Bulk-buy bid to reduce premiums

DANDENONG manufacturers could slash their WorkCover premiums by up to 40 per cent if authorities give a unique plan the go-ahead.
South East Melbourne Manufacturers’ Alliance (SEMMA) is pushing the Victorian WorkCover Authority to allow it to form a sub-group of manufacturers who can ‘bulk buy’ a premium to save money.
If the plan is approved, it will be the first of its type in Victoria.
WorkCover premiums are calculated on a combination of a fixed industry rate, and a variable rate that is measured for each business by its performance.
According to SEMMA executive director Paul Dowling, premiums for small-to-medium businesses are calculated using a higher percentage of industry rate in contrast to the performance-based rate.
“Even if you are a good employer, you are not being rewarded under that system,” he said.
But, he said larger employers had their premiums calculated by safety performance, and this led to much cheaper premiums.
He said SEMMA was mainly comprised of small and medium businesses, but a clause ‘tucked away’ in legislation meant those businesses with a good safety record could group together to appear as a large company for premium calculation.
“Each of you would still have your own policy,” he told the audience of manufacturers.
“It is just that the premium would be calculated based on a large company as opposed to smaller ones.”
Mr Dowling said SEMMA estimated premium reductions of between 10 to 40 per cent for each manufacturer, which could save business owners hundreds of thousands of dollars each.
Consultant to the project, ABRM International, is helping SEMMA negotiate the deal with the Victorian WorkCover Authority.
Mr Dowling said a working group was formed and had set a goal of June next year to establish the deal.