Mr Joyce said that the average recommended premium rate would be 1.738% of total wages for 2009-10, up from 1.582% in 2008-09,and  representing an overall increase of 9.9%.

“Other than an increase resulting from the introduction of legislative amendments in 2005, this increase is the first in ten years”, said Mr Joyce.

“Western Australia has experienced historically low recommended premium rates over the past few years”, he said, “and this year’s recommended premium rates will still be below the level set in 2007”. 

“The 2009-10 increase is largely due to changed economic circumstances, and takes into account the latest available data on real rates of return, future wage growth and claim costs”, said Mr Joyce.

The recent reductions in real rates of return have exerted significant upward pressure on the premium rates: the risk- free interest rate per annum was 2.7% for the 2009-10 premium rate calculations compared to 6.7% in 2008.

“This direct consequence of the global credit crisis has been offset to some extent by the unprecedented wage growth across the Western Australian workforce in recent years, which continues to exert a downward pressure on the recommended premium rates”, said Mr Joyce.

The increase is not applied uniformly across all 480 premium rating classifications: premium rates in 196 industry classes will decrease and 249 will increase, reflecting the performance of individual industries[1]. 

Mr Joyce said that the increase was necessary to ensure ongoing stability and equity within the workers’ compensation scheme and provide appropriate benefits to injured workers. 

“The impact of the global financial circumstances on Western Australian industry may not yet be fully realised”, he said. “WorkCover WA will continue to monitor the impact of economic change on the key drivers of premium rates, and will respond, should the need arise”, he said.