The Case for a National Workers’ Compensation Scheme 

With the rising cost of workers’ compensation premiums reaching unprecedented levels and state schemes underperforming, the debate around introducing a national workers’ compensation scheme has resurfaced as a priority for the Federal Government.¹

The foundation of Australia’s workers’ compensation systems can be traced back to 19th-century British legislation. Following Australia’s Federation, new workers’ compensation laws were introduced, incorporating a ‘no-fault’ principle.² However, the economic challenges of the mid-1980s and early 1990s shifted the focus toward reducing costs associated with workplace injuries, managing insurance premiums, and improving administrative efficiency. Since the inception of these initial workers’ compensation laws, each jurisdiction has customised its own systems, resulting in a range of inconsistencies in how workers’ compensation laws are implemented and applied. These inconsistencies have today created a deeply unequal, flawed system, leaving employees and employers alike at a significant disadvantage.³

Currently, there are up to 11 different workers’ compensation schemes operating across Australia, each marked by inequality and unfairness. Workers’ compensation coverage varies between each jurisdiction, with constitutional responsibility primarily resting with State and Territory Governments. This has led to a proliferation of inter-jurisdictional inconsistencies relating to: 

• Eligibility for workers’ compensation
• The range and level of payments 
• Access to common law damages 
• Premium setting principles 
• Injury management arrangements 
• Dispute resolution mechanisms ¹

Comparison of workers compensation arrangements in Australia and New Zealand 29th Edition (2023) 

Each scheme is regulated by a separate government body, and employers are required to maintain a policy in each jurisdiction where they employ workers. This includes overseas workers who are seconded to Australia on a long-term basis. The benefits payable to injured workers differ for each scheme, creating a complex and fragmented system.³

The Productivity Commission review found that the cost for multi-state employers meeting the requirements of various jurisdictions, rather than those of a single national scheme, can be in the order of millions of dollars a year. Injured employees of multi-state employers would no longer receive different benefits for the same type of injury depending on where they reside. A national scheme would allow eligible corporations to eliminate the inequity of benefits for their workforce.³

Conclusions

The introduction of a national workers’ compensation scheme could streamline administrative processes, reduce costs for employers, and ensure equitable treatment for all employees, regardless of their location. That, along with self-insurance schemes, represents a significant step towards modernising and unifying Australia’s approach to workers’ compensation.³

References 

[1] Is Now the Time to Introduce a National Workers’ Compensation Scheme? | Aon Insights accessed 31/10/24.

[2] Comparison of Workers’ Compensation Arrangements in Australia and New Zealand 2023 | Safe Work Australia 29 April 2024.

[3] National-Federal-Workers-Compensation-Paper.pdf | Aon Insights accessed 31/10/24.