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						 Workplace	
	 Safety	Board	
	     of	
	 Tasmania
Annual
  REPORT
    2000	–	01
     Workplace
       Safety
    Board of
      Tasmania
Annual
  REPORT
     2000–01
The Hon. Paul Lennon MHA
Minister for Infrastructure, Energy and Resources




              Workplace Safety Board of Tasmania
                  Annual Report for 2000–2001

On behalf of the Workplace Safety Board of Tasmania, I have pleasure in submitting to you,
for presentation to Parliament, the Board’s Annual Report for the year ended 30 June
2001.


The financial statements contained in this report have been prepared in accordance with
the provisions of the Financial Management Audit Act 1990.




J P McAlpine

CHAIRPERSON
    Contents




                General Information ..................................................................................................................7


                    From the Chair..................................................................................................................................8


                    Workplace Safety Board of Tasmania ..............................................................................................9


                    The Year In Review .........................................................................................................................10


                    Workplace Safe ...............................................................................................................................11


                    National Issues ................................................................................................................................12


                    Legislative changes .........................................................................................................................13




                Scheme Operation and Performance Review .......................................................................17




                Statistics ...................................................................................................................................43


                    Workers Compensation Statistics 12 Months Ending June 2001 ................................................44


                    Appendix A Medical Costs ............................................................................................................65




4    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Contents




      Appendices ...............................................................................................................................69


          Appendix 1 – Licensed Insurers ....................................................................................................70


          Appendix 2 – Self-Insurers ............................................................................................................71


          Appendix 3 — Publications List ....................................................................................................72


          Appendix 4 – Telephone Enquiries and Publications Requests ..................................................74




      Financial Statements ...............................................................................................................77


          Nominal Insurer ..............................................................................................................................78


          Independant Audit Report .............................................................................................................79


          The Nominal Insurer Financial Statements for the Year Ended 30 June 2001 .........................80


          Independant Audit Report .............................................................................................................88


          Workplace Safety Board of Tasmania’s Workers Rehabilitation
          and Compensation Fund Financial Statements for the Year ended 30 June 2001.....................89




                                                                        Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT                             5
General Information
    From the Chair



    I am pleased to report that during the year to 30 June        Continued effort needed
    2001 workplace accidents continued to decline, falling
    by 4.3% from 11,688 to 11,323. A much more detailed           I cannot emphasise too strongly that it is only through
    analysis of the scheme’s performance follows later in this    the continued, collaborative efforts of all workplace
    report.                                                       partners that a sustained improvement in workplace
    This continued decline in the number of workplace             safety can be achieved.
    accidents is in no small part due to the continued success
    of the Workplace Safe campaign.                               The Amendment Act
    As reported last year, campaign research identified three
    attitudinal groupings within the Tasmanian workforce:         In December 2000, Parliament passed the Workers
    the Committed (23%), the Uninvolved (32%) and the             RehabilitationandCompensationAmendmentAct2000
    Obstructed 45%).                                              (the Amendment Act). The Amendment Act commences
                                                                  on 1 July 2001. As well as making significant changes to
    The third phase of the Workplace Safe campaign, which         the benefits model the Amendment Act replaces the
    launched in May 2000, targeted the Obstructed attitudinal     Workplace Safety Board of Tasmania with a new Board –
    group.                                                        The WorkCover Tasmania Board.
    From this research the Board has adopted a multi-
    pronged advertising approach. The advertising aimed at        The New Board
    the Obstructed group included a billboard depicting a
    severely mangled hand. This attracted widespread              I would like to thank my fellow Board members for their
    attention from media articles, talkback radio and even a      tireless contribution to improving the Tasmanian Workers
    cartoon in The Mercury.                                       Rehabilitation and Compensation outcomes. Some will,
    In October the Board agreed that the billboard had            no doubt, return to provide their services to the new
    captured Tasmania’s attention and that to continue to         Board.
    show the graphic in public space advertising would be         I have not sought a position on the new Board. I wish the
    counter-productive. This resulted in a patch being placed     new Board and its Chair well for the future management
    over the image with the slogan ‘Covering it up won’t          of the Tasmanian Workers Rehabilitation and
    make it go away’. I took great pleasure in applying the       Compensation Scheme.
    first patch myself.
                                                                  I would like to record my thanks to Jennifer Linton,
    I would like to congratulate the management and staff of      Marilyn Marshall and Judy Parnell. Their efforts to ensure
    The Stornoway Group, to whom the 2000 Workplace Safe          the smooth operation of the administrative work of the
    Award was made in recognition of the priority their           Board were much appreciated.
    Integrated Management System gave to occupational
    health and safety.                                            Finally I hope that Board members and WST Staff are as
                                                                  proud as I am that the period during which I was
                                                                  Chairman of the Board was characterised by decreasing
    HIH                                                           scheme costs, a declining number of claims and better
                                                                  rehabilitation outcomes. I would encourage you to
    On Thursday 15 March 2001, HIH Insurance Limited              examine this Annual report, as it provides an instructive
    announced it had received approval from the NSW               analysis of Workers Compensation in Tasmania.
    Supreme Court to place the company into provisional
    liquidation. This collapse of a major insurer within the
    Tasmanian Workers Rehabilitation and Compensation
    Scheme will no doubt have significant repercussions
    both in this year and over the next 7–10 years.               J.P. McAlpine
                                                                  CHAIRMAN




8      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania



The Workplace Safety Board of Tasmania was established          •	 managing	the	workers	compensation	database	to	allow	
by the Workers Rehabilitation and Compensation Act                 review of and reporting on scheme performance
1988 and is responsible for:
                                                                •	advising	the	Minister	on	matters	relating	to	workers	
•	overseeing	 the	 operation	 of	 Tasmania’s	 workers	            compensation, workplace health and safety and
  rehabilitation and compensation scheme                          rehabilitation programs
•	reviewing	 the	 incidence	 and	 cost	 of	 occupational	       •	promotion	and	education	about	accident	prevention	
  injuries and disease                                            strategies, development of healthy and safe work-
                                                                  places, and effective occupational rehabilitation of
•	reviewing	insurer	performance	and	premium	levels
                                                                  injured workers and their early return to work
•	issuing	 licenses	 and	 permits	 to	 insurers	 and	 self-
                                                                Workplace Standards Tasmania provided administrative
  insurers and overseeing the operation of the Nominal
                                                                and other support to the Board.
  Insurer
•	 managing	the	Workers	Compensation	Fund




                            (Back L to R) Ian Davey, Geoff Tremayne, Jim McAlpine, George O’Farrell
                                (Front L to R) Neale Buchanan, Lynne Fitzgerald, Robert Walters


The members of the Board are:
Mr Jim McAlpine            Chairperson, appointed by the Minister for Infrastructure, Energy and Resources
Mr Geoff Tremayne          appointed by the Minister for Infrastructure, Energy and Resources
Mr Ian Davey               appointed by the Minister for Infrastructure, Energy and Resources
Ms Lynne Fitzgerald        nominated by the Tasmanian Trades and Labor Council
Mr Neale Buchanan          nominated by the Tasmanian Chamber of Commerce and Industry
Dr Robert Walters          representative of medical practitioners
Mr George O’Farrell        Deputy Secretary, Department of Infrastructure, Energy and Resources

This Board will serve up until 30 June 2001. A new Board will be appointed from July 2001 as part of the changes to
the Workers Rehabilitation and Compensation Act 1988 and will be known as the WorkCover Board Tasmania .



                                                                 Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   9
     The Year In Review



     Scheme Performance                                            During the year five employers were prosecuted for
                                                                   failure to hold a workers compensation insurance policy.
     In accordance with the requirements of the Workers            All five employers pleaded guilty. Three were located in
     RehabilitationandCompensationAct1988,theWorkplace             the south of the State and one each in the north and
     Safety Board of Tasmania commissioned an actuarial            northwest.
     review of the Tasmanian Workers Compensation Scheme’s         The investigation and prosecution of three of the cases
     performance for the 2000–01 year.                             stemmed from workers’ complaints, and routine
     Some of the key points of that review are shown below:        compliance checks identified the remaining two.
     •	The	 average	 claim	 cost	 for	 the	 payment	 year	 has	
       reduced by 6%, to $8,885 per claim.                   Review of Licence and Permit
     •	Based	on	the	projected	ultimate	number	of	claims	for	 Conditions
       the 2000–01 accident year, there was a reduction of
       545, or 2%, compared to the previous twelve months.         A review of licence and permit conditions for licensed
                                                                   and self-insurers was approved by the Board in 2000, and
     •	Claim	payments	for	the	year	totalled	$122.8	million,	a	     in line with information reported last year the process
       reduction of 4.4% over the previous twelve months.          has been inclusive and consultative.
       All cost components decreased with the exception of
       legal and investigation costs which increased by            Steps undertaken have so far included:
       18.5%.                                                      •	An	 actuarial	 assessment	 of	 the	 outstanding	 claims	
     •	Premium	rates	have	risen	to	over	3%	of	wages.                 estimates for self-insurers, to assist in determining
                                                                     adequacy against the solvency provisions in the
     The actuary’s full report is contained in this Annual           existing permit conditions;
     Report.
                                                                   •	A	presentation	to	the	Board	by	the	current	auditors	
                                                                     relating to changes or improvements in the current
     National Data Set For Compensation-Based                        conditions and performance standards;
     Statistics                                                    •	A	survey	among	the	self-insurers	seeking	comment	on	
                                                                     the current standards; and
     The recording requirements of the second edition of the
     National Data Set (NDS) was implemented in Tasmania           •	Consultation	with	other	jurisdictions	about	approaches	
     on 1 July 2000. The second edition was accepted by the          to solvency issues and self-insurers.
     Department of Workplace Relations Advisory Committee          The review is continuing.
     (DOWRAC) and the National Occupational Health and
     Safety Commission Performance Monitoring Advisory
     Committee (NOHSC-PMAC) in April 1999. Workplace
     Standards Tasmania was formally advised of the changes
     in August 1999.
     The primary purpose of the National Data Set is to
     produce national and nationally comparable workers
     compensation-based statistics. The data are also used in
     the Comparative Performance Monitoring (CPM) Project
     auspiced by the Workplace Relations Minister’s Council.
     In late 1999 the Workplace Relations Ministers Council
     directed that work should commence to secure the long-
     term data requirements of the Comparative Performance
     Monitoring System.
     It was subsequently decided to review the National Data
     Set and to incorporate the data requirements of the CPM
     system in a new edition of the NDS. The review is
     expected to be completed by June 2004.


     Compliance


10      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safe



During 2000-2001, the third phase of the Workplace Safe       slogan ‘Covering it up won’t make it go away’. Advice
campaign (launched in May 2000) continued. During             was sought from a child psychologist, who advised that
this time planning was in progress for the manual             this solution would solve the concern about children
handling campaign, which will be launched in October          being affected. The public response was positive and we
2001.                                                         received positive media coverage for the solution.
As reported last year, the third phase of the campaign        While phase three of the campaign was running, planning
was aimed at an attitudinal group market that research        was under way for the next phase, which was to focus on
had identified as the Obstructed.                             specific injuries and industries. Manual handling – the
                                                              biggest single cause of workplace injury – was chosen,
The research had found that three attitudinal groups
                                                              with the secondary goal of communicating this issue to
existed in the Tasmanian workforce:
                                                              the nine black spot occupations.
•	The	Obstructed,	consisting	of	45%	of	the	workforce.	
                                                              During 2000-2001, work commenced on a body strain
  Characteristics of this segment include higher than
                                                              prevention kit, testimonial advertising and a series of
  average rates of injury, higher than average perceptions
                                                              television advertisements promoting the availability of
  of risk, concern about personal safety, feeling thwarted
                                                              the kit. This stage of the campaign is planned to start in
  by cultural and attitudinal barriers, taking short cuts
                                                              September.
  (safety not always given first priority) and the belief
  that there is a lot more they could do to prevent           Workplace Safe Week, an annual feature of the campaign,
  accidents in the workplace.                                 was held from 15–21 October 2000 and incorporated
                                                              the Workplace Safe Awards. The Awards were presented
•	The	Uninvolved,	consisting	of	32%	of	the	workforce.	
                                                              at a luncheon on Friday 20 October with the Stornoway
  Characteristics of this segment are that they do not see
                                                              Group judged the overall winner. The company was also
  themselves as being at risk from a workplace injury or
                                                              a winner in the Best Workplace Health and Safety
  illness, and have lower than average concern about
                                                              Management Program individual category.
  safety.
                                                              Consultation following the Awards found that there was
•	The	Committed,	consisting	of	23%	of	the	workforce.	
                                                              a need for winners to be more recognised among their
  This segment is characterised by a pro-safety work
                                                              peers. This led to a decision that next year’s Awards will
  culture in which management and workers share a
                                                              be presented at a gala evening ceremony. Planning was
  strong commitment to ensuring a safe and healthy
                                                              under way in the first part of 2001 for this event.
  work environment.
                                                              Workplace Safe publications continued to be in high
The Research also identified nine ‘black spot’ occupational
                                                              demand during 2000-2001 with over 2475 requests for
groups most at risk of severe injury. These groups are:
                                                              publications received and over 169,000 publications
The advertising aimed at       the Obstructed segment         provided.
1. Trades Assistants          6. Agricultural Labourers
                                                              A number of new publications were also produced.
2. Nursing Occupations        7. Machine Operators            These included:
3. Metal Tradespersons        8. Schoolteachers
4. Road Transport Drivers     9. Sales Assistants             •	A	Guide	to	Workers	Compensation	in	Tasmania
5. Cleaners                                                   •	Workers Rehabilitation and Compensation Act 1998 –
                                                                The Amendments
continued throughout the 2000-2001 financial year. The        •	Play	it	SAFE	Working	at	Height
billboard, depicting a severely mangled hand, attracted
                                                              A full publications list is provided on page 72.
widespread attention – media articles, talk-back radio
and even a cartoon in The Mercury. While the Board
knew the billboard would attract attention, claims that it
was causing children nightmares prompted the Board to
review its position without backing away from the
original intent of the billboard, which was to confront
people with the reality of a workplace accident. In
October a patch was placed over the image with the




                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT     11
     National Issues



     By far the most significant issue that confronted the         Occupational Health and Safety Administrators Group to
     Tasmanian workers compensation scheme was the                 form the Heads of Workers Safety Compensation
     collapse of the HIH insurance company. The Government         Authorities. This move was in recognition of common
     prepared amending legislation to ensure the continuing        representation and goals of the previous two groups,
     viability of both general industry and the insurance          and it will provide a valuable resource to both the
     sector.                                                       National Occupational Health and Safety Commission
                                                                   (NOHSC) and the Workplace Relations Ministers’ Council
     Significant work was undertaken on the development of
                                                                   (WRMC).
     the third performance monitoring report, titled
     Workplace Relations Ministers’ Council, Comparative           A major influence on the WST Divisional Planning process
     Performance Monitoring – Australian and New Zealand           was the incorporation of, and reporting on the adoption
     Occupational Health and Safety and Workers                    of the National Occupational Health and Safety
     Compensation Schemes.                                         Improvement Framework that was developed by NOHSC
                                                                   and endorsed by WRMC.
     During the year the Heads of Workers Compensation
     Authorities Group was amalgamated with the




12      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Legislative changes



In November/December 2000, Parliament passed the              The New Board
WorkersRehabilitationandCompensationAmendment
Act 2000 (the Amendment Act). The Amendment Act               The Amendment Act abolishes the Workplace Safety
commenced on 1 July 2001. It makes a number of                Board of Tasmania and establishes a new Board – The
significant amendments to the Workers Rehabilitation          WorkCover Tasmania Board. The WorkCover Tasmania
and Compensation Act 1988 (the Act).                          Board (the Board) consists of the Secretary of the
The amendments were initiated by a Joint Select               Department of Infrastructure, Energy and Resources (or a
Committee (JSC) inquiry into the Tasmanian workers            person nominated by the Secretary) as the chairperson
compensation system. The JSC was established by               of the Board, two representatives from the Tasmanian
Parliament in 1996. The JSC report, making a number of        Chamber of Commerce and Industry, two representatives
recommendations, was tabled in Parliament in 1998.            from Unions Tasmania, a legal practitioner with
                                                              experience in workers rehabilitation and compensation
The Amendment Act gives effect to many of the JSC’s           matters, a person with extensive experience in workers
recommendations, as well as recommendations made by           compensation insurance business, and a medical
the Workplace Safety Board of Tasmania intended to            practitioner. Only four members (the Tasmanian Chamber
clarify a number of provisions in the Act. The amendments     of Commerce and Industry members and Unions
are aimed at improving the scheme – by providing              Tasmania members) are entitled to vote on issues to be
greater income security for long-term injured workers         determined by the Board.
and their families, by reducing the cost of the scheme,
and by balancing the interests of workers and                 The Board’s work includes some of the functions of its
employers.                                                    predecessor, the Workplace Safety Board of Tasmania,
                                                              together with the following new functions:
The Amendment Act makes changes in relation to:
                                                              •	Making	 recommendations	 to	 the	 Minister	 on	 the	
•	Scheme	governance	(to	be	discussed	in	more	detail	            policy and objectives of legislation relating to workers
  below);                                                       rehabilitation and compensation and workplace health
•	Scheme	coverage;                                              and safety, and the amendment or replacement of
                                                                such legislation;
•	Benefits	model	(to	be	discussed	in	more	detail	below);
                                                              •	Monitoring	 and	 reporting	 to	 the	 Minister	 on	 the	
•	Premium	setting;                                              effectiveness of the legislation and the performance of
•	Injury	management;                                            the systems to which the legislation relates;

•	Dispute	resolution;                                         •	Monitoring	 and	 reviewing	 the	 Department	 of	
                                                                Infrastructure, Energy and Resources in connection
•	Insurance;                                                    with the exercise of powers and performance of
•	Service	providers;	and                                        functions under the workers rehabilitation and
                                                                compensation legislation and workplace health and
•	Administration.                                               safety legislation;
The amendments apply in respect of injuries suffered on       •	Promoting	 and	 supporting	 the	 effective	 injury	
or after 1 July 2001, with the exception of some procedural     management of injured workers;
amendments which apply to all claims that were not
finalised before 1 July 2001.                                 •	Collecting	 and	 publishing	 statistics	 –	 broadened	 to	
                                                                include aspects of the scheme other than workers
                                                                compensation and costs;
                                                              •	Advising	the	Minister	on	any	matter	relating	to	the	Act	
                                                                that the Minister refers to the Board; and
                                                              •	Issuing	guidelines	for	the	assessment	of	permanent	
                                                                impairment.




