Legislative Council Fifty-Second Parliament, First Session (52-1) 52 1 Parliament of South Australia Legislative Council published Bills Workers Rehabilitation and Compensation (Employer Payments) Amendment Bill WORKERS REHABILITATION AND COMPENSATION (EMPLOYER PAYMENTS) AMENDMENT BILL Committee Stage Committee Stage In committee (resumed on motion). Clause 1. The Hon. G.E. GAGO Legislative Council The Hon. G.E. GAGO: A question was asked by the Hon. Rob Lucas to clause 1. I have the answer to that question which I would like to take this opportunity to put on the record. The Hon. Rob Lucas asked about the caps to premium discounts. I confirm that the transitional provisions, including the level of capping and the period over which the caps will apply, will be properly consulted on following the passage of this bill through parliament. I can also confirm that, consistent with the position paper released by WorkCover in July 2011, it is envisaged that transitional arrangements will apply for the first four years of the new approach and that any increase or decrease in the employer's premium rate will be capped at 125 per cent of the previous year's rate in the period 1 July 2012 and 30 July 2016 subject to any changes agreed to during the consultation process. The government is aware that, with any change to the amount employers pay, there needs to be in-built protections. The government has listened to employers and has included transitional provisions which will cap the amount of discount or increase to premiums. In relation to the queries from the MBA about the impact of those employers just encapsulated in the experience rating scheme, it is correct that for an employer the amount of premium based on their own experience will be limited. Smaller employers are significantly less likely to experience a claim, therefore their claims experience is not an appropriate lever to significantly influence behavioural impact on the amount they pay. The larger an employer is the more influence they have over injury prevention and injury management; therefore, it is appropriate that their claims experience is a larger component of their premium calculation. There must be an entry threshold for any scheme like this. The entry threshold to the experience rating system has been determined following analysis of the historical claims reporting data for South Australia and consistent with advice received from the scheme's independent actuary Finity Consulting. Progress reported; committee to sit again.