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| 'No basis' for rush to compo changes, The Australian, 20 June 2012 |
| By Imre Saluzinsky, The Australian | |
The NSW Coalition government is rushing draconian changes to benefits for injured workers through parliament amid claims the alleged $4.2 billion black hole in the state's workers' compensation scheme is overstated.
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A report on the scheme, commissioned by Labor-aligned law firm Slater & Gordon and provided to The Australian, has cast doubt on the alleged $4.2bn deficit in the scheme that has led to the changes.
The report, by the Per Capita think tank, says the deficit -- a measure of the gap between the scheme's assets and liabilities -- has blown out largely as a result of external factors, not excessive payments to claimants.
Taking issue with a PricewaterhouseCoopers report commissioned by the government, the Per Capita report says the blowout is the result of adjustments to the discount rate used to calculate future liabilities, which fluctuates in line with sovereign bond yields.
It also accuses the PWC report of overstating likely future inflation, and as a result understating the scheme's assets.
The report concludes that the contribution of increased benefit payments to the scheme's problems "is extremely small relative to the impact of changes in discount rates, inflation rates and investment returns".
The report says the required savings could be achieved by more efficient running of the scheme and "modest premium increases".
Mr Pearce said the scheme's "$4bn deficit is spiralling out of control and we simply cannot afford to wait around".
"The reality is, without these reforms, NSW businesses were facing premium hikes of up to 28 per cent, an increase which would stall economic growth and job creation," he said.
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The entire article can be read online by clicking the link above.
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