                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT       13
     Legislative changes



     Changes to the benefits model                                   determination of the claim; serious and wilful misconduct;
                                                                     intentional or self-inflicted injury etc.
     The Amendment Act makes substantial changes in
     relation to benefits for workers and dependants of              Medical and Rehabilitation Expenses
     deceased workers.
                                                                     A worker who suffers from a work-related injury or
                                                                     disease is entitled to payment of reasonable medical and
     Weekly benefits                                                 rehabilitation expenses. The Amendment Act limits
     Under the Act, a worker who is unable to work as a result       payment of these expenses to ten years (in line with the
     of a work-related injury or disease is entitled to weekly       maximum period for weekly payments).
     payments of compensation.
     Weekly payments are based on the worker’s normal                Lump Sum Compensation for Permanent Impairment
     weekly (pre-injury) earnings, averaged over the twelve-         The Act provides for the payment of lump sum
     month period immediately before the start of the                compensation to a worker who suffers permanent
     incapacity, or the worker’s ordinary-time rate of pay for       impairment as a result of a work-related injury. The
     the employment in which the worker was engaged                  amendments replace the Table of Maims with a new
     immediately before the incapacity, and are subject to           method of assessment of permanent impairment based
     ‘step-downs’. The amendments increase the size of the           on the concept of impairment of the whole person.
     step-downs and the period for which those step-downs            Lump sum compensation is payable where the degree of
     apply. The new step-downs are:                                  whole-person impairment is at least 5% in the case of a
     •	0	 to	 13	 weeks	 of	 actual	 incapacity	 –	 100%	 of	 the	   physical injury other than an injury involving the loss of
       weekly payment;                                               a finger or toe (where compensation is payable for a
                                                                     degree of whole-person impairment less than 5%), and
     •	14	 to	 52	 weeks	 of	 actual	 incapacity	 –	 85%	 of	 the	   at least 10% in the case of psychiatric impairment. In the
       weekly payment;                                               case of industrial deafness, lump sum compensation
     •	53	weeks	to	10	years	of	actual	incapacity	–	70%	of	the	       may be awarded where the level of binaural hearing
       weekly payment.                                               impairment exceeds 5%.

     The period for which a worker can receive 100% weekly           The amendments provide that the assessment of the
     payment has been increased from six weeks to 13 weeks.          degree of permanent impairment is to be made in
     Statistics indicate that 95% of injured workers return to       accordance with guidelines issued by the WorkCover
     work within the first 13 weeks following the injury. The        Tasmania Board, or if no applicable guidelines have been
     increase in the size of the step-downs is expected to           issued, in accordance with the Australian Medical
     affect fewer workers because of the delay in the                Association Guides to the Evaluation of Permanent
     application of the first step-down. There is also a             Impairment (Fourth Edition, Third Printing) 1995.
     safety-net provision of 70% of the basic salary for             Assessment of permanent impairment is to be undertaken
     low-income workers.                                             by a medical practitioner accredited by the Board as a
                                                                     medical assessor.
     Before the amendments, there was a dollar cap on
     weekly payments, and a worker receiving ‘average’ wages
     would generally reach this limit within approximately           Common Law Claims
     four and a half years. The Amendment Act has removed            A worker may be able to take action against his or her
     the dollar cap. As shown above, weekly benefits are             employer for damages at common law where negligence
     available at 70% of the weekly payment for up to ten            on the part of the employer (or a person for whom the
     years. This provides for a substantial increase in the          employer is responsible) caused or contributed to the
     maximum amount of weekly payments available to                  injury or disease. The amendments restrict access to
     workers suffering long-term incapacity.                         common law. Under the new scheme, a worker can only
                                                                     access common law damages where his or her degree of
     The Amendment Act provides for the payment of weekly            whole-person impairment is at least 30%. There is no
     payments on a ‘without prejudice’ basis from the date of        limit on the amount of common law damages that can
     the claim until liability is accepted or the Workers            be awarded. The amendments also provide that a worker
     Rehabilitation and Compensation Tribunal (the Tribunal)         who wishes to pursue a common law action must lodge
     makes a genuine dispute finding. These payments can             with the Tribunal an election to claim damages within
     subsequently be recovered from the worker in certain            two years after the date on which weekly payments first
     circumstances, e.g. fraud; obstruction or delay of              became payable. Statutory benefits continue to be paid


14      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Legislative changes



after the election.                                        and payment of a weekly allowance to dependent
                                                           children.
The restriction on access to common law is considered
necessary to reduce the overall costs of the scheme,
allowing for an increase in long-term statutory benefits   Redemption of Statutory Benefits
and death benefits. Most other states have abolished or    Before the commencement of the Amendment Act, the
imposed restrictions on access to common law.              redemption of statutory benefits was not permitted. As
                                                           a result of the amendments, redemption of statutory
Death Benefits                                             benefits is permitted where 12 months have elapsed
                                                           from the lodgment of the claim, and the injury is stable
Dependants are entitled to lump sum compensation in
                                                           and stationary. A redemption may be reviewed and
relation to the work-related death of a worker. The
                                                           allowed or disallowed by the Tribunal.
maximum lump sum compensation available has been
substantially increased under the amendments.
To help a deceased worker’s family come to terms with
the financial loss brought about by the death of the
primary income earner, the new scheme also introduces
weekly payments to dependent spouses for two years,




                                                           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   15
Scheme Operation and
Performance Review
     Review Of Tasmania’s 2000/01
     Workers Rehabilitation & Compensation Experience


                                                                    Prepared by:
                                                   BRIAN BENDZULLA, B.Sc. UED
                                          Fellow of the Institute of Actuaries of Australia
                                                                        Director
                                                              14th September, 2001

     CONTENTS
                 EXECUTIVE SUMMARY .........................................................................................................19

                 Section        Description
                     1.         Introduction and Purpose of the Report .......................................................................21
                     2.         Data Supplied ..................................................................................................................21
                     3.         Projection Methodology ..................................................................................................23
                     4.         2000/01 Claim and Payment Experience .......................................................................23
                     5.         Projected Ultimate Aggregate Cost Outcomes ..............................................................24
                     6.         Licensed Insurer Experience ..........................................................................................24
                     7.         Licensed Insurer Profitability .........................................................................................25
                     8.         Comments On Premiums ................................................................................................26
                     9.         Self-Insurer Experience ..................................................................................................26
                     10.        Security of Entitlements .................................................................................................27
                     11.        Level of Certainty ............................................................................................................27
                     12         Sensitivity Analysis ..........................................................................................................28


                 Appendix A – Overall Payment and Claims Data .................................................................29

                 Appendix B – Projection Model and Methodology ..............................................................32

                 Appendix C – Per Claim Inflation Adjusted Payments (Total) .............................................33

                 Appendix D – Per Claim Inflation Adjusted Payments (Licensed Insurers) .......................34

                 Appendix E – Per Claim Inflation Adjusted Payments (Self-Insurers) ...............................35

                 Appendix F – Major Payment Type Experience ....................................................................36

                 Appendix G – Analysis of Management Costs .....................................................................38

                 Appendix H – Level of Certainty .............................................................................................39

                 Appendix I – Past Interest and Inflation Assumptions.........................................................40




18    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Review Of Tasmania’s 2000/01
Workers Rehabilitation & Compensation Experience


Mr. J McAlpine
Chairman
Workplace Safety Board of Tasmania
PO Box 56
ROSNY PARK TAS 7001




Dear Mr. McAlpine,




RE: EXECUTIVE SUMMARY
We have pleasure in attaching our report reviewing the Tasmanian workers’ rehabilitation and compensation
experience for the 2000/1 financial year. The major emphasis of this report continues to be the projection of the level
of outstanding liabilities as at 30th June 2001 for recent accident years, so that an evaluation of total costs and trends
in costs can be made. However, additional comments and observations are included on a variety of areas where it is
anticipated that they may be useful to assist the Board in undertaking its functions as specified by Section 10 of the
Workers’ Rehabilitation and Compensation Act 1988.


Level and Trend in Claim Numbers
On the basis of past emergence patterns, we anticipate that the ultimate number of claims for the 2000/1 accident
year will be in the vicinity of 11,581. This is a 2.1% decrease over the projected ultimate number of claims for the
preceding twelve months. The past 7 years has seen claim numbers decrease from over 19,000 p.a. to the current
level. Recently the level of improvement has tapered off sharply. The projected number of claims for self-insurers in
the 2000/1 accident year is 3017, a 15% increase over the previous year. The cause is likely to be found in the move
by larger organizations to self-insurance.


Level and Trend in Claim Costs
In payment year terms the average claim cost has reduced by some 6% to $8,885 per claim in the 2000/1 year. This
is below the 3 year average (inflation adjusted) of $9,040 and only a little above the 5 year average of $8,747.
Projected undiscounted ultimate cost outcomes appear to be around the $111 million level, down from about $115
million 3 years ago and $140 million 5 years ago. The licensed insurers are down to approximately $81 million in costs
on an undiscounted basis, from approximately $90 and $100 million 3 and 5 years ago respectively. The composition
of costs continues to be a reduction in weekly benefits and medical costs relative to common law, settlements and
legal costs. The focus of recent legislative changes is supported by the results of the latest year.




                                                               Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      19
     Review Of Tasmania’s 2000/01
     Workers Rehabilitation & Compensation Experience


     Premiums and Profitability
     The attached report shows the following level of profitability anticipated for recent accident years. A summary is as
     follows:
                                                          1996/97    $m 1997/98 $m 1998/99 $m 1999/00         $m 2000/01
                                                            $m          $m         $m         $m                 $m
     Net Earned Premium                                     94.211     84.134        90.002      103.265       104.377
     Net Outgoings                                          87.190     91.829        93.733       87.353        84.927
     Profit/(Loss)                                           7.021     (7.695)       (3.731)      15.912        19.450
     % of Premium                                            7.5%      (9.1%)        (4.1%)       15.4%         18.6%


     This is on a discounted basis. Outgoing including administration/management costs and an adjustment for
     anticipated under excess payments.
     The 2000/1 result has confirmed the conclusion reached last year – workers compensation is now a very profitable
     line of business for general insurers in Tasmania. Premium rates have risen to be over 3% of wages. The level of
     competition in this area has continued to decline. The Board’s review and monitoring of premium rates has increased
     in importance in this type of environment.


     Security of Entitlements
     The collapse of some substantial insurance and trading operations in Australia has shown the current importance of
     this issue. Assets in excess of $261 million on an undiscounted basis are needed for claims incurred but not fully
     settled in Tasmania at 30th June 2001. For self-insurers this figure is in excess of $70 million.
     At a national level, new capital adequacy rules and prudential margins on a more scientific basis are about to be
     implemented. With self-insurance growing as a preferred approach for some larger companies, this is an issue worth
     monitoring and reviewing.


     Legislative Amendments
     With the new version of the Workers’ Rehabilitation and Compensation Act 1988 proclaimed in July 2001, a degree of
     reorientation of the analysis and data structures will be needed. It was anticipated that these amendments would
     reduce the cost of the workers compensation system. Most licensed insurers appear to be taking a cautious approach
     to savings from the amendments – with 7-8% being a typical response. However since most insurers also acknowledge
     that they are now making a profit in Tasmania from this line of insurance, further savings down the track should be
     feasible. Providing the industry with early information on both the savings in common law and the substitution
     effects will facilitate that being achieved. It may be worthwhile to identify those areas where insurers are uncertain
     about outcomes, and provide aggregate information as it comes to hand – these areas range from the debate as to
     whether there will be savings in legal costs to the ability to recoup weekly benefit payments on dispute claims that
     turn out to be non-compensable.
     Please do not hesitate to contact us if you would like to discuss any aspect of this report or seek elaboration of any
     topic contained in it.
     Yours sincerely,




     BRIAN BENDZULLA, B.Sc., UED
     Fellow of the Institute of Actuaries of Australia
     Director


20      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Review Of Tasmania’s 2000/01
Workers Rehabilitation & Compensation Experience


MAIN REPORT


1. Introduction and Purpose of the Report
This report has been prepared, as requested, to comment upon the operation and effectiveness of the Workers
Rehabilitation and Compensation Act 1988 in the past twelve months. A major emphasis of this report is to project
the level of outstanding liabilities as at 30th June, 2001 for recent accident years, so that an evaluation of total costs
and trends in costs can be made. However, additional information has been included on a variety of issues that may
assist the Board in carrying out its functions as detailed in Section 10 of that Act.
This report complies with Professional Standard 300 of the Institute of Actuaries of Australia, and associated Guidance
Notes. This investigation has been undertaken by Brian Bendzulla, B.Sc., UED, Fellow of the Institute of Actuaries of
Australia. A similar report was prepared last year.
The Workers’ Compensation Act of 1988 was extensively modified in 1995 and renamed the Workers Rehabilitation
and Compensation Act 1988. The benefits payable for injuries during 2000/01 included a weekly benefit compensation
payable with a step down after 6 and 25 weeks. Weekly benefits were subject to a dollar cap. All reasonable medical,
hospital and rehabilitation expenses are paid under the provisions of the Act. Unlimited access to common law
payments existed in 2000/1. With effect from July 2001 further amendments have been proclaimed. These
amendments included the removal of the dollar cap on weekly benefits – benefits can now be paid for up to 10 years.
Step-downs to 85% have been introduced after 13 weeks and to 70% after 52 weeks. A safety net provision exists for
low-income workers. Access to common law is restricted to claims where the injured worker’s level of permanent
impairment is at least 30%.


2. Data Supplied
The claims and payments files have been compared to insurers’ “Form D’s”. Adjustments have been made to the latest
payment year information to proportionally increase it to a full year. More information is shown as Appendix A.
The vast majority of claims are notified in the year of accident or the first few months after the close of the year. Very
few claims are notified more than twelve months after the close of the accident year. The claims file supplied by the
Workplace Safety Board contains both the date of accident and the date the claim was lodged. The data file shows
the following claims reported by 30th June, 2001 in “development” format.


 Accident
                                                      Reported by 30 June 2001
   Year
                   0            1              2            3             4             5             6            7+
  1991/92       19,056         842            20           10             4             2             1            3
  1992/93       18,559         816            32            4             2             1             1            2
  1993/94       18,789         859            18            2             4             1             0            2
  1994/95       18,489         778            13           14             0             2             0
  1995/96       16,168         743            17            9             5             1
  1996/97       14,058         604            14            6             6
  1997/98       12,613         593             7            6
  1998/99       11,816         566            22
  1999/00       11,221         581
  2000/01       11,050




                                                                Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT     21
     Review Of Tasmania’s 2000/01
     Workers Rehabilitation & Compensation Experience


     Appendix A shows the split of the above information into licensed and self-insurer components. An adjustment
     has been made to the 2000/1 value so that it is representative of a fully loaded position.
     The gross payment information in “development” or run off format is as follows:

                                                                  Paid in Year
      Accident
                                                                      $m
        Year
                        0            1             2            3             4       5          6           7+
       1989/90       16.564        17.794       11.590         9.205        8.035   6.420      3.641       5.361
       1990/91       17.607        22.155       14.325        10.726        9.261   5.201      2.934       7.132
       1991/92       22.531        22.834       14.570        16.877       10.953   9.404      3.952       6.290
       1992/93       22.253        27.622       22.763        16.041       11.491   5.767      3.751       4.107
       1993/94       23.791        33.258       25.392        18.367       11.477   7.212      5.315       3.403
       1994/95       25.940        36.130       28.074        20.641       14.548   7.906      6.579
       1995/96       25.234        33.030       25.694        20.403       16.501   7.960
       1996/97       20.308        26.153       21.763        15.959       11.060
       1997/98       19.974        27.682       24.776        16.877
       1998/99       21.102        30.203       22.569
       1999/00       20.572        29.025
       2000/01       18.539

     The above includes payments incurred by the employers under the compulsory excess design and before any
     reinsurance recoveries.
     The current record of payments incurred by employers for amounts under the excess is:

                                                                   Paid in Year
      Accident                                                         $m
        Year                0                     1                      2               3               4
      1995/96             1.930                 0.165                 0.038            0.054           0.017
      1996/97             2.749                 0.704                 0.179            0.054           0.010
      1997/98             2.623                 1.010                 0.082            0.035
      1998/99             2.701                 1.039                 0.109
      1999/00             2.562                 1.110
      2000/01             2.523

     Again, Appendix A shows this information split into licensed and self-insurers.




22      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Review Of Tasmania’s 2000/01
Workers Rehabilitation & Compensation Experience


3. Projection Methodology
The report uses a Payment Per Claim Incurred (PPCI) model to project ultimate costs. A full description of the method
is attached as Appendix B. A critical assumption in the model is the assumed emergence pattern.
The emergence pattern has been remarkably stable. The size of the payments in the “tail” continues to be modest.
The assumed emergence of payment distribution adopted for this analysis (and that adopted last year) is as follows.


                      Accident Year                This Analysis                  2000 Analysis
                          Plus                     % Emergence                    % Emergence
                           0                             20                             20
                           1                             26                             26
                           2                             20                             20
                           3                             14                             14
                           4                              9                             10
                           5                              5                              5
                           6                              3                              3
                          7+                              3                              2
                        Total                         100%                           100%

The economic assumptions adopted for the analysis are
Interest Rate         5.75% p.a.
Inflation             5.0% p.a. for next 3 years, followed by 4.0%.
Higher levels of super-inflation have been considered in a sensitivity analysis.


