Victorian Workcover Authority amends potentially misleading brochures

The Victorian WorkCover Authority has amended and reissued a brochure to over 200,000 Victorian employers explaining the effect of the New Tax System on premiums following an Australian Competition and Consumer Commission investigation.

"Victorian WorkCover Authority made representations in a brochure, Why your premium has changed, which was forwarded to employers, that may have misled employers about the impact of the Goods and Services Tax on premiums";, ACCC Chairman, Professor Allan Fels, said today.

"While Workcover premiums may be increasing for a number of reasons, the increase due to the GST is 10 per cent.

"The increase of 12 per cent announced by Victorian WorkCover Authority is due to other factors, as well as the New Tax System changes.

"These other factors, whilst closely associated to the New Tax System changes, are not prescribed under the New Tax System.

"A 10 per cent increase was applied to cover the GST liability. A further two per cent increase arises because of other tax changes which effect the level of compensation benefits and the costs of some medical and legal services provided to the Victorian WorkCover Authority.

"Section 75AU (2) (b) states that there is price exploitation if the price of the supply is unreasonably high having regard alone to the New Tax System changes. Section 75AU (2) (c) relates to price changes caused by other factors such as suppliers' costs, supply and demand conditions and any other relevant matter which may justify a price increase above the effect of the New Tax System changes".

"The re-issued brochure has been forwarded to employers";.