16/04/2025

Stripping support from injured workers should not be the solution to business concerns about workers compensation insurance affordability in the ACT, says the Australian Lawyers Alliance (ALA).

The ALA is a not-for-profit member organisation made up of legal professionals, many of whom represent injured workers.

ACT ALA members Amy Burr and Amber Wang will be appearing before the Standing Committee on Economics, Industry and Recreation inquiry into insurance costs on Thursday, and call on the ACT Government to resist considering wholesale changes to the ACT workers compensation scheme solely to reduce premiums.

“Our workers compensation scheme is there to help individuals who have been injured at work - by rehabilitating them and assisting them to return into the workforce,” said Ms Amber Wang.

“Sometimes these injuries have long term and serious consequences for the individual, and financial consequences for their families. We have been disheartened to see some public submissions made to the Inquiry indicating injured workers are to blame for increased premium costs.

“We acknowledge that many businesses are struggling at the moment, however, we have not yet seen any hard evidence confirming that ACT workers compensation premium increases are driving businesses out of the ACT.

“In addressing concerns about workers compensation insurance premiums, we need to be very careful to ensure that the focus on safety remains, and that we do not diminish the rights of workers who have been injured while just doing their job.

“In reviewing the financial data available to date, and considering the experiences of our members and their clients, we do not believe there is a financial crisis within the ACT workers compensation scheme,” said Ms Wang.

“In fact, the ACT workers compensation scheme has stood the test of time, and unlike other injury insurance schemes, it is not financially haemorrhaging,” said Ms Amy Burr.

“The ACT Government commissions annual independent actuarial reports into the ACT workers compensation scheme, which includes a review of workers compensation premiums, claim numbers and size. We understand that the most recent report suggested the average premium rate has reduced from 2.10% of wages to 2% of wages. We are still awaiting the ACT Government to release the report which analyses the 2024 data,” said Ms Burr.

The ALA understands that a profit margin of 12% of premiums for insurers is considered reasonable by the actuaries.

“We also ask the Inquiry committee to look into insurer and broker profit margins when considering the cost of workers compensation insurance premiums,” said Ms Burr. “We have observed several submissions indicating the ACT should adopt the Comcare or NSW workers compensation scheme to reduce the cost of insurance premiums. To compare workers compensation schemes requires an in-depth knowledge of the benefits and restrictions of each scheme, the financial viability of the schemes, and the impact on the injured worker and the business.

“We are concerned that looking at how to achieve a small cost saving for an employer, will reduce the rights of ACT workers, and ultimately increase the financial burden on the ACT Government, the Commonwealth and the taxpayer. When not compensated, or under-compensated, injured workers often become more reliant on state and territory health systems, Centrelink, Medicare or the NDIS.

“The priority must always be to ensure that all steps are taken to prevent the occurrence of injuries at work, and that anyone who is injured at work receives the support they need to rehabilitate physically and psychologically, and to return to work if possible.”