4. 2000/01 Claim and Payment Experience
Using the claim information from Section 2 and a Chain Ladder algorithm to project the ultimate number of claims,

                                                                                               Projected Ultimate
      Accident Year                Reported by 30–6–2001            IBNR Provision
                                                                                               Number of Claims
        1991/92                          19,938                           0                          19,938
        1992/93                          19,417                           0                          19,417
        1993/94                          19,673                           0                          19,673
        1994/95                          19,296                           2                          19,298
        1995/96                          16,943                           3                          16,946
        1996/97                          14,688                           4                          14,692
        1997/98                          13,219                           7                          13,226
        1998/99                          12,404                          12                          12,416
        1999/00                          11,802                          24                          11,826
        2000/01                          11,050                         531                          11,581

we have:
This is a 2.1% decrease in projected ultimate number of claims as compared to the preceding twelve months. The
past 7 years has seen claim numbers decrease from over 19,000 p.a. to the current level. The level of improvement
has tapered off sharply.
The average claim size for the payment year experience has been calculated from payment information set out in
Appendix A. The payments have been expressed per claim and adjusted for background inflation i.e. all are expressed
in 2000/01 dollar values. The results are as follows:




                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   23
     Review Of Tasmania’s 2000/01
     Workers Rehabilitation & Compensation Experience


                 Payment Year                     Average Claim Size          Levels of Super-Inflation
                   1996/97                              $8,383
                   1997/98                              $8,232                           -1.8%
                   1998/99                              $8,775                            6.6%
                   1999/00                              $9,459                            7.8%
                   2000/01                              $8,885                           -6.1%
                  5 Year Average                          $8,747
                  3 Year Average                          $9,040
     In payment year terms the average cost has reduced by some 6% to $8,885 per claim in the 2000/01 year. This is
     below the 3 year average (inflation adjusted) of $9,040 and only a little above the 5 year average of $8,747.
     The composition of costs continues to be a reduction in weekly benefits and medical costs while common law,
     settlement and legal costs are increasing in a relative sense.


     5. Projected Ultimate Aggregate Cost Outcomes
     Using the assumptions set out in the earlier sections, together with an average payment year cost of $8,900 in
     2000/01 dollars, the projected ultimate claim costs (on an undiscounted basis) will be:
                                         TOTAL PROJECTED COST — UNDISCOUNTED
                                       Payments made by           Projected
             Accident Year                 30–6–2001           Future Payments                   Ultimate Claim Costs
                                              $m                      $m                                  $m
               1994/95                          139.819                     5.410                     145.229
               1995/96                          128.823                     9.739                     138.562
               1996/97                           95.243                    15.731                     110.974
               1997/98                           89.309                    25.952                     115.261
               1998/99                           73.874                    41.746                     115.620
               1999/00                           49.597                    63.715                     113.312
               2000/01                           18.539                    93.405                     111.944


     The model benchmarks have again been strengthened a little. The model last year anticipated payments in 2000/01
     of $90.9 million for accident years 1994 to 2000. The actual outcome was $97.5 million.


     6. Licensed Insurer Experience
     The emphasis in this report has been placed on the overall Tasmanian experience since this is not influenced by any
     change between licensed and self-insurer components. After consideration of the claim reporting delays and
     payment emergence patterns, I concluded that they are sufficiently close to enable a common distribution to be
     adopted for both licensed and self-insurers. However, licensed insurers appear to have a slightly lower level of
     reported claims and a slightly lower percentage of claim costs settled in the first development year.
     The first table shows the number of claims reported by 30/06/2001 and the anticipated ultimate number of claims
     for licensed insurers:




24      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Review Of Tasmania’s 2000/01
Workers Rehabilitation & Compensation Experience


                                                                                  Projected Ultimate
                      Accident Year           Reported by 30–6–2001
                                                                                  Number of Claims
                         1991/92                       14,132                         14,132
                         1992/93                       14,172                         14,172
                         1993/94                       14,871                         14,871
                         1994/95                       15,399                         15,401
                         1995/96                       13,451                         13,454
                         1996/97                       11,636                         11,639
                         1997/98                       10,461                         10,466
                         1998/99                        9,986                          9,996
                         1999/00                        9,178                          9,196
                         2000/01                        8,171                          8,564

The payment year average claim sizes and level of super-inflation are:

               Payment                   Year Average Claim Size             $ Levels of Super-Inflation
               1996/97                             7,565
               1997/98                             7,225                                  -4.5%
               1998/99                             8,075                                  11.8%
               1999/00                             8,976                                  11.2%
               2000/01                             8,813                                  -1.8%
             5 Year Average                            8,131
             3 Year Average                            8,622
The average payment year claim size is very similar to that applying twelve months ago, but slightly lower.
The anticipated ultimate cost for each of the accident years on an undiscounted basis is:

                                   Paid by 30–6–2001             Estimated Outstanding         Projected Ultimate Cost
      Accident Year
                                          $m                              $m                             $m
         1994/95                         98.442                           4.172                         102.614
         1995/96                         90.030                           7.472                         97.502
         1996/97                         72.671                          12.042                         84.713
         1997/98                         69.295                          19.844                         89.139
         1998/99                         57.697                          32.477                         90.174
         1999/00                         37.217                          47.875                         85.092
         2000/01                         14.302                          66.744                         81.046


In terms of aggregate outcomes, the 2000/01 accident year is expected to be some 5% lower than that applying
twelve months ago.


7. Licensed Insurer Profitability
The profitability of the business of licensed insurers in a particular accident year can only be known with certainty
after the final payment is made – this may be many years later. However, with the passage of time we become
increasingly confident of the outcome. To emphasise this I have shown below the cost of claims to be two components
viz. the total of claim payments made so far, and the projected value of claim payments still to be made.
The analysis needs to allow for timing differences. This is taken into account by discounting all items at the rates set
out in Appendix I to the start of the year of accident, in order to be directly comparable to the earned premium. The
discounting has been taken to the start of the financial year because the vast bulk of premiums are renewed at the
start of the year. Commissions and expenses incurred during the year have been taken as an appropriate provision
for the year in question. In practice the expenses in any one year will be for claims from many years, however, under


                                                                Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   25
     Review Of Tasmania’s 2000/01
     Workers Rehabilitation & Compensation Experience


     reasonably stable aggregate conditions the above approximation is appropriate. Reinsurance and stop loss costs
     have been excluded since a gross cost analysis has been undertaken.
     Costs are those incurred by the insurers i.e. allowance must be made for those payments that are less than the
     excess.
                                                 TABLE OF PAST PROFITABILITY
                                                        1996–97    1997–98         1998–99        1999–00      1999–01
                                                          $m          $m             $m             $m           $m
     Net Earned Premium                                    94.211      84.134       90.002        103.265     104.377
     Minus
     Claims Payments                                       63.796      62.378       53.100         35.014       13.907
     Estimated Outstanding                                   8.375     14.630       25.024         38.461       55.984
     Less Excess Payments                                   (2.774)     (2.626)      (2.450)        (2.432)      (2.556)
     Expenses                                              17.793      17.447       18.059         16.310       17.592
     Equals
     Profit/Loss                                             7.021     (7.695)       (3.731)       15.912       19.450
     % of Premium                                            7.5%      (9.1%)        (4.1%)        15.4%        18.6%


     The outcome for the latest accident year confirms the trend last year – premiums are now at a level where the
     insurance companies can expect to make significant profits.


     8. Comments On Premiums
     Premium rates have risen to over 3% of wages. The level of competition has continued to decline. The Board’s review
     and monitoring of premium rates has increased in importance to try and ensure appropriate premiums are offered.
     It was anticipated that the legislative amendments would reduce the cost of the workers compensation system. Most
     licensed insurers appear to be taking a cautious approach to savings from amendments – with 7-8% being the typical
     expectation in savings for the next twelve months over that applying in 2000/1. Providing industry with information
     about savings being achieved in common law and the substitution effects will facilitate additional savings being
     achieved. It may be worthwhile to identify those areas where insurers are uncertain about outcomes – these range
     from debate as to whether there will be savings in legal costs to the ability to recoup weekly benefit payments on
     dispute claims that turn out to be non-compensable.


     9. Self-Insurer Experience
     The first table shows the number of claims reported by 30th June, 2001 and the anticipated ultimate number of claims.
                                                                                   Projected Ultimate
                           Accident Year            Reported by 30–6–2001
                                                                                   Number of Claims
                             1991/92                         5,806                        5,806
                             1992/93                         5,247                        5,247
                             1993/94                         4,801                        4,801
                             1994/95                         3,897                        3,897
                             1995/96                         3,492                        3,493
                             1996/97                         3,052                        3,053
                             1997/98                         2,758                        2,759
                             1998/99                         2,418                        2,420
                             1999/00                         2,624                        2,629
                             2000/01                         2,879                        3,017




26      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Review Of Tasmania’s 2000/01
Workers Rehabilitation & Compensation Experience


Appendix E shows self-insurer inflation adjusted and per claim information.
The payment year average claim size and level of super-inflation is:

                Payment                   Year Average Claim Size           $ Levels of Super-Inflation
                1996/97                            11,228
                1997/98                            11,720                                     4.3%
                1998/99                            11,344                                    -3.2%
                1999/00                            11,188                                    -1.4%
                2000/01                             9,189                                   -17.9%
             5 Year Average                          10,934
             3 Year Average                          10,574
                                   Paid by 30–6–2001            Estimated Outstanding
      Accident Year                                                                            Projected Ultimate Cost
                                          $m                             $m
         1994/95                          41.377                          1.301                          42.678
         1995/96                          38.793                          2.391                          41.184
         1996/97                          22.572                          3.893                          26.465
         1997/98                          20.014                          6.448                          26.462
         1998/99                          16.177                          9.691                          25.868
         1999/00                          12.380                         16.870                          29.250
         2000/01                           4.236                         28.982                          33.218

The anticipated ultimate cost for each of the accident years on an undiscounted basis is:
The changes in the number of claims and average claim size are partially due to compositional changes to the
number of self-insurers.


10.Security of Entitlements
The collapse of some substantial insurance and trading operations in Australia have shown the current importance of
this issue. Assets in excess of $261 million on an undiscounted basis are needed for claims incurred but not fully settled
in Tasmania at 30th June 2001. For self-insurers this figure is in excess of $70 million.
At a national level, new capital adequacy rules and prudential margins on a more scientific basis are about to be
implemented. With self-insurance growing as a preferred approach for some larger companies, this is an area worth
monitoring and reviewing.


11.Level of Certainty
In the report, a separation of actual and projected values has been provided so that the reader can evaluate how
much is based on observed data. A more detailed commentary of the issues is attached as Appendix H. Models can
have selection, specification, estimation and stochastic errors. Consequently, it is important to monitor how accurate
the model has been and how the results may vary.
The total payments in any one financial year are an amalgamation of a whole series of components from the various
accident years. Each time the outstanding liability provision is updated, it takes into account the extra information
known about each accident year. In time, all claim payments for an individual accident year will be written down to
zero. It is a worthwhile exercise to monitor the model expectation and that which actually occurred. The size and
direction of adjustments will show whether the model tends to under or over estimate the outstanding claim cost
liability.




                                                               Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      27
     Review Of Tasmania’s 2000/01
     Workers Rehabilitation & Compensation Experience


     The model adopted last year anticipated payments in the 2000/01 payment year of $90.9 million for accident years
     1994 to 2000. By 30th June, 2001 a total of $97.5 million in payments had occurred. This indicates that experience
     has been less favourable than the model benchmarks, and that some strengthening of these benchmarks should be
     made. This has been done in this year’s analysis.


     12 Sensitivity Analysis
     A sensitivity analysis has been carried out to test how liability outcomes will vary if the major assumptions vary. The
     three scenarios tested are:
     Scenario A: An optimistic outcome.
                    Average payment year claim costs are assumed to be those prevailing over the past three years i.e.
                    $8,750 in 2000/01 values. Future payment inflation is assumed to be 4% p.a. i.e. no super inflationary
                    deterioration.
     Scenario B: Best estimate.
                    This allows for an average payment year claim cost of $8,900. Claim cost inflation is assumed to be 4%
                    p.a. with an extra 1% for the next three years.
     Scenario C: Less optimistic outcome.
                    The average payment year claim cost is assumed to be $9,500 i.e. the worst rate prevailing in the past
                    5 years. Claim cost inflation is assumed to be 7% p.a. for the next 3 years, then reducing to 6% p.a.
     The results are:


                                            Scenario A                    Scenario B                   Scenario C
           Accident Year
                                               $m                            $m                           $m
             1996/97                            110.4                       111.0                        112.6
             1997/98                            114.4                       115.3                        118.1
             1998/99                            114.2                       115.6                        120.4
             1999/00                            111.0                       113.3                        120.9
             2000/01                            108.5                       111.9                        123.6


     As would be expected, the greatest uncertainty exists with the latest accident year. The actual outcome could vary
     $10 million - $15 million from the trend value indicated in Scenario B.
     The model anticipates payments in 2001/02 of $94.6 million for accident years 1994 to 2001. This can be used to
     revisit the actual outcome in 12 months time to provide an indication as to whether the model’s assumptions are set
     too optimistically or conservatively.




28      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix A – Overall Payment and Claims Data



I have been supplied by the Workplace Safety Board with full copies of the database accident claims and payments
files. In addition, for data reconciliation purposes I have been provided with the aggregate result of the insurers’ Form
Ds. All of this information is in respect of claims under the Workers’ Rehabilitation and Compensation Act 1988 only,
i.e. all claims from injuries on or after 15/11/1988.
As a data check, the following table shows the records I have extracted from the database versus the information on
payments supplied directly by insurers and self-insurers in the Form Ds.
                                      Analysis Data                  Form D Data
      Payment Year                                                                               Percentage Match
                                           $m                            $m
         2000/01*                       121.445                        121.471                         100.0%
         1999/00                        128.494                        129.363                          99.3%
         1998/99                        122.609                        122.016                         100.5%
         1997/98                        118.598                        118.559                         100.0%
         1996/97                        126.006                        124.494                         101.2%
         1995/96                        124.644                        123.835                         100.7%
         1994/95                        116.152                        116.946                          99.3%
         1993/94                         87.972                         88.181                          99.8%
         1992/93                         72.697                         73.511                          98.9%
         1991/92                         60.829                         61.270                          99.3%


* After considering the Form D information, the aggregate payments for the 2000/01 payment year have been
increased by 14.8% since the data is only loaded to the end of May 2001. The licensed insurers have been increased
by 11.6% and the self-insurers by 26.2%. The Form D values have been modified for one major self-insurer omitted.
In subsequent years it would be desirable to work on a file fully loaded for the financial year. However, the missing
component is only a very small percentage of the overall data available.
Corresponding comparisons for licensed and self-insurers are presented in the next two tables.


                                      Analysis Data                  Form D Data
      Payment Year                                                                               Percentage Match
                                           $m                            $m
         2000/01*                         92.265                        92.235                         100.0%
         1999/20                          96.135                        96.107                         100.0%
         1998/99                          88.775                        88.481                         100.3%
         1997/98                          80.427                        80.389                         100.0%
         1996/97                          87.092                        85.319                         102.1%
         1995/96                          83.893                        83.766                         100.2%
         1994/95                          76.137                        76.863                          99.1%
         1993/94                          55.196                        55.479                          99.5%
         1992/93                          46.100                        46.893                          98.3%
         1991/92                          36.844                        37.156                          99.2%
         1990/91                          27.278                        29.004                          94.0%

Licensed Insurers – Payments File Versus Form D Information




                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      29
     Appendix A – Overall Payment and Claims Data



     Self Insurers – Payments File Versus Form D Information
                                          Analysis Data                  Form D Data
          Payment Year                                                                             Percentage Match
                                               $m                            $m
             2000/01                          29.226                        29.236                      100.0%
             1999/00                          32.358                        33.256                       97.3%
             1998/99                          33.835                        33.535                      100.9%
             1997/98                          38.049                        38.159                       99.7%
             1996/97                          37.960                        39.174                       96.9%
             1995/96                          38.600                        38.641                       99.9%
             1994/95                          39.763                        40.585                       98.0%
             1993/94                          32.703                        32.702                      100.0%
             1992/93                          26.526                        26.380                      100.6%
             1991/92                          23.976                        24.104                       99.5%
             1990/91                          13.781                        16.998                       81.1%

     Licensed Insurers – Payments in Development Table Format
      Accident                                                    Paid in Year
        Year                                                          $m
                       0            1             2             3             4           5           6           7+
      1990/91     11,191,469    12,496,664    8,303,687     5,323,830     4,691,386   2,975,228   1,373,679   4,111,082
      1991/92     14,012,693    14,204,918    8,780,207    11,217,796     6,777,111   6,157,330   2,567,782   3,977,820
      1992/93     14,320,508    16,974,408   14,559,340     9,811,121     7,264,428   2,452,872   2,110,124   2,572,718
      1993/94     16,169,302    21,774,585   16,885,001    12,357,258     6,861,121   4,518,058   2,367,349   2,005,665
      1994/95     18,605,477    25,084,188   19,380,808    14,428,599 11,148,736      5,364,770   4,429,705
      1995/96     18,302,302    23,082,103   17,218,537    13,297,801 12,281,890      5,847,297
      1996/97     15,821,027    19,457,152   16,330,957    12,250,670     8,811,659
      1997/98     14,829,988    21,230,380   19,468,397    13,766,161
      1998/99     15,817,214    23,654,661   18,224,871
      1999/00     15,233,743    21,982,876
      2000/01     14,302,397


     Self Insurers – Payments in Development Table Format
      Accident                                                    Paid in Year
        Year                                                          $m
                       0         1                2             3             4           5           6           7+
      1990/91      6,415,614  9,658,168       6,021,403     5,402,078     4,569,448   2,225,512   1,560,049   3,020,956
      1991/92      8,518,552  8,628,786       5,789,433     5,659,254     4,175,822   3,246,680   1,384,242   2,312,125
      1992/93      7,932,171 10,647,110       8,203,298     6,230,204     4,226,652   3,313,677   1,641,344   1,533,846
      1993/94      7,621,935 11,483,759       8,507,310     6,009,353     4,616,315   2,694,146   2,947,877   1,397,139
      1994/95      7,334,749 11,046,198       8,692,722     6,212,663     3,399,543   2,541,414   2,149,454
      1995/96      6,932,037  9,948,130       8,475,646     7,104,844     4,219,337   2,113,108
      1996/97      4,487,385  6,695,609       5,431,972     3,708,536     2,248,081
      1997/98      5,144,132  6,451,954       5,307,581     3,110,704
      1998/99      5,284,485  6,548,060       4,344,530
      1999/00      5,338,124  7,042,148
      2000/01      4,236,149


     The above information includes under excess workers’ compensation payments. The next two tables show the
     number of claims reported by 30th June, 2001 for licensed and self-insurers respectively.




