Back in 2006, Business SA set out to lower the highest WorkCover Levy in the country. It was a key target and one way to assist every business in the State.

Business SA has welcomed the announcement from WorkCover SA that it will reduce the workers compensation average levy rate.

WorkCover recently reported an improvement in its financial position and was able to deliver a reduction in the rate to the local business community.

The reduction in the average levy rate from 3 per cent to 2.75 per cent provided great news for business and a positive result following the ongoing efforts of Business SA.

South Australian businesses have been faced with these high rates while levies interstate have continued to decrease.

Uncompetitive business conditions, such as high levy rates, lead to lower business confidence and investment in the State, impacting on the jobs growth and prosperity for all South Australians.

Business SA was influential and instrumental in achieving long overdue changes to the underperforming scheme and welcomed this first decrease in the levy rate since 2002.

WorkCover also announced that its Bonus Penalty Scheme is finishing from 1 July 2010.

This decision combined with the reduction in the average levy rate means that many employers’ rates will change this year – for the majority it will decrease, however some will experience an increase.

Employers will lose their bonuses and be relieved of penalties. They will also no longer need to deal with the risk of incurring a penalty if a claim is made, which is positive news and will help the focus to remain on return to work.

Levy payments will continue to be based on remuneration paid to workers and the rate allocated to the industry in which they operate, but without any bonus or penalty.

WorkCover advised that reasons for ending the Bonus Penalty Scheme were that the Scheme does not self-fund and employers have to top it up to the tune of $47m per annum.

It stated that there was also no evidence that it improves return to work rates or leads to improved OHS performance.

Please click here for an editorial piece from Business SA’s Director of Policy, David Frith, regarding the average levy rate. The article was recently published in The Advertiser.