BRIEFING SESSION – Fairer, Simpler Premium

The VWA has put in place proposed changes to the way company premiums are set.  These changes will be put to the board during the first quarter of 2004 calendar year for approval and implementation by 1 July , 2004.

Brian Cook, director of Premium Division was the main speaker.  He began with a brief summary of topics that would be covered by the evenings presentation.  Work Safe would not be changing their role in managing health & safety in the workplace.  However there was an indication that they would play a greater role in the field.  The bulk of the presentation concentrated on issues to introduce a fairer system of calculating premiums. Currently Work Safe collect $1.8b per yr in premiums of which $1.25b is allocated to paying out claims.

• Linking company performance in terms of safety to premium.  Company performance X an Industry rate would be used to calculate the premium.  The company performance will have increase weighting whilst the industry rate will have a lower weighting in the calculation.  Therefore more reward for good performance.  Factors affecting performance will include cost of claims and size of the business.  Determination of the proposed industry index is unclear at present and needs to be developed.  In the current method claims 5 years old still have an effect on current premium calculation.
• Simplifying the calculation
• Revisit stabilisation.  Current arrangement for employers with a remuneration threshold <$1m, the prior rate has been frozen since 2001/02.  Good performing employers get no reward, no incentive and end up with a predictable premium.  The proposals include reducing the threshold or removing it altogether, give more incentives to improve, penalise poor performing employers and go to a variable premium.  Also employers with multiple sites have their premiums calculated for individual sites and Work Safe is looking to change this.
• Simplify the paperwork.  Included in this is employer level calculation and billing plus simplified invoices and notices.  Proposed is a transition of new arrangements spread out over 3 financial years.
• Discourage premium avoidance.  Some employers have found ways to reduce their premiums.  This impacts unfairly on all other employees.

The pace of the presentation was very fast whilst the content to material presented was limited.  VWA has asked for feedback from this presentation by 15 December 2003.  Most got the impression the information was late in being distributed and this was evident during question time.  Many of the industry representing bodies such as VECCI have been privilege to these proposals for some time.  VWA have indicated that a model premium simulator has been developed and is available on the VWA web site.  Feedback can also be provided on the web.  Overall, if premiums are to be reduced it is anticipated that employers will need to show involvement and performance in maintaining a good business sense and uphold the safety of their employees in the highest regard.

Tony Tamburro

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