30     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix A – Overall Payment and Claims Data



Licensed Insurers – Reported Claims by 30/06/2001
 Accident                                            Development Year
   Year                                                     $m
                  0           1            2          3           4              5             6            7+
  1990/91      14,170        259          15           3          0              1             0             1
  1991/92      13,580        534          10           3          3              0             0             2
  1992/93      13,573        570          22           2          2              1             1             0
  1993/94      14,206        655           9           0          1              1             0             0
  1994/95      14,799        587           6          7           0              1             0
  1995/96      12,922        515           7          4           2              1
  1996/97      11,178        444          10          1           3
  1997/98      10,010        443           5          3
  1998/99       9,566        404          16
  1999/00       8,755        423
  2000/01       8,171


Self Insurers – Reported Claims by 30/06/2001
 Accident                                             Reported in Year
   Year                                                     $m
                  0           1           2            3           4             5            6            7+
  1990/91      6,049        220           8           1            1            2             2            1
  1991/92      5,476        308          10           7            1            2             1            1
  1992/93      4,986        246          10           2            0            0             0            2
  1993/94      4,583        204           9           2            3            0             0            0
  1994/95      3,690        191           7           7            0            2             0
  1995/96      3,246        228          10           5            3            0
  1996/97      2,881        160           4           4            3
  1997/98      2,603        150           2           3
  1998/99      2,250        162           6
  1999/00      2,466        158
  2000/01      2,879


The development pattern is reasonably consistent between the two groups – with self-insurers having relatively
slightly more claims reported after the end of the accident year. The emergence pattern is largely determined by
administrative and data capture procedures. Consistency of approach adopted for identifying a claim – not the
approach adopted in itself – is the important factor for the model.




                                                         Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   31
     Appendix B – Projection Model and Methodology



     A Payment Per Claim Incurred method has been adopted for this report to quantify outstanding liabilities. The
     valuation basis is specified by:
     •	the	number	of	claims	incurred	in	each	accident	year;
     •	the	average	cost	per	claim	in	the	values	of	the	latest	payment	year;
     •	the	proportion	of	claim	payments	expected	to	be	made	in	each	accident	year;
     •	the	rates	of	future	inflation;	and
     •	the	interest	rates	used	for	discounting.
     This method relies on average claim payment patterns per incurred claim to estimate future payments on the basis
     of the past experience of the arrangement. The approach is refined by making adjustments for inflation, changes in
     the exposure to risk, trends evident etcetera.
     Diagrammatically, the model is:



      Observed Number
                                                                        Observed Payments
      of Claims




      Estimated Number                   Total Number                    Observed Payment
      of IBNR Claims                     of Claims                       Pattern




                                                                                                        Estimated Ultimate
                                               Estimated Outstanding Claims Reserve
                                                                                                        Cost of Claims




     Estimates of the number of IBNR claims have been made by use of a “Chain Ladder Method”. The key assumption is
     that, apart from random errors with mean zero, the relative emergence pattern of IBNR claims is the same in all the
     accident periods. The ratios and parameters are estimated by a Chain Ladder Algorithm. If the pattern of lodging
     claims in the past is not representative of the pattern in the future because of external influences, the method breaks
     down.
     The observed payment pattern has also assumed a stable emergence pattern i.e. the payment in a specific
     development period per claim as a proportion of the total average claim amounts, is not dependent on the period of
     accident, apart from random fluctuations. The payment pattern is estimated on a per claim basis since this has a
     number of advantages. The random fluctuations in the average claim are considerably less than in the payments. The
     uncertainty linked to the number of claims is eliminated. It allows the “super-inflationary” component to be directly
     observed. The run off distribution has been chosen after estimation of its shape using a non-linear regression analysis
     to fit the parameters.



32      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix C – Per Claim Inflation Adjusted Payments (Total)



The table in this appendix shows the average claim payments for each accident year and development period. A
number of calculation steps are involved to make the values directly comparable. The first is to take the payment data
and eliminate background inflation. Inflation adjusted payments have been calculated by inflating each of the data
cells by an appropriate AWE index. Further information on this aspect is contained in Appendix I. Once this is
completed, the values are divided by the projected ultimate number of claims for the relevant accident year to yield
a per claim incurred value.
The inflation adjusted values are:

 Accident                                               Development Year
   Year                                                        $m
                   0            1             2           3          4              5            6             7+
  1989/90       25.728       25.699        16.067      12.585     10.670          8.188        4.425         6.273
  1990/91       25.428       30.714        19.585      14.244     11.810          6.320        3.433         8.044
  1991/92       31.235       31.218        19.349      21.523     13.310         11.003        4.458         6.808
  1992/93       30.423       36.682        29.029      19.494     13.445         6.504         4.061         4.317
  1993/94       31.596       42.413        30.857      21.489     12.946         7.807         5.588         3.403
  1994/95       33.081       43.906        32.847      23.282     15.747         8.312         6.579
  1995/96       30.665       38.646        28.981      22.084     17.349         7.960
  1996/97       23.761       29.498        23.557      16.779     11.060
  1997/98       22.529       29.964        26.049      16.877
  1998/99       22.841       31.754        22.567
  1999/00       21.628       29.025
  2000/01       18.539


While the per claim values are:

 Accident                                               Development Year
   Year                                                        $m
                   0            1             2           3          4              5            6             7+
  1989/90        1152         1151           720         564       478             367          198           281
  1990/91        1226         1481           945         687       570             305          166           388
  1991/92        1567         1566           970        1079       668             552          224           341
  1992/93        1567         1889          1495        1004       692             335          209           222
  1993/94        1606         2156          1568        1092       658             397          284           173
  1994/95        1714         2275          1702        1206       816             431          341
  1995/96        1810         2281          1710        1303      1044             470
  1996/97        1617         2008          1603        1142       753
  1997/98        1703         2266          1969        1276
  1998/99        1840         2558          1818
  1999/00        1829         2454
  2000/01        1601




                                                            Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT     33
     Appendix D – Per Claim Inflation Adjusted Payments
                 (Licensed Insurers)


     For licensed insurers the inflation adjusted payments ($m) per accident and development period are
     as follows:
      Accident                                                Development Year
        Year                                                         $m
                       0            1              2            3          4       5       6       7+
      1989/90       15.808       16.802          9.692        8.404      7.783   5.252   2.643   4.925
      1990/91       16.163       17.324         11.353        7.070      5.983   3.616   1.607   4.637
      1991/92       19.426       19.421         11.660       14.306      8.236   7.204   2.896   4.306
      1992/93       10.579       22.543         18.567       11.923      8.500   2.767   2.284   2.705
      1993/94       21.473       27.768         20.519       14.458      7.739   4.890   2.489   2.006
      1994/95       23.727       30.482         22.676       16.274     12.068   5.640   4.430
      1995/96       22.241       27.007         19.421       14.394     12.913   5.847
      1996/97       18.511       21.946         17.617       12.880      8.812
      1997/98       16.727       22.980         20.468       13.766
      1998/99       17.121       24.870         18.225
      1999/00       16.016       21.983
      2000/01       14.302


     The payment per claim information is:
      Accident                                                Development Year
        Year                                                         $m
                       0            1              2            3          4      5       6       7+
      1989/90         968         1029            593          515       476     322     162     302
      1990/91        1119         1199            786          489       414     250     111     321
      1991/92        1375         1374            825         1012       583     510     205     305
      1992/93        1382         1591           1310          841       600     195     161     191
      1993/94        1444         1867           1380          972       520     329     167     135
      1994/95        1541         1979           1472         1057       784     366     288
      1995/96        1653         2007           1444         1070       960     435
      1996/97        1590         1886           1519         1107       757
      1997/98        1598         2196           1956         1315
      1998/99        1713         2488           1823
      1999/00        1742         2390
      2000/01        1670




34     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix E – Per Claim Inflation Adjusted Payments
            (Self-Insurers)


The inflation adjusted payments ($m) per accident and development period are as follows:
 Accident                                    Development Year
   Year                                             $m
                0         1           2        3          4              5            6             7+
 1989/90      9.920     8.896       6.376    4.181     2.888           2.936        1.782         1.347
 1990/91      9.265    13.389       8.232    7.174     5.827           2.704        1.825         3.407
 1991/92     11.809    11.797       7.689    7.217     5.074           3.799        1.561         2.503
 1992/93     10.845    14.140      10.461    7.571     4.945           3.738        1.777         1.613
 1993/94     10.122    14.645      10.338    7.031     5.207           2.916        3.099         1.397
 1994/95     9.354     13.423      10.171    7.007     3.680           2.672        2.149
 1995/96     8.424     11.640       9.560    7.690     4.436           2.113
 1996/97     5.250      7.552       5.880    3.899     2.248
 1997/98     5.802     6.984       5.580     3.111
 1998/99     5.720     6.884       4.345
 1999/00     5.612     7.042
 2000/01     4.236


The payment per claim information is:
 Accident                                    Development Year
   Year                                             $m
                0         1          2         3          4             5             6             7+
 1989/90      1581      1418       1016       666       460            468           284           215
 1990/91      1474      2131       1310      1142       927            430           290           542
 1991/92      2034      2032       1324      1243       874            654           269           431
 1992/93      2067      2695       1994      1443       942            712           339           307
 1993/94      2108      3050       2153      1465      1085            607           646           291
 1994/95      2400      3445       2610      1798       944            686           552
 1995/96      2412      3332       2737      2202      1270            605
 1996/97      1720      2474       1926      1277       736
 1997/98      2103      2531       2023      1127
 1998/99      2364      2845       1795
 1999/00      2135      2679
 2000/01      1404




                                                 Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   35
     Appendix F – Major Payment Type Experience



     Weekly Benefit Costs
      Accident                                                 Paid in Year
        Year                                                       $m
                       0            1              2         3             4            5          6          7+
      1989/90     10,998,423   10,858,817      6,958,486 3,220,773 2,410,184        1,470,213   929,424     367,176
      1990/91     11,245,031   13,582,288      6,868,774 4,566,319 2,027,409        1,169,350   427,239     223,501
      1991/92     13,899,631   12,741,243      7,918,715 6,571,598 3,220,300         913,267    252,908     272,410
      1992/93     12,765,250   17,101,118     11,183,092 5,612,113 1,886,291         596,367    304,769     196,622
      1993/94     14,738,058   18,749,937     11,992,487 5,431,531 2,087,133         655,865    123,351     202,407
      1994/95     14,815,758   20,610,282     10,099,934 5,359,706 1,712,933         538,718    150,006
      1995/96     13,376,718   14,679,193      8,750,757 4,624,098 2,508,013        1,059,417
      1996/97      9,402,471   11,400,247      6,055,663 3,463,708 1,722,435
      1997/98     8,676,922    10,555,171     6,125,561 2,914,019
      1998/99     8,442,021    10,656,670     5,336,654
      1999/00     8,108,595    9,966,662
      2000/01     7,341,663


     Medical Benefit Costs
      Accident                                                   Paid in Year
        Year                                                         $m
                       0            1             2            3             4         5           6          7+
      1989/90      4,667,762    4,173,160     1,672,012     890,518       574,653   488,685     260,983     225,182
      1990/91      5,334,852    4,688,005     2,046,587    1,271,401      571,809   360,899     302,936     477,184
      1991/92      7,176,102    5,230,281     1,880,595    1,367,182      768,490   540,834     310,190     377,412
      1992/93      7,731,649    5,738,302     2,493,937    1,167,439      845,609   552,122     379,838     202,526
      1993/94      7,159,047    6,864,072     3,219,728    1,923,299 1,063,505      638,732     263,680     556,798
      1994/95      8,790,916    8,437,255     3,469,279    1,867,195 1,063,758      705,496     360,979
      1995/96      9,087,282    8,628,178     3,927,913    2,255,591 1,255,044      597,782
      1996/97      8,291,394    7,067,311     2,991,438    1,455,266      771,586
      1997/98      8,282,490    7,502,941     2,954,409    1,511,388
      1998/99      8,944,446    8,308,045     3,173,767
      1999/00      8,590,703    8,061,439
      2000/01      7,371,109


     Common Law, Legal & Settlement Costs
      Accident                                                    Paid in Year
        Year                                                          $m
                       0            1              2            3             4         5           6           7+
      1989/90       354,506     1,665,509      2,271,516    3,960,276 3,980,418     4,226,724   2,281,479   3,583,126
      1990/91       481,762     2,663,461      4,154,810    4,114,749 6,231,078     3,324,253   2,213,987   5,855,821
      1991/92       719,468     3,778,917      3,797,156    7,662,825 6,100,155     7,226,170   3,177,812   4,258,676
      1992/93       955,507     3,433,680      7,993,931    8,485,260 8,116,790     4,074,429   2,882,658   2,226,283
      1993/94      1,229,870    6,461,614      9,118,140    9,816,204 7,938,417     5,695,485   4,772,421   6,117,015
      1994/95      1,446,142    5,692,840     12,777,973   12,336,324 10,656,462    6,129,893   5,596,975
      1995/96      1,887,706    8,322,601     11,878,638   12,123,951 12,300,721    5,080,093
      1996/97      1,694,835    6,345,838     11,691,131   10,336,969 7,297,257
      1997/98      2,036,220    8,027,637     14,636,578   9,644,620
      1998/99      2,524,760    9,903,313     10,458,953
      1999/00      2,952,825    7,633,896
      2000/01      2,285,166




36     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix F – Major Payment Type Experience



Fatal Costs
 Accident                                           Paid in Year
   Year                                                 $m
                  0         1         2           3             4           5             6            7+
 1989/90      268,952   314,426     189        -7,088           0          0             0              0
 1990/91      162,172   259,374   110,860         0          10,000        0          -102,989          0
 1991/92       95,288    98,211    54,690      -4,200           0        91,149           0          40,000
 1992/93      192,611   205,371   139,493         0             0          0             0              0
 1993/94      263,824   214,468   102,500       5,735           0          0             0              0
 1994/95      247,427    76,441   110,828         0             0          0             0
 1995/96      363,608   105,478    96,955      64,245           0          0
 1996/97      239,880   234,549      0         12,857           0
 1997/98      277,188   122,022   137,133       1,499
 1998/99      255,242   125,584    4,387
 1999/00       13,418    90,685
 2000/01      333,385


Lump Sum Costs
 Accident                                           Paid in Year
   Year                                                 $m
                  0        1          2           3             4           5             6            7+
 1989/90       52,780   439,912    459,526     904,111       238,567    163,150       119,664       185,036
 1990/91       98,271   492,141    792,154     481,987       297,637    283,116        42,960       20,795
 1991/92      179,601   410,479    581,113    1,125,018      756,872    520,843       166,756       99,572
 1992/93      172,035   584,961    627,035     545,958       495,278    435,564       105,209           0
 1993/94       77,036   471,194    628,621     955,896       260,132    128,166        71,979        2,560
 1994/95      232,445   667,987   1,063,355    791,583       850,205    177,933       89,096
 1995/96       82,918   495,435    490,464     873,643       157,042     50,143
 1996/97      150,864   397,593    529,883     340,975       168,897
 1997/98      108,742   570,586    357,557     50,321
 1998/99      129,786   169,513    160,461
 1999/00      38,947    189,449
 2000/01      44,631


Miscellaneous Costs
 Accident                                          Paid in Year
   Year                                                $m
                 0         1         2           3             4            5             6            7+
 1989/90      220,601   342,475   224,007     236,336       831,001      71,741        49,640        37,289
 1990/91      284,907   469,558   351,873     291,475       122,924      63,130        49,596        59,201
 1991/92      461,259   574,655   337,477     154,685       107,158     111,733        44,331        76,539
 1992/93      435,537   557,906   325,195     209,594       147,020      95,636        74,282        37,076
 1993/94      323,084   497,031   330,897     233,739       118,027      93,940        83,795        51,210
 1994/95      407,588   638,768   488,919     275,421       258,682     138,188        58,352
 1995/96      436,434   798,742   548,472     400,970       241,821      74,092
 1996/97      528,201   706,338   476,884     305,619       102,859
 1997/98      591,558   874,158   458,407     190,933
 1998/99      715,715   946,225   317,826
 1999/00      595,526   576,286
 2000/01      435,652




                                                    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   37
     Appendix G – Analysis of Management Costs



     Only a superficial analysis can be made of management costs. The reasons for this are:
     Insurers will have to make an apportionment of costs between workers compensation and other lines of business.
     Consequently, the value submitted is subjective.
     •	Commissions	and	expenses	incurred	during	the	year	have	been	taken	as	an	appropriate	provision	for	the	accident	
       year in question. In practice the expenses in any one year will be for claims from many years, however, under
       reasonably stable aggregate conditions the above approximate is reasonable.
     •	Self	insurers	often	use	internal	resources.		It	is	doubtful	that	they	include	all	these	costs,	or	that	a	consistent	
       approach is adopted.
     •	The	licensed	insurer	management	costs	as	a	percentage	of	premium,	and	as	a	dollar	amount	per	claim	are	as	
       follows:

         Accident           Management            Premium              % of        Projected Number   Inflation Adj
           Year              Costs $m                $m              Premium           of Claims    Dollars per Claim
         1990/91                7.216              35.283             20.5%             14,449                $499
         1991/92                9.401              37.693             24.9%             14,132                $665
         1992/93                9.218              45.588             20.2%             14,172                $650
         1993/94                9.313              53.888             17.3%             14,871                $626
         1994/95               12.286              75.397             16.3%             15,401                  798
         1995/96               15.223              89.649             17.0%             13,454               $1,131
         1996/97               17.793              94.211             18.9%             11,639               $1,529
         1997/98               17.447              84.134             20.7%             10,466               $1,667
         1998/99               18.059              90.002             20.1%              9,996               $1,806
         1999/00               16.310             103.265             15.8%              9,196               $1,774
         2000/01               17.592             104.377             16.9%              8,564               $2,054

