman said.

“WorkSafe’s insurance ratio remains well within the preferred funding range of 100-140%.”

Click here to read the full report.