How the Senate cut 40% off its workers’ comp premium

By Stephen Easton

Wednesday May 27, 2015

It is often said that the cost of workers’ comp premiums are a sore spot for the heads of many Canberra-based departments, agencies and taxpayer-funded corporations, as though their own actions and those of their staff have nothing to do with it.

The ACT Government’s recent decision to take its whole public service out of the Comcare scheme and craft its own is a case in point as it was, at least in part, an attempt to spend less on workers’ compensation than it was shelling out to the federal agency.

But, as an exchange in Budget Estimates demonstrated, Comcare premiums fluctuate from year to year and can go down though good management. Clerk of the Senate Rosemary Laing told Labor’s Penny Wong her small department had seen a 40% drop in the premium, from $217,000 in 2013-14, to $111,000 in 2014-15.

Over the past couple of decades, said Laing, the Department of the Senate’s premiums had generally come down to a lower base level overall. When Wong commented it was a good result, she modestly replied:

“It is good. I do not know if it is entirely a reflection of our performance or perhaps a reflection of the scare that Comcare has had recently with people saying, ‘We are not going to go with them many more.'”

Today, Comcare got in touch with The Mandarin to say Laing is wrong; she can claim all the credit. Comcare’s spokespersons said:

“Dr Laing does her department a disservice — the premium result reflects her agency’s excellent performance. Comcare does not set premiums based on our own whims.”

Of course, she probably wasn’t being entirely serious in suggesting that Comcare might have simply sharpened the pencil on its prices, which are worked out based on formulas designed to make sure the scheme can afford to pay out compensation when required. With prompting from Wong, Laing acknowledged the saving was more likely down to diligence than crazy bargains.

“I think it does reflect efforts that we do make in the department to manage potential case and to try to find solutions before they become Comcare cases.”

The workplace insurer says it will “continue its strong focus on working with agencies to achieve more improvements in premiums over the next year” and explained what led to Laing’s sterling result:

“The significant fall in the Department of the Senate’s premium for 2015-16 is based on the department’s strong claims performance and independent actuarial advice on the expected cost of claims for the Comcare scheme for the coming financial year.

“The result for the Department of the Senate was driven by a decrease in assumed claim frequency in response to favourable developments for the 2011-2013 calendar injury years. There were no further claims reported for these years, and the department has not reported any claims for the 2014 calendar year.”

Read more at the Mandarin: What’s wrong with Comcare? ACT wants out, will Abetz act?

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