     Management costs have been taken from the Form D’s (excluding reinsurance and stop loss costs). Costs have been
     reasonably stable in dollar terms over the past twelve months but have risen when expressed as a per claim basis.
     The corresponding values for the self-insurers are:


                                        Management Costs             Number of Claims
           Accident Year                                                                           Dollars per Claim
                                              $m                           $m
             1991/92                           2.932                       5,806                          505
             1992/93                           2.986                       5,247                          569
             1993/94                           2.846                       4,801                          593
             1994/95                           2.703                       3,897                          693
             1995/96                           3.729                       3,493                        1,068
             1996/97                           4.258                       3,053                        1,396
             1997/98                           4.008                       2,759                        1,453
             1998/99                           3.173                       2,420                        1,311
             1999/00                           2.866                       2,629                        1,090
             2000/01                           3.405                       3,017                        1,129




38      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix H – Level of Certainty



This report provides a number of items that allow the reader to evaluate the level of certainty that can be attached
to any projections. All projections are on a best estimate basis. Firstly, the information has been presented in
sufficient detail to allow the informed reader of the report to form their own view about the projection assumptions.
The results have been presented in a manner that shows:
•	the	information	separately	by	accident	year;
•	in	aggregate	and	split	by	self	and	licensed	insurer;
•	the	rate	of	discount	allowed	for	in	the	calculation	of	present	values;
•	the	results	on	an	undiscounted	basis;	and
•	the	level	of	superimposed	inflation	assumed.
Secondly, a sensitivity analysis has been included that shows how the outcomes would vary if different levels of
super-inflationary increases were adopted. This is the most judgmental and volatile assumption.
The exact cost of claims incurred in an accident year may not be known for many years. This analysis uses the
available information, particularly the past behaviour of similar claims to estimate outstanding liabilities in order to
complete the picture. While some of the uncertainty can be removed by refining the data and projection methodology,
a residual uncertainty will always remain.
There are a number of components to the uncertainty of workers’ compensation model projections, including:
•	the	model(s)	chosen	for	the	analysis	and	the	projection	will	never	exactly	match	the	actual	claim	process;
•	past	claim	fluctuations	will	result	in	uncertainty	in	estimating	the	parameters	of	the	model,	even	if	a	perfect	model	
  could be found;
•	undetected	errors	in	the	data	may	result	in	errors	in	estimating	the	parameters	of	the	model;
•	future	economic	and	environment	conditions	are	not	known	and	may	be	different	from	those	assumed;
•	pure	chance	fluctuation.

In statistical terms, these errors are known as:
       Selection errors       –    arise out of the choice of variables upon which to base the model.
       Specification errors   –    arise when the underlying conditions change and disturb the relationships
                                   that applied in the past.
       Estimation errors      –    past observation incorporates random variation, which is reflected in the estimate
                                   of the model parameters.
       Stochastic errors      –    the residual variability – the inherent variability of outcomes.




                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT     39
     Appendix I – Past Interest and Inflation Assumptions



     Interest Assumptions
     The assumed past investment earnings used in the discounting of claim payments to the beginning of each accident
     year has been taken as the average of 2 or 3 year Treasury Bonds as published in Table F2 of the Reserve Bank of
     Australia’s Bulletin.

           Financial Year           Yield at Beginning of Year      Yield at End of Year          Average Yield
            1989/90                            14.45%                     14.05%                      14.25%
            1990/91                            14.05%                     10.55%                      12.30%
            1991/92                            10.55%                      6.35%                       8.45%
            1992/93                             6.35%                      5.45%                       5.90%
            1993/94                             5.45%                      8.05%                       6.75%
            1994/95                             8.05%                      8.20%                       8.13%
            1995/96                             8.20%                      8.33%                       8.27%
            1996/97                             8.33%                      5.93%                       7.13%
            1997/98                             5.93%                      5.25%                       5.59%
            1998/99                             5.25%                      5.63%                       5.44%
            1999/00                             5.63%                      5.97%                       5.80%
            2000/01                             5.97%                      5.55%                       5.76%
        Future Years                             -                         5.75%                        -

     Inflation Assumptions
     Inflation adjustments have been made based on the November Average Weekly Ordinary Time Earnings for full time
     persons – Australia – as published by the Australian Bureau of Statistics – Catalogue No. 6302.0. These have been:
                                            November 1988          $484.90
                                            November 1989          $516.60
                                            November 1990          $555.60
                                            November 1991          $578.80
                                            November 1992          $586.90
                                            November 1993          $604.20
                                            November 1994          $629.80
                                            November 1995          $662.30
                                            November 1996          $685.80
                                            November 1997          $711.40
                                            November 1998          $741.30
                                            November 1999          $763.20
                                            November 2000          $802.40
     The November value has been chosen since it is approximately halfway through the year in question.




40      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   41
Statistics
     Workers Compensation Statistics
     12 Months Ending June 2001


     Key Points
     Comparison of outcomes between the 12 months ending June 2001 and the previous 12 months ending June
     2000:
     •	11,323	claims	lodged—a	4.3%	decrease.
     •	Ten	fatalities	reported—2.5	times	the	number	in	previous	year.
     •	All	claims	frequency	rate	(ACFR)	of	42.3—a	5.2%	decrease.
     •	Lost	time	injury	frequency	rate	(LTIFR)	of	14.8—a	1.8%	increase.
     •	Average	lost	time	per	claim	of	14.3	working	days	(1.4	working	days	per	month	or	less	than	one-third	of	a	working	
       day per week—a decrease of 16.2%.
     •	$122.809m	paid	out	in	workers’	compensation—a	decrease	of	4.4%.
     •	Common	law	and	negotiated	settlements	decreased	by	3.1%.
     •	Weekly	benefits	decreased	by	9.8%.
     •	Average	weekly	benefits	per	claim	of	$4,641—decreased	by	4.5%.
     •	Total	medical	costs	decreased	by	8.6%.
     •	Actual	average	premium	rate	of	3.04%—remained	stable.
     •	Two	largest	insurers	had	a	combined	market	share	of	46.7%	of	the	total	earned	premium	pool—remained	steady.
     •	Among	the	top	50	industries	based	on	the	number	of	employers	in	those	industries,	the	logging	industry	continued	
       to have the highest premium rate (15.14%)—an increase of 17.2%.




44      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workers Compensation Statistics
12 Months Ending June 2001


Executive Summary


Claims lodged

Overall
•	11,323	claims	were	lodged	during	the	12	months	ending	June	2001.	
•	This	is	a	4.3%	decrease	from	the	number	of	claims	lodged	during	the	12	months	ending	June	2000	(11,688).
•	Ten	fatalities	were	reported	in	the	12	months	ending	June	2001.		This	is	2.5	times	the	number	reported	during	the	
  same period in 1999 (4 fatalities).
•	The	number	of	lost	time	claims	(claims	with	lost	time	of	one	day	or	more)	increased	by	2.8%	during	the	12-month	
  period ending June 2001.
•	Minor	injuries,	as	represented	by	no	lost	time	claims,	declined	by	7.8%	from	7,980	for	the	period	ending	June	2000	
  to 7,358 for the same period in 2001.

Industry Sectors
•	Health/Education/State	Government	recorded	the	highest	number	of	claims	lodged	in	the	12	months	ending	June	
  2001. This sector, however, experienced a reduction in claim number in 2001 (by 5.7%) compared to the number
  lodged in 2000.
•	Construction/Local	Government	experienced	the	highest	reduction	in	claim	numbers	(by	14.4%),	followed	by	
  Forestry/Logging/Paper/Printing (by 8.4%).
•	Clothing/Footwear/Textiles/Miscellaneous,	 Freight/Transport/Ports,	 and	 Mines/Quarries/Energy	 experienced	
  increases in claim numbers, by 10.5%, 7.9%, and 2.1%, respectively.
•	Average	ACFR	for	All	Industries	was	42.3	claims	per	million	hours	worked,	representing	a	decrease	of	5.2%	compared	
  to ACFR of 44.6 in 2000.
•	Decreases	in	ACFR	were	observed	among	six	of	the	ten	sectors,	with	notable	reductions	in	ACFR	evident	in	Retail	
  (by 16.1%), Construction/Local Gov (by 12.6%), and Health/Education/State Gov (by 10.8%). ACFR increased
  substantially for Freight/Transport/Ports (by 15.1%) and Entertainment/Hospitality (by 13.0%).
•	Average	LTIFR	increased	marginally	(by	1.8%)	between	the	12	months	ending	June	2000	and	June	2001,	from	14.5	
  lost time injuries per million hours worked to 14.8.
•	Improvements	in	LTIFR	occurred	in	five	out	of	ten	sectors	in	2001.		Improvements	were	notable	in	Retail	(down	by	
  12.2%), Health/Education/State Gov (down by 10.9%), and Construction/Local Gov (down by 10.4%). LTIFR increases
  significantly for Rural/Meat/Food/Beverage (up by 35.2%), Freight/Transport/Ports (up by 22.7%), Manufacturing
  (up by 19.7%), and Clothing/ Footwear/Textiles/Miscellaneous sector (up by 12.6%).
Insurer Type
•	By	type	of	insurer,	the	number	of	claims	for	the	12	months	ending	June	2001,	the	percentage	change	from	the	
  previous 12 month period, and the relationship to the set target were:

  ° licensed insurers—8,771 claims, a 4.6% decrease, below the set target;
  ° self-insurers—928 claims, a 3.0% increase, still below the set target; and
  ° Tasmanian State Service (TSS)—1,624 claims, a 6.8% decrease, below the set target.




                                                            Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    45
     Workers Compensation Statistics
     12 Months Ending June 2001


     Lost Time
     •	Over	the	past	three	years	lost	time	claims,	on	average,	accounted	for	approximately	35%	of	all	claims	reported	for	
       each payment year.
     •	During	the	12	months	ending	June	2001,	average	lost	time	per	claim	was	16.2	working	days	or	approximately	1.4	
       working days per month or less than one-third of a working day per week.
     •	Average	lost	time	per	claim	decreased	in	the	12	months	ending	June	2001	(by	16.2%).


     Claim Payments

     Overall
     •	A	total	of	$122.809m	was	paid	out	during	the	12	months	ending	June	2001.		This	represents	a	decrease	of	4.4%	
       relative to the amount paid out in the same period in 2000.
     •	Common	law	payments	and	negotiated	settlements	combined	was	the	major	component	of	total	payments	in	the	
       period to June 2001 (44.4%), followed by weekly benefits (23.6%), and medical costs (20.1%).
     •	Legal	and	investigation	costs	constituted	11.0%	of	total	payments,	with	lump	sum	payments	contributing	0.9%	to	
       the total.

     Average Weekly Benefits
     •	Over	the	past	three	years	the	number	of	claims	receiving	weekly	benefits,	on	average,	accounted	for	37%	of	all	
       claims reported for each payment year.
     •	During	the	12	months	ending	June	2001,	average	weekly	benefits	per	claim	amounted	to	$4,641	or	approximately	
       $387 per month or $89 per week.
     •	Average	weekly	benefits	per	claim	decreased	in	2001	(by	4.5%),	from	$4,860	in	2000.

     Insurer Type
     •	All	types	of	insurers	recorded	a	decrease	in	total	claim	payments:

       ° licensed insurers—$93.584m—a decrease of 2.7%
       ° self-insurers—$10.408m—a decrease of 5.3%
       ° Tasmanian State Service—$18.817m, a decrease of 11.9%.
     •	Combined	common	law	and	negotiated	settlements	decreased	dramatically	for	both	self-insurers	and	the	TSS	(by	
       12.0% and 13.1%, respectively, but remained stable for licensed insurers.
     •	The	ratio	of	negotiated	settlement	payments	to	common	law	payments	was	much	higher	for	self-insurers	than	for	
       licensed insurers and the TSS.
     •	Each	type	of	insurer	experienced	a	reduction	in	weekly	benefits	resulting	in	an	overall	reduction	of	9.8%.
     •	Total	medical	costs	declined	by	8.6%.		The	licensed	insurers	and	TSS	experienced	a	reduction	in	total	medical	costs,	
       while self-insurers experienced a slight increase. Reductions in hospital, allied medical and miscellaneous costs
       (each down by at least 19%), contributed to the overall decrease for licensed insurers and the TSS. A relatively high
       increase in rehabilitation costs and only a marginal reduction in allied medical costs contributed to the slight
       increase in total medical costs for self-insurers.
     •	Overall,	there	has	been	a	substantial	increase	in	legal	and	investigation	costs	for	the	12	months	ending	June	2001	
       of 18.2%, relative to the same period in 2000. Legal and investigation costs more than doubled for the TSS and
       increased by 59.3% for self-insurers.




46      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workers Compensation Statistics
12 Months Ending June 2001


Premiums

Overall
The actual average premium rate for the 12 months ending June 2001 was 3.04%. This rate has been relatively stable
since the 12 months ending June 2000.

Rates Charged by Insurers
The actual average premium rates charged by licensed insurers ranged from 1.42% to 3.93% during the 12 months
ending June 2001.
Seven insurers increased their premium rates. Increases ranged from as low as 0.4% to 27.2%. Two insurers decreased
premium rates.
Individual insurer market share, as a percentage of the total earned premium pool, ranged from 0.6% to 32.8% for the
12 months ending June 2001, with the two largest insurers holding 43.8% of the total earned premium pool.

Average Premium Rates by Industry
Among the top 50 industries based on the total number of employers in each industry, the highest overall average
premium rates were recorded for logging (15.14%), beef cattle farming (7.05%), site preparation services (6.43%), and
sheep farming (6.29%).
The lowest premium rates were recorded for accounting services (0.85%) and real estate agents as well as services to
insurance (both 1.01%).




                                                            Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    47
         Workers Compensation Statistics
         12 Months Ending June 2001


     1. Claims

     1.1 Overall
     Injury prevention programs aim to reduce the number of injuries, diseases and deaths in the workplace. The trend in
     claim numbers provides a broad indicator of performance in this area. The number of claims lodged for any period
     refers to the number of claims reported based on the date claims are lodged by workers with their employers. The
     total number of claims for each twelve-month period was counted as at 31 July 2001.

                                                             Table 1: Total Number of Claims Lodged
         Rolling 12 Month Period                        Fatalities                    Lost Time               No Lost Time             All Claims
                  Jun-99                                   17                           4,256                    8,174                   12,447
                  Sep-99                                   13                           4,112                    8,080                   12,205
                  Dec-99                                   13                           4,021                    8,073                   12,107
                  Mar-00                                    6                           3,907                    7,927                   11,840
                  Jun-00                                    4                           3,849                    7,980                   11,833
                  Sep-00                                    4                           3,965                    7,920                   11,889
                  Dec-00                                    6                           3,976                    7,705                   11,687
                  Mar-01                                    8                           3,990                    7,690                   11,688
                  Jun-01                                   10                           3,955                    7,358                   11,323
         % Change Jun-00 to Jun-01                       150.0%                         2.8%                     -7.8%                   -4.3%


                                                                 Number of Claims Lodged
                        15000                                                                                                             20
     Number of Claims




                                                                                                                                               Number of Fatalities
                        12000
                                                                                                                                          15
                         9000
                                                                                                                                          10
                         6000
                                                                                                                                          5
                         3000

                             0                                                                                                            0
                                  Jun-99     Sep-99     Dec-99        Mar-00        Jun-00    Sep-00   Dec-00       Mar-01    Jun-01
                                                                          12 Months Ending
                                       All Claims                    No Lost Time                 Lost Time                  Fatalities


     Ten fatalities were reported in the 12 months ending June 2001. This is 2.5 times the number reported in the period
     to June 2000 (four fatalities).
     The total number of lost time claims (claims with lost time of one day or more) increased by 2.8% during the 12-month
     period ending June 2001 (3,955 lost time claims) relative to the same period in 2000 (3,849 lost time claims).
     The number of minor injuries as represented by no lost time claims declined at a higher rate of 7.8%. The number of
     no lost time claims for the period ending June 2000 was 7,980 while the number for the same period in 2001 was
     7,358.
     Overall, for the 12 months ending June 2001, the total number of claims was 11,323 a decrease of 4.3% compared to
     the total number of claims incurred during the 12 months ending June 2000 (11,833).




48                      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workers Compensation Statistics
12 Months Ending June 2001


1.2    Industry Sectors

1.2.1 Claim Numbers
                                        Table 2: Claim Numbers by Industry Sectors
                                                                                                                % Change
Description of Sector                            Rolling 12 Month Period
                                                                                                                   Jun-00
                               Jun-99   Sep-99 Dec-99 Mar-00 Jun-00        Sep-00   Dec-00   Mar-01   Jun-01    to Jun-01
 Rural/Meat/Food/Bev           1,610     1,573  1,536  1,466  1,445         1,446    1,468    1,441     1,376        -4.8%
 Health/Educ/State Gov         3,082     3,000  3,034  2,920  2,909         2,862    2,728    2,743     2,744        -5.7%
 Entertainment/Hosp              545       523    496    485    482           468      474      476       456        -5.4%
 Clothing/Footw/Text/Misc      1,027       992    961    883    888           942      977    1,013       981       10.5%
 Forestry/Logging//Printing    1,064     1,031    990    962    969           967      955      947       888        -8.4%
 Freight/Transport/Ports         681       671    659    639    636           650      663      696       686         7.9%
 Mines/Quarries/Energy           454       448    448    441    434           426      436      453       443         2.1%
 Construction/Local Gov        1,338     1,331  1,312  1,338  1,319         1,297    1,254    1,183     1,129      -14.4%
 Manufacturing                 1,227     1,200  1,247  1,357  1,426         1,527    1,476    1,470     1,359        -4.7%
 Retail                        1,419     1,436  1,424  1,349  1,325         1,304    1,256    1,266     1,261        -4.8%
 All Industries               12,447    12,205 12,107 11,840 11,833        11,889   11,687   11,688    11,323        -4.3%



The industry sectors presented in this report are based on the industry sector groups classified by the Workplace
Safety Inspectorate of Workplace Standards Tasmania.
Health/Education/State Government, the largest of the ten industry sectors, recorded the highest number of claims
lodged in the 12 months ending June 2001 (2,744). Claim numbers, however, declined in this sector (by 5.7%)
compared to the number lodged in the same period in 2000 (2,909).
Reductions in claim numbers were recorded in all but three sectors. The most notable reductions were evident in
Construction/Local Government (by 14.4%) and Forestry/Logging/Paper/Printing (8.4%).
Clothing/Footwear/Textiles/Miscellaneous,	 Freight/Transport/Ports,	 and	 Mines/Quarries/Energy	 experienced	
increases in claim numbers, by 10.5%, 7.9%, and 2.1%, respectively.


