Master Painters Australia
|
Master Painters Australia |
|
|
FOR IMMEDIATE RELEASE
WORKERS COMP. RATE CHANGES FROM 1 JULY 2003 A DOUBLE WHAMMY FOR CONTRACTORS18 June 2003 From 1 July 2003, the workers compensation insurance premium percentage rate for painting contractors rises to 11.91% (previously 11.86%) and, at the same, a new, broader definition of “wages” is introduced.
The new definition of “wages” will include the value of ALL payments and benefits made by the employer or head contractor to or on behalf of workers. The benefits to be included in the definition of “wages” will include superannuation and the value of any other benefits which are subject to fringe benefits tax.
On several occasions over the past few months leading up to the changes, Master Painters Association has met with Minister Della Bosca and senior staff at WorkCover to warn against inconsistencies in how the new rules will apply. We had been given to believe that the broadening of the wage definition base would mean a lower premium rate. HOWEVER…… once the dreaded F factor (which takes into account the previous year’s industry-wide claims experience) comes into play, the result for painters is a double whammy: the percentage rate has RISEN by 0.05% (from 11.86% to 11.91%) and it is now to be calculated on a wage definition base at least a 9% and probably more like 10.3% greater. The result will be premiums at least 11% higher from 1 July 2003.
The Association predicts that we can look forward to an even higher rate of non-compliance than the disastrous level we already suffer. The more expensive it becomes to comply, the more attractive it becomes NOT to comply. The greater the level of non-compliance, the greater the burden (and cost) that falls on those who DO comply, and so even greater becomes the appeal of not complying. And around and down the spiral goes.
The NSW government MUST do something serious to rope more (ie ALL) contractors into the system. The 2,339 policies taken up by painting contractors in 2001/2002 numbers at least 7,500 short of the number of licensed contracting firms (and there are several thousand unlicensed contracting firms in addition to that number). The 7,194 workers they declared covered by those policies numbers at least 2,500 short of the number of painting “employees” who received income tax group certificates that year. If we allow for duplication of some of the people declared (most painters work for more than one contractor in the course of a year), the number of full-time workers covered is more likely to have been 5,000 short of the mark.
The wage audit system operated by the workers comp. insurers in an attempt to enforce proper levels of compliance is a joke. If only 25% of contractors have insurance policies (covering less than 50% of those who should have been covered), the insurance audit system – if operated only by the insurance companies themselves - can identify and audit only that 25%. Who audits the insurance declarations of the other 75% if they don’t actually make declarations in the first place? The insurance companies don’t even know who they are.
There is an urgent need to alter the focus and process of auditing workers comp declarations to concentrate on audits of those who do NOT make declarations, rather than those who do. The logical carriage of that kind of auditing lies with the body that has the most complete records of who the contractors are – ie the public licensing authority, not the private insurance institutions. Master Painters Association believes that proof of workers compensation insurance should be a condition for issue and renewal of building trade contractor licenses. Even if the insurance taken out is merely a shell for “nil” workers receiving “nil” wages, at least we will have identified who it is we are asking to comply, which would enable the private insurance companies to carry the audit work burden if the public licensing authority is unable or unwilling so to do.
For More Information Contact: |
|
Send mail to
info@masterpainters.com.au with
questions or comments about this web site.
|
