In the current economic climate there is a lot of media about large corporations being the victims of their own greed and poor planning.  Share values have disappeared, companies are raising capital divesting themselves of assets and, sadly, shedding staff.

But what is the picture in our own patch of workplace health and safety issues?

According to a report in the Australian Financial Review (AFR) (page 5, not available online) on 14 April 2009, the costs of work-related injury and disease has increased to $A57.5 billion.  This represents 5.9% of the country's gross domestic product, up from 5% in 2000-01.

Of perhaps more concern is the sectors of society which are estimated to bear these increasing costs.  49% of costs are borne by workers, 47% by the community, and 3% by the employers.  Even if the insurance costs were allocated to employers, this would only amount to 18% of the injury and diseases costs.

The figures from the report conducted by the Australian Safety & Compensation Council could justify the push by some in the OHS profession to move workplace safety into the area of public health.

The information currently available for State systems seems very bleak compared to the national costs, and segmented, costs above.

On 1 April 2009 WorkCover in South Australia reported a half-year net loss of $313 million. WorkCover CEO Julia Davison said in a media release that

"the global crisis is, as expected, taking its toll.  In the last six months stock markets have declined, investors have experienced significant losses, and interest rates have fallen significantly," she said  "Like all investors, WorkCover has been hit hard by the global financial downturn."

Earlier in March 2009, the Chair of the WorkSafe Board Elana Rubin said

"the significant downturn on the world financial markets and reduction in interest rates had combined to drive a net loss of $1.42 billion for the half year.  Whilst interest rate reductions are good news for those of us with mortgages, they have the opposite effect on our scheme - in the half year to 31 December 2008, the unprecedented level of interest rate cuts negatively impacted our net result by $645 million."

Again according to an AFR article, 7 April 2009, the WorkCover NSW fund fell by $2.3 billion - the $625 million surplus in 2007-08 has plunged to a $1.77 billion deficit.

WorkCover NSW has talked in the past about its positive achievements, and historically, they are right.  In their Annual Report 2007-08, they say (page 8 )

"The WorkCover Scheme's financial position has improved from a deficit of $3.2 billion in 2002 to a surplus of $625 million in June 2008."

"Accentuate the positives" is the government mantra across all departments but how do you continue to do this when your funding model has collapsed.  The AFR report says that Standard & Poor has estimated that this deficit represents 3% of the government's consolidated revenue.  WorkCover is just one authority that relies on stockmarket returns.

The Minister, Joe Tripodi is quoted in media reports as saying that the deficit was expected and is understandable and that the workers compensation scheme is "sound".

Richard Gilley, a risk management consultant, said that economic downturns often coincide with an increase in the "frequency and severity of claims".

Tripodi has pledged not to increase premiums as that is the insurance cost to business, but one has to ask why not?  Premiums have been reduced throughout Australia during the "good" economic times with the understanding that this would increase the profitability of business and, maybe, just maybe, provide additional funds for business to reinvest in the safety levels of the business.

Perhaps this is the wrong time to increase premiums but the question should be asked nevertheless.

It is recommended that those government authorities who accept their excessive high premiums as the cost of operating in their sector be audited and the results presented to the board and the governing authority.  There are government authorities who do not recognize that the millions they pay in premiums originate from taxpayers and that, in 2008, maybe the community deserves the money that is being wasted in poorly-managed OHS and Return-To-Work systems in the public sector.