                                 Table 3: All Claims Frequency Rates by Industry Sector
                                                                                                                % Change
Description of Sector                               12 Months Ending
                                                                                                                   Jun-00
                              Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00 Dec-00 Mar-01                 Jun-01    to Jun-01
Rural/Meat/Food/Bev              65.0   63.1   62.0  54.3    49.5    49.7   52.7   54.9                    54.3       9.7%
Health/Educ/State Gov            49.4   48.0   48.7  47.4    45.5    42.7   40.1   39.4                    40.6    -10.8%
Entertainment/Hosp               38.9   35.7   33.8  33.7    32.3    31.9   33.4   35.2                    36.5     13.0%
Clothing/Footw/Text/Misc         28.6   26.0   23.9  21.7    21.7    23.0   25.2   25.5                    22.9       5.6%
Forestry/Logging//Printing       71.0   69.7   67.6  70.1    76.0    77.8   76.8   76.4                    72.2      -5.0%
Freight/Transport/Ports          49.6   48.0   46.8  40.9    38.3    38.3   41.0   44.4                    44.1     15.1%
Mines/Quarries/Energy            60.8   59.4   56.7  55.2    58.3    56.7   55.4   58.9                    55.7      -4.5%
Construction/Local Gov           58.0   58.2   58.5  63.0    60.0    58.9   58.5   53.5                    52.5    -12.6%
Manufacturing                    73.4   70.8   73.1  79.8    82.9    92.9   91.0   92.7                    82.2      -0.8%
Retail                           35.6   35.8   35.6  33.6    32.8    31.8   29.7   28.6                    27.5    -16.1%
All Industries                   49.2   47.6   46.9  45.6    44.6    44.3   44.1   43.7                    42.3      -5.2%




1.2.2 All Claims Frequency Rate
In the 12 months ending June 2001, average ACFR for All Industries was 42.3 claims per million hours worked,
representing a decrease of 5.2% compared to ACFR of 44.6 in 2000.
Two sectors demonstrated significantly lower ACFRs than the All Industries average for the period ending June 2001.
They were Retail (27.5), and Clothing/ Footwear/Textiles/Miscellaneous (22.9).


                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT       49
      Workers Compensation Statistics
      12 Months Ending June 2001


                                               All Claims Frequency Rate, Sectors 1 to 5
            100

             80
     ACFR




             60

             40

             20

              0
                   Jun-99        Sep-99     Dec-99        Mar-00        Jun-00      Sep-00         Dec-00     Mar-01       Jun-01
                                                                    12 Months Ending
                         Construction/Local Gov                      Mines/Quarries/Energy                              Manufacturing
                         Rural/Meat/Food/Bev                         Forestry/Logging/Printing                          All Industries



                                               All Claims Frequency Rate, Sectors 6 to 10
             60
             50
             40
     ACFR




             30
             20
             10
              0
                   Jun-99    Sep-99       Dec-99       Mar-00      Jun-00    Sep-00       Dec-00     Mar-01    Jun-01          Jun-01
                                                                    12 Months Ending
                        Clothing/Footw/Textiles/Misc                 Entertainment/Hosp                       Freight/Transport/Ports
                        Retail                                       Health/Educ/State Gov                    All Industries




50          Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workers Compensation Statistics
12 Months Ending June 2001


ACFRs	for	Manufacturing	(82.2),	Forestry/Logging/Printing	(72.2),	Mines/Quarries/Energy	(55.7),	Rural/Meat/	Food/
                                        Table 4: Lost Time Injuries by Industry Sector
                                                                                                                 % Change
Description of Sector                                12 Months Ending
                                                                                                                    Jun-00
                               Jun-99   Sep-99   Dec-99   Mar-00 Jun-00    Sep-00   Dec-00   Mar-01    Jun-01    to Jun-01
Rural/Meat/Food/Bev              665      659      626      564     542       602      614      639        636       17.3%
Health/Educ/State Gov          1,063    1,063    1,026    1,013   1,004     1,005      928      931        946        -5.8%
Entertainment/Hosp               181      165      162      150     161       158      154      133        142      -11.8%
Clothing/Footw/Textiles/Misc     371      349      336      309     314       338      381      399        370       17.8%
Forestry/Logging/Printing        299      284      289      280     281       269      287      276        268        -4.6%
Freight/Transport/Ports          226      229      252      253     240       237      251      261        276       15.0%
Mines/Quarries/Energy            103      110      122      122     111       130      117      122        118         6.3%
Construction/Local Gov           444      410      403      425     408       414      405      374        358      -12.3%
Manufacturing                    401      373      350      356     366       417      428      442        421       15.0%
Retail                           503      470      455      435     422       395      411      413        420        -0.5%
All Industries                 4,256    4,112    4,021    3,907   3,849     3,965    3,976    3,990      3,955         2.8%


Beverage (54.3), and Construction/Local Gov (52.5) were higher than the All Industries average for the 12 months
ending June 2001.
Decreases in ACFR were observed among six of the ten sectors, with notable reductions in ACFR evident in Retail (by
16.1%), Construction/Local Gov (by 12.6%), and Health/Education/State Gov (by 10.8%). ACFR increased substantially
for Freight/Transport/Ports (15.1%) and Entertainment/Hospitality (13.0%).




                               Table 5: Lost Time Injury Frequency Rates by Industry Sector
                                                                                                                 % Change
Description of Sector                                12 Months Ending
                                                                                                                    Jun-00
                               Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00 Dec-00 Mar-01                 Jun-01    to Jun-01
Rural/Meat/Food/Bev               26.9   26.4   25.3  20.9    18.6    20.7   22.1   24.3                    25.1     35.2%
Health/Educ/State Gov             17.0   17.0   16.5  16.4    15.7    15.0   13.6   13.4                    14.0    -10.9%
Entertainment/Hosp                12.9   11.2   11.0  10.4    10.8    10.8   10.9    9.8                    11.4       5.4%
Clothing/Footw/Textiles/Misc      10.3    9.1    8.4    7.6    7.7     8.3    9.8   10.0                     8.6     12.6%
Forestry/Logging/Printing         19.9   19.2   19.7  20.4    22.0    21.7   23.1   22.3                    21.8      -1.2%
Freight/Transport/Ports           16.5   16.4   17.9  16.2    14.5    13.9   15.5   16.7                    17.7     22.7%
Mines/Quarries/Energy             13.8   14.6   15.4  15.3    14.9    17.3   14.9   15.9                    14.8      -0.6%
Construction/Local Gov            19.3   17.9   18.0  20.0    18.6    18.8   18.9   16.9                    16.6    -10.4%
Manufacturing                     24.0   22.0   20.5  20.9    21.3    25.4   26.4   27.9                    25.5     19.7%
Retail                            12.6   11.7   11.4  10.8    10.4     9.6    9.7    9.3                     9.2    -12.2%
All Industries                    16.8   16.0   15.6  15.1    14.5    14.8   15.0   14.9                    14.8       1.8%




                                                                Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      51
      Workers Compensation Statistics
      12 Months Ending June 2001


                                           Lost Time Injury Frequency Rates, Sectors 1 to 5
             30
             25
             20
     LTIFR




             15
             10
              5
              0
                    Jun-99       Sep-99      Dec-99     Mar-00          Jun-00      Sep-00    Dec-00    Mar-01          Jun-01
                                                                   12 Months Ending
                        Construction/Local Gov                    Forestry/Logging/Printing              Manufacturing
                        Freight/Transport/Ports                   Rural/Meat/Food/Bev                    All Industries



                                           Lost Time Injury Frequency Rates, Sectors 6 to 10
             20

             16
     LTIFR




             12

              8

              4

              0
                    Jun-99       Sep-99      Dec-99      Mar-00         Jun-00      Sep-00    Dec-00    Mar-01          Jun-01
                                                                   12 Months Ending
                        Clothing/Footw/Textiles/Misc           Entertainment/Hosp                      Mines/Quarries/Energy
                        Retail                                 Health/Educ/State Gov                   All Industries



     1.2.3 Lost Time Injuries
     Lost time injury numbers were highest for Health/Education/State Government (946), Rural/Meat/Food/ Beverage
     (636), Manufacturing (421) and Retail (420). These sectors accounted for 23.9%, 16.1%, 10.6%, and 10.8%, respectively,
     of all lost time injuries during the 12 months ending June 2001.
     Five industry sectors experienced reductions in the number of lost time injuries. The most substantial reductions
     were in Construction/Local Government (by 12.3%) and Entertainment/Hospitality (11.8%).
     The number of lost time injuries remained steady for the Retail sector, while significant increases in the number of
     lost time injuries were noted for Clothing/Footwear/Textiles/Miscellaneous sector (17.8%), Rural/Meat/ Food/
     Beverage (17.3%), Manufacturing (15.0%), and Freight/Transport/Ports (15.0%).

     1.2.4 Lost Time Injury Frequency Rate
     Average lost time injury frequency rate (LTIFR) increased marginally (by 1.8%) between the 12 months ending June
     2000 and June 2001, from 14.5 lost time injuries per million hours worked to 14.8 lost time injuries per million hours
     worked.
     The sectors with relatively lower LTIFRs than the All Industries average in the period ending June 2001 were Retail
     (9.2) and Clothing/Footwear/Textiles/Miscellaneous (8.6).




52           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
  Workers Compensation Statistics
  12 Months Ending June 2001


Manufacturing showed the highest LTIFR (25.5) followed by Rural/Meat/Food/Beverage (25.1), and Forestry/ Logging/
Printing (21.8). In addition to recording the highest LTIFR in the 12-month period to June 2001, Manufacturing also
experienced an increase in LTIFR (by 19.7%), from 21.3 lost time injuries per million hours worked in June 2000 to 25.5
lost time injuries per million hours worked in June 2001.
In addition to Manufacturing, the other sectors that did not perform well on the basis of substantial increases in LTIFR
in the period ending June 2001 relative to the same period in 2000 were Rural/Meat/Food/Beverage (up by 35.2%),
Freight/Transport/Ports (up by 22.7%), and Clothing/Footwear/Textiles/Miscellaneous (up by 12.6%).
Improvements in LTIFR occurred in five out of ten sectors in 2001. The industry sectors that experienced notable
                                             Table 6: Number of Claims Lodged by Type of Insurer
  12 Months Ending                         Licensed Insurers           Self Insurers          Tas State Service            All Insurers
       Jun-99                                  10,035                       639                     1,773                    12,447
       Sep-99                                   9,780                       658                     1,767                    12,205
       Dec-99                                   9,538                       749                     1,820                    12,107
       Mar-00                                   9,266                       818                     1,756                    11,840
       Jun-00                                   9,190                       901                     1,742                    11,833
       Sep-00                                   9,241                       930                     1,718                    11,889
       Dec-00                                   9,144                       922                     1,621                    11,687
       Mar-01                                   9,144                       930                     1,614                    11,688
       Jun-01                                   8,771                       928                     1,624                    11,323
  % Change Jun-00 to Jun-01                       -4.6%                   3.0%                      -6.8%                     -4.3%


                                         Number of Claims Lodged by Type of Insurer
                   11000                                                                                               2000
Number of Claims




                                                                                                                                (TSS & Self Insurers)
                                                                                                                                 Number of Claims
   (Licensed)




                                                                                                                       1500
                   10000
                                                                                                                       1000
                    9000
                                                                                                                       500

                    8000                                                                                               0
                           Jun-99   Sep-99        Dec-99   Mar-00    Jun-00      Sep-00   Dec-00   Mar-01     Jun-01
                                                               12 Months Ending
                              Licensed Insurers                      Self Insurers                     Tas State Service




reductions in LTIFR were Retail (down by 12.2%), Health/Education/State Gov (down by 10.9%), and Construction/
Local Gov (down by 10.4%).




                                                                           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT                     53
     Workers Compensation Statistics
     12 Months Ending June 2001


     1.3 Claims by Type of Insurer
     For licensed insurers, 8,771 claims were lodged during the 12 months ending June 2001. This represents a decrease
     of 4.6% compared to the 12 months ending June 2000.
     For self-insurers, 928 claims were lodged during the 12 months ending June 2001. It represents an increase of 3.0%
     compared to the 12 months ending June 2000.
     For the Tasmanian State Service (TSS), 1,624 claims were lodged during the 12 months ending June 2001. This
     represents a decrease of 6.8% compared to the number lodged in the 12 months ending June 2000.


     2 Lost Time
     Lost time, in the absence of more appropriate data, is generally used as a substitute indicator of injury ‘severity’, claim
                                                         Table 7: Average Lost Time per Claim
     12 Months Ending                     Lost Time    Average Lost Time         Average Lost Time          No of Claims       Total Number

                                     (working days)    per lost time claim           per claim             with lost time       of Claims in
                                                         (working days)            (working days)                              Payment Year
           Jun-99                         379,385                59.4                  21.0                    6,392                18,094
           Sep-99                         367,285                57.2                  20.0                    6,425                18,389
           Dec-99                         336,019                54.2                  18.4                    6,197                18,308
           Mar-00                         331,337                53.2                  18.2                    6,227                18,214
           Jun-00                         305,476                50.4                  17.1                    6,057                17,886
           Sep-00                         284,682                47.6                  16.2                    5,986                17,578
           Dec-00                         279,867                46.7                  16.1                    5,989                17,390
           Mar-01                         254,535                42.5                  14.8                    5,996                17,210
           Jun-01                         243,552                41.1                  14.3                    5,928                17,017
       % Change
     Jun-00 to Jun-01                      -20.3%              -18.5%                  -16.2%                  -2.1%                -4.9%

                                                                    Average Lost Time
                            75
        Average Lost Time
          (working days)




                            60

                            45

                            30

                            15

                             0
                                 Jun-99      Sep-99   Dec-99        Mar-00    Jun-00     Sep-00       Dec-00     Mar-01      Jun-01
                                                                        12 Months Ending
                                      Average Lost Time per claim                                 Average Lost Time per lost time claim
                                      (working days)                                              (working days)



     ‘duration’ or ‘return to work’. Indeed, it has its limitations and the manner of its interpretation as an indicator of
     severity, duration or return to work is arbitrary. When presented as trend data, however, movement over time should
     suggest either an improvement or deterioration in performance.
     It is important to note that lost time in any one 12-month period as presented in this section has been aggregated
     based on ‘payment period’ information, and is therefore the sum of lost time incurred by claims from various accident
     or lodgement periods. This basis is different to that used in the estimation of the lost time injury frequency rates
     presented in the previous section, whereby lost time injuries for each 12-month period were counted in respect to
     claims lodged in that period only.



