Media Release - 14 May 2012
Responding to comments by Acting Premier Andrew Stoner that WorkCover was open to rorting, Greens NSW MP David Shoebridge has pointed out that the scheme has been being rorted for a number of years, by private insurers and claims managers, not injured workers.
"In 1997 the fees paid to insurers to just manage claims cost 10 per cent of the amount paid to injured workers; yet in 2010 insurers were creaming off almost one dollar in every four paid to benefit workers.
"With more than $3.9 billion dollars being paid to private insurers in the last 15 years, this growth in bureaucratic paper shuffling has wasted more than $1.6 billion and eroded the scheme's financial sustainability.
"These are appalling results and to date no government has had the courage to tackle the real problem in the workers compensation scheme which is this unchecked growth in bureaucracy and paper shuffling.
"These figures show that the looming deficit in the scheme is not caused by payments for injured workers which over time have hardly kept pace with inflation.
"If payments to insurers had matched inflation, like payments to benefit workers have, the scheme would have saved $1.6 billion.
"With over $1.6 billion wasted in overpayments to private insurers, it is little wonder the scheme is facing financial trouble.
"This Government needs to hold WorkCover accountable for the staggering growth in paperwork that does nothing other than divert money from injured workers to private insurers.
"How can any government in good conscience see a quarter of the amount paid in benefits to injured workers siphoned off to private insurers to simply manage claims?"
"Before a single dollar is taken from injured workers the government must address the paper shuffling that is chewing up almost a quarter of the money paid to injured workers," Mr Shoebridge said.
>From 1997 to 2010 major workplace injuries fell by 53%
>From 1997 to 2010 inflation increased by 44%
>From 1997 to 2010 management fees increased by 236% (more than 5 times inflation)
>From 1997 to 2010 benefits paid increased by 43% (less than inflation)
>From 1997 to 2010 management fees per major injury increased by 620% (14 times inflation)
If private insurer management fees had, like benefits, grown only by inflation then $1.6 billion dollars would have been saved.
In FY 2010 management fees paid to private insurers accounted for 24% of the value of benefits paid to injured workers compared to just 10% in FY 1997
More information: Mark Riboldi 9230 3030 | 0433 753 376