54      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
  Workers Compensation Statistics
  12 Months Ending June 2001




                                                         Table 8: Types of Payments
                                                                                                                               % Change
  Type of Payment                                           12 Months Ending
                                                                                                                                  Jun-00
                         Jun-99    Sep-99       Dec-99     Mar-00     Jun-00     Sep-00      Dec-00        Mar-01     Jun-01   to Jun-01
  CL&NS                  46.873     50.205      53.830     55.146     56.262     57.576      57.094         53.824    54.518       -3.1%
  Weekly                 32.632     33.753      32.810     33.588     32.144     31.476      30.975         29.306    28.981       -9.8%
  Medical                27.149     27.808      27.344     27.803     27.038     26.327      25.830         24.851    24.701       -8.6%
  Legal & Invest         11.927     12.103      11.939     11.859     11.406     12.030      13.142         13.319    13.482      18.2%
  Lump sums               4.025      3.016       2.189      1.571      1.642      1.446       1.417          1.533     1.127     -31.4%
  Total                 122.606    126.886     128.113    129.967    128.493    128.853     128.457        122.833   122.809       -4.4%




                                           Types of Payments as Proportion of Total Payments
             50

             40
Percentage




             30

             20

             10

              0
                       CL&NS                   Weekly                 Medical             Legal & Invest             Lump sums
                  CL&NS = Common Law and                            Types of Payments
                  Negotiated Settlements

                                                           Jun-99               Jun-00            Jun-01




                                                                         Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT          55
      Workers Compensation Statistics
      12 Months Ending June 2001


     Calculating average lost time on a payment period basis is a preferred approach to lodgement period as it provides
                                                   Table 9: Average Weekly Benefits per Claim
      12 Months Ending                Weekly Benefits          Average Weekly                Number of            Total Number
                                          ($m)                   Benefits ($)               Claims with            of Claims in
                                                                                           Weekly Benefits        Payment Year
             Jun-99                       32.632                    4,782                       6,824                  18,094
             Sep-99                       33.753                    4,899                       6,890                  18,389
             Dec-99                       32.810                    4,911                       6,681                  18,308
             Mar-00                       33.588                    4,972                       6,755                  18,214
             Jun-00                       32.144                    4,860                       6,614                  17,886
             Sep-00                       31.476                    4,817                       6,534                  17,578
             Dec-00                       30.975                    4,815                       6,433                  17,390
             Mar-01                       29.306                    4,604                       6,365                  17,210
             Jun-01                       28.981                    4,641                       6,244                  17,017
           % Change
                                          -9.8%                     -4.5%                         -5.6%               -4.9%
        Jun-00 to Jun-01



                                                         Average Weekly Benefits per Claim
                      5500
     Average weekly




                      5000
       benefits ($)




                      4500

                      4000

                      3500

                      3000
                             Jun-99   Sep-99       Dec-99     Mar-00        Jun-00   Sep-00        Dec-00    Mar-01    Jun-01
                                                                        12 Months Ending
                                                                    Average Weekly Benefits ($)




     a reasonable mix of claims from previous to current years. This methodology has the potential to remove the
     differential effect of ‘claims development’ (that is, ‘no lost time claims’ developing into ‘lost time claims’ over time or
     lost time claims at this point in time accumulating more lost time later on)—which would otherwise be present if
     lodgement period data were used. It should, as a result, facilitate comparisons to be made between earlier and more
     recent periods.
     Depending on what one is trying to measure or how one might like to present it, average lost time may be expressed
     in terms of lost time per claim, ie, average is calculated as total lost time incurred for the period divided by the total
     number of claims during the period (ie, irrespective of whether lost time is incurred or not), or expressed in terms of
     lost time per lost time claim, ie, average is calculated as total lost time incurred for the period divided by the number
     of claims for which a lost time of one day or more has been incurred during the period. Both measures are useful.
     The results are presented in the table and chart below.
     Over the past three years, lost time claims, on average, accounted for approximately 35% of all claims in each payment
     year.
     During the 12 months ending June 2001, average lost time per claim was 14.3 working days or approximately 1.4
     working days per month or less than one-third of a working day per week.
     In the same period, average lost time per lost time claim was 41.1 working days or approximately 3.4 working days
     per month or 0.8 of a working day per week.
     Average lost time per claim decreased in the 12 months to June 2001 (by 16.2%), from 17.1 working days in the same
     period in 2000. Average lost time per lost time claim decreased in 2001 (by 18.5%), from 50.4 working days in 2000.
     It is worth noting, but will not be pursued here at length, that in the 12 months ending June 2001 the injuries with
     either a relatively high number of occurrences or high average lost time were: sprains and strains (8,210 claims; 16.1
56           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
  Workers Compensation Statistics
  12 Months Ending June 2001


                                        Table 10: Total Payments by Type of Insurer ($million)
  12 Months Ending                    Licensed Insurers         Self Insurers            Tas State Service             All Insurers
        Jun-99                            88.775                 13.128                       20.706                    122.609
        Sep-99                            92.991                 11.652                       22.246                    126.889
        Dec-99                            95.051                 11.483                       21.580                    128.114
        Mar-00                            97.318                 10.887                       21.762                    129.968
        Jun-00                            96.135                 10.990                       21.368                    128.493
        Sep-00                            98.247                 10.255                       20.351                    128.853
        Dec-00                            97.682                 10.755                       20.020                    128.457
        Mar-01                            92.996                 10.780                       19.057                    122.833
        Jun-01                            93.584                 10.408                       18.817                    122.809
    % Change
                                          -2.7%                   -5.3%                       -11.9%                      -4.4%
  Jun-00 to Jun-01



                                                  Total Payments by Insurer Type
            120
            100
             80
$ Million




             60
             40
             20
              0
                  Jun-99     Sep-99      Dec-99      Mar-00     Jun-00          Sep-00   Dec-00        Mar-01         Jun-01
                                                              12 Months Ending
                                      Licensed Insurers           Self Insurers                   Tas State Service



average lost time), fractures (913 claims; 26.7 average lost time), stress/mental disorder (725 claims; 21.8 average lost
time), RSI/Synovitis (593 claims; 23.7 average lost time), and disorders of spinal vertebrae (347 claims; 30.7 average lost
time). The total number of claims in the 12-month payment period ending June 2001 was 17,017.


3 Payments

3.1 Overall
Total claim payments include all payments made during the reference period, regardless of when the claim was made
or when the injury occurred. Payments are presented in actual dollars.
During the 12 months ending June 2001, all insurers paid a total of $122.809m for workers’ compensation claims
                           Table 11: Common Law and Negotiated Settlement by Type of Insurer ($million)
  12 Months Ending                    Licensed Insurers         Self Insurers            Tas State Service             All Insurers
        Jun-99                            35.348                  5.116                        6.409                     46.873
        Sep-99                            38.814                  4.790                        6.601                     50.205
        Dec-99                            41.272                  5.276                        7.282                     53.830
        Mar-00                            43.019                  4.897                        7.230                     55.146
        Jun-00                            44.095                  5.254                        6.912                     56.262
        Sep-00                            46.770                  4.451                        6.373                     57.594
        Dec-00                            46.708                  4.248                        5.867                     56.822
        Mar-01                            43.294                  4.645                        5.885                     53.824
        Jun-01                            43.884                  4.624                        6.010                     54.518
    % Change
                                          -0.5%                  -12.0%                       -13.1%                      -3.1%
  Jun-00 to Jun-01

made prior to and during that period. This is a decrease of 4.4% relative to the amount paid in the same period in


                                                                    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT          57
       Workers Compensation Statistics
       12 Months Ending June 2001


                                         Common law and Negotiated Settlements by Insurer Type
                 50

                 40
     $ Million




                 30

                 20

                 10

                  0
                        Jun-99      Sep-99      Dec-99       Mar-00         Jun-00      Sep-00       Dec-00       Mar-01       Jun-01
                                                                      12 Months Ending
                                             Licensed Insurers               Self Insurers                 Tas State Service



     2000.
     For the 12 months ending June 2001, common law payments and negotiated settlements combined was the major
     component of total payments (44.4%), followed by weekly benefits (23.6%) and medical costs (20.1%). Legal and
     investigation costs constituted 11.0% of total payments, with lump sum payments contributing 0.9% to the total.
     Over the three years covered by this report, common law and negotiated settlements as a proportion of total
     payments showed a steady increase (from 38.2% in the 12 months ending June 1999 to 43.8% in 2000) and steadied
                        Table 12: Negotiated Settlements and Common Law Payments for the 12 Months ending June 2001
                                             Licensed Insurers          Self-Insurers            Tasmanian State Service        All Insurers
       Common Law $m                             34.769                   1.277                           5.978                   42.024
       Negotiated Settlements $m                  9.115                   3.347                           0.032                   12.494




     to 44.4% in the period ending June 2001. Weekly benefits as a proportion of total payments have declined (from
     26.6% to 25.0% to 23.6%). Legal and investigation costs have fluctuated (from 9.7% to 8.9% through to 11.0%).

     3.2              Average Weekly Benefits
                                                    Table 13: Weekly Benefits by Type of Insurer
       12 Months Ending                      Licensed Insurers          Self Insurers               Tas State Service           All Insurers
             Jun-99                              22.371                   3.042                           7.219                   32.632
             Sep-99                              22.834                   3.026                           7.894                   33.753
             Dec-99                              23.072                   2.944                           6.794                   32.810
             Mar-00                              23.901                   2.980                           6.707                   33.588
             Jun-00                              22.776                   2.871                           6.498                   32.144
             Sep-00                              22.343                   2.902                           6.231                   31.476
             Dec-00                              21.825                   2.833                           6.317                   30.975
             Mar-01                              20.907                   2.759                           5.640                   29.306
             Jun-01                              20.661                   2.693                           5.628                   28.981
         % Change
                                                 -9.3%                       -6.2%                       -13.4%                    -9.8%
       Jun-00 to Jun-01


     As in average lost time, average weekly benefits per claim is based on payment period data and is calculated as the
     total amount of weekly benefits paid during the period divided by the number of claims receiving weekly benefits
     during that period.
     Over the past three payment years, the number of claims receiving weekly benefits on average accounted for
     approximately 37% of all claims.
     During the 12 months ending June 2001, average weekly benefits per claim amounted to $4,641 or approximately
     $387 per month or $89 per week.


58               Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
  Workers Compensation Statistics
  12 Months Ending June 2001


                                                      Weekly Benefit by Insurer Type
            30
            25
            20
$ Million




            15
            10
             5
             0
                   Jun-99       Sep-99       Dec-99      Mar-00     Jun-00          Sep-00   Dec-00        Mar-01       Jun-01
                                                                  12 Months Ending
                                         Licensed Insurers           Self Insurers                  Tas State Service



Average weekly benefits per claim decreased in 2001 (by 4.5%), from $4,860 in 2000.

3.3              Insurer Type

3.3.1 Total Claim Payments by Insurer Type
Licensed insurers made a total of $93.584m claim payments during the 12 months ending June 2001. This is a
decrease of 2.7% over the amount paid out during the 12 months ending June 2000. Reductions in weekly benefits
and medical costs were the main contributors to this decrease.
Self-insurers made a total of $10.408m claim payments during the 12 months ending June 2001. This is a decrease
of 5.3% over the amount paid out during the 12 months ending June 2000.
                                                  Table 14: Medical Costs by Type of Insurer
  12 Months Ending                       Licensed Insurers          Self Insurers            Tas State Service           All Insurers
        Jun-99                               19.014                   2.241                        5.895                   27.149
        Sep-99                               19.311                   2.015                        6.482                   27.808
        Dec-99                               18.960                   1.997                        6.387                   27.344
        Mar-00                               19.063                   1.980                        6.760                   27.803
        Jun-00                               18.439                   1.839                        6.760                   27.038
        Sep-00                               18.018                   1.918                        6.391                   26.327
        Dec-00                               17.890                   1.886                        6.054                   25.830
        Mar-01                               17.588                   1.830                        5.433                   24.851
        Jun-01                               17.928                   1.735                        5.039                   24.701
    % Change
                                              -2.8%                   -5.7%                       -25.5%                    -8.6%
  Jun-00 to Jun-01



                                                      Medical Costs by Insurer Type
            25

            20
$ Million




            15

            10

             5

             0
                   Jun-99       Sep-99       Dec-99      Mar-00     Jun-00          Sep-00   Dec-00        Mar-01       Jun-01
                                                                  12 Months Ending
                                         Licensed Insurers           Self Insurers                  Tas State Service




                                                                        Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT        59
       Workers Compensation Statistics
       12 Months Ending June 2001


     The Tasmanian State Service made a total of $18.817m claim payments during the 12 months ending June 2001. This
     is a decrease of 11.9% from the amount paid out during the 12 months ending June 2000. Common law and weekly
     benefits were the major contributors to this decrease.

     3.3.2 Common Law and Negotiated Settlements
     A total of $54.518m was paid out in combined common law payments and negotiated settlements during the
     12 months ending June 2001. This is a 3.1% decrease over the amount paid out during the 12 months ending June
     2000 ($56.262m).
     Common law and negotiated settlements remained stable for licensed insurers during the 12 months ending June
     2001.
     Self-insurers paid out $4.624m in common law and negotiated settlements during the 12 months ending June 2001.
     This is a 12.0% decrease on the amount paid out during the previous 12 months.
     The Tasmanian State Service paid out $6.010m in common law and negotiated settlements during the 12 months
     ending June 2001. This is a 13.1% decrease on the amount paid out during the 12 months ending June 2000.



                                             Table 15: Legal and Investigation Costs by Type of Insurer
       12 Months Ending                      Licensed Insurers          Self Insurers            Tas State Service           All Insurers
             Jun-99                              10.177                   1.116                        0.634                   11.927
             Sep-99                              10.443                   0.939                        0.721                   12.103
             Dec-99                              10.289                   0.891                        0.759                   11.939
             Mar-00                              10.272                   0.750                        0.837                   11.859
             Jun-00                               9.687                   0.758                        0.961                   11.406
             Sep-00                              10.098                   0.731                        1.200                   12.030
             Dec-00                              10.349                   1.205                        1.588                   13.142
             Mar-01                              10.173                   1.230                        1.916                   13.319
             Jun-01                              10.243                   1.208                        2.031                   13.482
         % Change
                                                  5.7%                       59.3%                   111.2%                    18.2%
       Jun-00 to Jun-01



                                                  Legal & Investigation Costs by Insurer Type
                 12
                 10
                  8
     $ Million




                  6
                  4
                  2
                  0
                        Jun-99      Sep-99      Dec-99       Mar-00         Jun-00      Sep-00   Dec-00       Mar-01        Jun-01
                                                                      12 Months Ending
                                             Licensed Insurers               Self Insurers              Tas State Service




60               Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
  Workers Compensation Statistics
  12 Months Ending June 2001


For the 12 months ending June 2001, all insurers paid out $12.494m in negotiated settlements. This represents 22.9%
of the combined total of common law payments and negotiated settlements for that period.
Licensed insurers paid out the bulk of negotiated settlements ($9.115m), with self-insurers paying out $3.347m. The
ratio of negotiated settlement payments to common law payments was much higher for self-insurers (7.2:2.8) than
licensed insurers (2.1:7.9) and the Tasmanian State Service (0.1:9.9).

3.3.3 Weekly Benefits
In overall terms, weekly benefits amounted to $28.981m for the 12 months ending June 2001, a decrease of 9.8% from
the amount paid out during the 12 months ending June 2000. Each type of insurer experienced a reduction in weekly
                                         Table 16: Lump Sum Payments by Type of Insurer
  12 Months Ending                  Licensed Insurers          Self Insurers            Tas State Service           All Insurers
        Jun-99                           1.861                   1.614                        0.550                     4.025
        Sep-99                           1.585                   0.883                        0.548                     3.016
        Dec-99                           1.458                   0.374                        0.357                     2.189
        Mar-00                           1.062                   0.280                        0.229                     1.571
        Jun-00                           1.138                   0.268                        0.236                     1.642
        Sep-00                           1.018                   0.272                        0.156                     1.446
        Dec-00                           0.910                   0.312                        0.194                     1.417
        Mar-01                           1.033                   0.317                        0.183                     1.533
        Jun-01                           0.869                   0.149                        0.110                     1.127
    % Change
                                       -23.7%                   -44.6%                       -53.5%                   -31.4%
  Jun-00 to Jun-01



                                             Lump Sum Payments by Insurer Type

            1.6
$ Million




            1.2

            0.8

            0.4

            0.0
                  Jun-99   Sep-99       Dec-99      Mar-00     Jun-00          Sep-00   Dec-00        Mar-01       Jun-01
                                                             12 Months Ending
                                    Licensed Insurers           Self Insurers                  Tas State Service



benefits.




                                                                   Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT        61
      Workers Compensation Statistics
      12 Months Ending June 2001


     Licensed insurers paid out $20.661m in weekly benefits during the 12 months ending June 2001. This is a decrease of
     9.3% over the amount paid out during the 12 months ending June 2000.
     Self-insurers paid out $2.693m during the 12 months ending June 2001 (a reduction of 6.2% from the $2.871m paid
     out during the 12 months ending June 2000). The Tasmanian State Service paid out $5.628m during the 12 months
     ending June 2001 (a reduction of 13.4%).

     3.3.4 Medical Costs
     In overall terms, total medical costs declined by 8.6% from $27.038m for the 12 months ending June 2000 to $24.701m
     for the same period in 2001. Reductions in hospital, allied medical and miscellaneous costs, contributed to this overall
     decrease (Appendix A).
                                                     Table 17: Policies and Premiums
      12 Months Ending                Policies        Exposed                 Earned              Earned           Average
                                     (number)     Workers (number)             Wages             Premiums          Premium
                                                                             ($million)          ($million)        Rate (%)
            Jun-99                     14329           158203                3305.247             85.740             2.59%
            Sep-99                     14216           158597                3343.917             90.340             2.70%
            Dec-99                     14090           158788                3358.725             94.128             2.80%
            Mar-00                     13951           159402                3382.938             98.603             2.91%
            Jun-00                     13808           159461                3396.207            102.195             3.01%
            Sep-00                     13685           159847                3462.306            104.772             3.03%
            Dec-00                     13566           159923                3561.863            108.284             3.04%
            Mar-01                     13431           158409                3640.803            110.643             3.04%
            Jun-01                     13205           157268                3717.734            112.907             3.04%
        % Change
                                       -4.4%              -1.4%                   9.5%            10.5%              0.9%.
      Jun-00 to Jun-01



                                                       Estimated Average Premium Rates
                     3.15
     Premium Rates




                     2.94
        Average




                     2.73

                     2.52

                     2.31
                            Jun-99     Sep-99    Dec-99      Mar-00      Jun-00      Sep-00    Dec-00     Mar-01     Jun-01
                                                                       12 Months Ending
                                                                            Premium Rate (%)


     For the 12 months ending June 2001, the total cost of medical services for licensed insurers was $17.928m, a decrease
     of 2.8% from the 12 months ending June 2000. This slight decrease is attributed to increases in doctors’ costs (up by
     $0.533m) and rehabilitation costs (up by $0.323m), offset by decreases in other medical costs, especially hospital
     (down by $0.164m) and allied medical services (down by $0.866m) (Appendix A).
     For the 12 months ending June 2001, the total cost of medical services for self-insurers was $1.735m, a decrease of
     5.7% from the 12 months ending June 2000. Significant decreases in hospital and miscellaneous costs contributed
     to this trend. (Appendix A).
     Total medical costs decreased for the Tasmanian State Service by 25.5% from $6.760m for the 12 months ending June
     2000 to $5.039m during the same period in 2000. While there has been a notable reduction in the cost of allied
     medical services (down by $1.833m) and marginal reductions in hospital and miscellaneous medical costs, these have
     been offset by increases in doctors’ costs (up by $0.653m) and rehabilitation costs (up by $0.222m) (Appendix A).

     3.3.5 Legal and Investigation Costs

62          Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workers Compensation Statistics
12 Months Ending June 2001


                                Table 18: Average Premium Rates Charged by Insurers
      Insurer              12 Months                12 Months                Market Share               % Change
                             Ending                   Ending                  for Jun-01                Jun-00 to
                             Jun-00                   Jun-01                                             Jun-01
         A                   3.49%                    3.25%                     32.8%                      -6.9%
         B                   1.28%                    1.42%                      0.6%                      10.9%
         C                   3.39%                    3.93%                     11.0%                      15.9%
         D                   1.38%                    1.56%                      0.6%                      13.0%
         E                   2.84%                    2.42%                     11.2%                     -14.8%
         F                   2.35%                    2.99%                      6.2%                      27.2%
         G                   2.56%                    2.57%                     13.9%                       0.4%
         H                   3.04%                    3.84%                     12.8%                      26.3%
          I                  2.99%                    3.35%                      6.4%                      12.0%
          J                     n.a.                  2.35%                      4.6%                         n.a.
    All Insurers              3.01%                   3.10%                    100.0%                       3.0%


Legal and investigation costs for all insurers amounted to $13.482m for the 12 months ending June 2001. This
amount represents a significant increase of 18.2% compared with the amount of $11.406m for the same period in
2000.
Legal and investigation costs for licensed insurers increased by 5.7% from $.687m in the 12 months ending June 2000
to $10.243m in 2001.
Self-insurers paid out $1.208m in legal and investigation costs during the 12 months ending June 2001, a significant
increase of 59.3% from the amount paid out during the 12 months ending June 2000 ($0.758m).
Legal and investigation costs increased substantially for the Tasmanian State Service by 111.2% from $0.961m for the
12 months ending June 2000 to $2.031m for the 12 months ending June 2001.

3.3.6 Lump Sum Payments
Lump sum payments consist of maims, death benefits and redemptions. Overall lump sum payments decreased from
$1.642m for the 12 months ending June 2000 to $1.127m for the 12 months ending June 2001. This is a decrease of
31.4%. The major contributor to this decrease was the decrease in maims payments (down by $0.633m).
All types of insurers recorded substantial proportional decreases in lump sum payments for the 12 months ending
June 2001 compared to the 12 months ending June 2000.




                                                           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    63
     Workers Compensation Statistics
     12 Months Ending June 2001

                           Table 19: Premium Rates for the Top 50 Industries, 12 months ending June 2001 (%)
     Anzsic           Description                 Number Industry as




                                                                                                                                          All Insurers
                                                    of     % of Total
                                                 Employers Number of
                                                           Employers      A     B     C     D     E       F      G    H      I      J
     6110     Road Freight Transport               362       2.7%        3.85   -    4.26   6.07 4.80    6.72   7.30 6.56   5.11   4.75   4.88
     5125     Takeaway Food Retailing              344        2.6%       2.44   -    3.46   -    2.66    3.13   1.84 2.31   1.66   2.74   2.13
     5730     Cafes and Restaurants                344        2.6%       3.92   -    3.73   4.20 1.80    2.92   0.54 2.35   2.08   1.85   1.19
      130     Dairy Cattle Farming                 333        2.5%       5.58   -    7.36   -    7.18    4.75   5.51 6.85   5.05   4.83   5.41
      124     Sheep Farming                        322        2.4%       5.73   -    9.19   -    5.46    7.06   6.09 7.01   5.03   5.26   6.29
      123     Sheep-Beef Cattle Farming            286        2.2%       6.54   -   11.00 28.99 5.38     6.59   5.55 7.44   5.36   5.32   6.00
     8621     General Practice Medical Services 274           2.1%       1.12   -    1.13   1.59 0.98    1.37   0.97 2.89   1.51   1.01   1.09
     9526     Hairdressing and Beauty Salons       260        2.0%       1.92   -    1.95   1.48 1.62    2.36   1.28 2.02   1.53   1.54   1.51
     5329     Automotive Repair and Services       252        1.9%       3.68   -    3.82   -    2.54    3.47   2.74 3.08   2.67   2.57   3.14
     5710     Accommodation                        243        1.8%       3.74   -    3.07 10.02 2.68     2.73   3.72 3.33   2.42   2.04   3.22
     5720     Pubs, Taverns and Bars               222        1.7%       2.19   -    3.94   5.93 1.62    2.56   1.67 2.32   2.80   2.52   2.22
     4111     House Construction                   189        1.4%       5.69   -    7.78   -    6.61    7.57   4.29 6.37   6.70   6.59   5.43
     5259     Retailing n.e.c.                     169        1.3%       1.63   -    2.83   -    1.85    2.25   2.07 1.91   1.63   1.95   1.92
      113     Vegetable Growing                    156        1.2%       5.22   -    7.61   7.03 4.38    6.27   5.73 5.31   4.82   4.47   5.65
     4232     Electrical Services                  156        1.2%       3.86   -    5.62   -    1.44    3.76   3.78 4.30   3.67   3.13   2.76
     5321     Automotive Fuel Retailing            155        1.2%       2.54   -    3.10   -    1.96    3.01   2.45 2.62   3.48   2.15   2.50
     7855     Business Management Services         151        1.1%       1.07   -    1.51   1.05 1.11    1.27   1.03 1.18   1.15   1.03   1.18
     5251     Pharmaceutical, Cosmetic retail      148        1.1%       1.53   -    1.53   0.99 1.84    1.77   1.25        1.33   1.87   1.06
     7834     Computer Consultancy Services        147        1.1%       0.88   -    0.89   1.18 1.20    1.14   1.12 2.03   1.52   1.00   1.06
     5110     Supermarket and Grocery Stores       146        1.1%       2.86   -    3.57   -    1.19    2.52   2.05 2.20   2.46   1.65   2.71
     5243     Newspaper, Book and Stationery       144        1.1%       1.49   1.23 1.34   2.22 1.48    1.74   1.17 1.65   1.54   1.41   1.39
     5740     Clubs (Hospitality)                  141        1.1%       2.75   -    3.63   -    2.54    2.99   2.43 2.69   2.72   2.38   2.77
      159     Livestock Farming n.e.c.             139        1.1%       8.82   -   10.59   -    5.40    7.32   4.90 8.25   4.90   5.00   5.67
     7842     Accounting Services                  131        1.0%       1.09   -    0.78   0.87 0.76    0.93   0.77 1.19   0.97   0.78   0.85
     4210     Site Preparation Services            130        1.0%       6.84   -    7.97   -    5.67    6.80   6.11 6.35   4.95   5.82   6.43
      122     Grain-Sheep and Grain-Beef Cat       121        0.9%       5.99   -    8.12   -    5.15    6.00   5.61 6.42   5.16   5.10   5.54
     7854     Business Administrative Services     121        0.9%       1.07   0.55 1.07   0.73 1.34    2.50   1.32 1.12   1.26   1.24   1.13
     7866     Cleaning Services                    121        0.9%       7.40   -    8.43   4.55 4.16 11.86     2.19 6.65   7.15   4.81   4.85
     7823     Consulting Engineering Services      117        0.9%       1.15   -    1.66   0.75 1.08    0.82   0.89 1.90   2.50   1.03   1.05
     5221     Clothing Retailing                   116        0.9%       2.10   -    1.59   1.69 1.56    1.23   1.27 1.35   1.49   1.59   1.56
     7841     Legal Services                       115        0.9%       1.65   -    1.76   1.00 1.16    1.25   1.31 1.51   1.28   1.13   1.40
      302     Logging                              112        0.8%      14.40   -   23.48   -   15.75 17.86 15.55 15.23 24.12 13.66 15.14
     9629     Interest Groups n.e.c.               110        0.8%       2.18   -    3.18   1.93 1.65    1.87   1.71 7.85   1.90   1.58   3.60
     5233     Domestic Hardware Retail             107        0.8%       3.43   -    2.53   -    0.44    1.95   2.82 1.88   2.13   0.46   1.88
     7720     Real Estate Agents                   104        0.8%       0.93   -    0.86   -    1.30    1.03   1.03 1.03   1.22   1.27   1.01
      125     Beef Cattle Farming                  100        0.8%       6.31   -    9.36   7.18 30.09   7.27   6.79 7.25   5.07   -      7.05
     8623     Dental Services                       91        0.7%       1.29   -    1.06   1.21 0.88    1.45   1.02        1.59   1.12   1.14
     7520     Services to Insurance                 90        0.7%       0.96   -    0.96   1.21 0.84    1.38   0.86 1.03   0.93   0.79   1.01
     8622     Specialist Medical Services           90        0.7%       1.52   -    1.16   -    0.91    1.23   0.99 6.02   1.42   0.95   1.20
     4231     Plumbing Services                     88        0.7%       4.46   -    9.17   -    4.55    5.40   5.18 5.59   6.94   4.55   4.97
     5323     Smash Repairing                       86        0.7%       2.55   -    5.02   -    3.08    5.33   3.47 2.92   2.98   3.00   3.02
      219     Services to Agriculture n.e.c.        81        0.6%       4.95   -    3.76   -    4.89    7.16   5.62 6.73   1.92   4.64   3.63
     6122     Short Distance Bus Transport          81        0.6%       3.53   -    4.55   -    5.06    5.07   5.04 3.89   4.71   4.18   3.73
     9621     Business and Professional Assoc       78        0.6%       1.52   -    1.16   0.97 1.76    1.59   1.02 1.14   1.32   1.49   1.14
     5121     Fresh Meat, Fish and Poultry R        75        0.6%       4.29   -    6.35   2.95 3.96    6.77   4.66 4.07   2.88   4.55   4.15
     4244     Painting and Decorating Services      74        0.6%       6.54   -    8.56   -    5.35    5.97   5.08 5.02   6.48   5.09   5.32
     9610     Religious Organisations               74        0.6%       4.12   3.63 4.20   -    3.30    3.67   3.40 4.98   4.97   4.29   4.07
      115     Apple and Pear Growing                72        0.5%       4.81   -    5.72   -    5.40    4.44   5.16 4.62   5.24   5.29   5.02
     5234     Domestic Appliance Retailing          71        0.5%       1.59   -    2.44   -    1.43    1.40   2.94 2.16   1.49   1.70   2.17
     6123     Taxi and Other Road Passenger         71        0.5%       4.91   -           -     -      6.62   5.93 5.07   5.26   -      5.45



64     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix A Medical Costs



4 Premiums
                                         Table A1: Doctors Costs ($million)
12 Months Ending             Licensed Insurers         Self Insurers           Tas State Service         All Insurers
      Jun-99                      5.763                  0.801                       0.946                   7.510
      Sep-99                      5.828                  0.720                       0.978                   7.526
      Dec-99                      5.621                  0.684                       0.952                   7.257
      Mar-00                      5.608                  0.731                       0.972                   7.311
      Jun-00                      5.474                  0.710                       0.913                   7.097
      Sep-00                      5.487                  0.767                       1.033                   7.286
      Dec-00                      5.599                  0.796                       1.227                   7.622
      Mar-01                      5.660                  0.746                       1.397                   7.804
      Jun-01                      6.007                  0.743                       1.566                   8.315
  % Change
                                  9.7%                    4.6%                       71.4%                  17.2%
Jun-00 to Jun-01



4.1   Overall

                                         Table A2: Hospital Costs ($million)
12 Months Ending             Licensed Insurers         Self Insurers           Tas State Service         All Insurers
      Jun-99                      2.707                  0.382                       0.499                   3.588
      Sep-99                      2.725                  0.274                       0.586                   3.586
      Dec-99                      2.491                  0.286                       0.564                   3.341
      Mar-00                      2.432                  0.240                       0.525                   3.197
      Jun-00                      2.195                  0.189                       0.488                   2.872
      Sep-00                      2.023                  0.202                       0.498                   2.723
      Dec-00                      2.097                  0.146                       0.460                   2.703
      Mar-01                      2.000                  0.146                       0.425                   2.571
      Jun-01                      2.031                  0.119                       0.396                   2.546
  % Change
                                 -7.5%                   -36.9%                     -18.9%                   11.3%
Jun-00 to Jun-01




The actual average premium rate based on earned premium data provided by licensed insurers for the 12 months
ending June 2001 was 3.04%. This rate has been relatively stable since the12 months ending June 2000.
                                      Table A3: Rehabilitation Costs ($million)
12 Months Ending             Licensed Insurers         Self Insurers           Tas State Service         All Insurers
      Jun-99                      4.467                  0.406                       1.010                   5.883
      Sep-99                      4.640                  0.369                       1.152                   6.161
      Dec-99                      4.779                  0.329                       1.265                   6.373
      Mar-00                      4.922                  0.311                       1.492                   6.724
      Jun-00                      4.943                  0.296                       1.608                   6.847
      Sep-00                      5.061                  0.329                       1.699                   7.089
      Dec-00                      5.054                  0.362                       1.756                   7.172
      Mar-01                      5.109                  0.353                       1.755                   7.218
      Jun-01                      5.266                  0.333                       1.830                   7.429
  % Change
                                  6.5%                    12.7%                      13.8%                    8.5%
Jun-00 to Jun-01


This relative stability is the result of the increase in total earned premium pool being offset by a corresponding
increase in wages. The total earned premium pool increased by 10.5%, from $102.195m for the 12 months ending
June 2000 to $112.907m for the 12 months ending June 2001. There has been, however, a corresponding increase in
total earned wages (by 9.5%), from $3396.207m to $3717.734m.

4.2   Average Premium Rates Charged by Insurers


                                                           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT     65
     The actual average premium rates for licensed insurers ranged from 1.42% to 3.93% during the 12 months ending

                                             Table A4: Allied Medical Costs ($million)
     12 Months Ending                Licensed Insurers          Self Insurers           Tas State Service         All Insurers
           Jun-99                         4.323                   0.378                       2.496                   7.197
           Sep-99                         4.371                   0.356                       2.824                   7.551
           Dec-99                         4.349                   0.380                       2.684                   7.413
           Mar-00                         4.367                   0.394                       2.755                   7.516
           Jun-00                         4.180                   0.390                       2.766                   7.336
           Sep-00                         3.896                   0.409                       2.293                   6.597
           Dec-00                         3.658                   0.406                       1.891                   5.954
           Mar-01                         3.444                   0.404                       1.398                   5.246
           Jun-01                         3.315                   0.373                       0.933                   4.621
       % Change
                                        -20.7%                     -4.3%                     -66.3%                  -37.0%
     Jun-00 to Jun-01



     June 2001. Premium rating is influenced by a variety of factors, such as type of risk exposure, the industry mix in each
     insurer’s portfolio, claims experience, Tasmanian and national experience, allowance for prudential margins, and
                                             Table A5: Miscellaneous Costs ($million)
     12 Months Ending                Licensed Insurers          Self Insurers           Tas State Service         All Insurers
           Jun-99                         1.755                   0.273                       0.943                   2.971
           Sep-99                         1.747                   0.295                       0.943                   2.985
           Dec-99                         1.719                   0.319                       0.922                   2.961
           Mar-00                         1.734                   0.305                       1.016                   3.055
           Jun-00                         1.647                   0.254                       0.985                   2.885
           Sep-00                         1.551                   0.211                       0.869                   2.631
           Dec-00                         1.484                   0.176                       0.720                   2.379
           Mar-01                         1.375                   0.180                       0.457                   2.012
           Jun-01                         1.309                   0.166                       0.315                   1.789
       % Change
                                        -20.5%                     -34.5%                    -68.1%                  -38.0%
     Jun-00 to Jun-01


     economic assumptions about inflation, interest rates and discount rates applied.
     As a result of the financial collapse of HIH in the latter part of the 2000–01 financial year, the HIH workers compensation
     business was taken over by NRMA Insurance in the last quarter of the financial year.
     Seven insurers increased their average premium rates from the 12 months ending June 2000 to the 12 months
     ending June 2001. The percentage increases ranged from as low as 0.4% to 27.2%. Two insurers decreased premium
     rates.
     Market share, as a percentage of the total earned premium pool, ranged from 0.6% to 32.8% for the 12 months ending
     June 2001, with the two largest insurers holding 46.7% of the total earned premium pool.

     4.3 Industry Average Premium Rates for the top 50 Industries
     For the 12 months ending June 2001, the total number of employers based on the total number of policies for the
     top 50 industries was 7,710. The top 50 industries accounted for 58.4% of the total number of employers for the 411
     industry groups identified by insurers (13,205 policies in total).
     Actual premium rates for each industry group, as defined by the Australian and New Zealand Standard Industrial
     Classification, varied considerably by industry.
     Among the top 50 industries, the highest overall premium rates were recorded for the logging industry (15.14%), beef
     cattle farming (7.05%), site preparation services (6.43%), and sheep farming (6.29%).
     The lowest premium rates were recorded for accounting services (0.85%), and real estate agents and services to
     insurance (both 1.01%).



66      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Table A1: Doctors Costs ($million)

Table A2: Hospital Costs ($million)

Table A3: Rehabilitation Costs ($million)

Table A4: Allied Medical Costs ($million)

Table A5: Miscellaneous Costs ($million)




                                            Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   67
Appendices
     Appendix 1 – Licensed Insurers



     As at 30 June 2001
     Allianz Aust General Insurance Ltd
     CGU Insurance
     Zurich Aust Insurance Ltd
     Guild Insurance Ltd
     QBE	Insurance	(Australia)	Ltd
     Royal & Sun Alliance Aust Ltd
     Catholic Church Insurances (Specialised Insurer)
     GIO General Limited
     NRMA Insurance Group Limited




70     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix 2 – Self-Insurers



As at 30 June 2001
ANZ
Cadbury Schweppes Pty Ltd
Comalco Aluminium (Bell Bay)
National Australia Bank Ltd
PaperlinX Limited (Australian Paper)
Gunns Forest Products Pty Ltd
Pasminco Hobart Smelter
Pasminco Rosebery
Westpac Banking Corporation
National Foods Milk Limited
Forestry Tasmania
Commonwealth Bank of Australia
Blue Ribbon Meat Products
Blundstone Pty Ltd
BHP Temco
Woolworths (Victoria) Pty Limited
Coles Myer Limited




                                       Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   71
     Appendix 3 — Publications List


     General                                                       Hazardous substances
     Publications List                                             How to HAZCHEM Placard Premises Storing Dangerous
                                                                   Goods
     Video Catalogue
                                                                   Play it SAFE with Chemicals: A guide to Managing
     Workplace Issues (quarterly magazine)
                                                                   Hazardous Substances in the Workplace
     Long Service Leave Guide – A Guide to the Long Service
     Leave Act 1976
                                                                   Plant
     What is Workplace Safe?
                                                                   Plant Safety: Registration and Record Keeping
     Directory of Service Providers                                Requirements Applying in Tasmania
     (This directory is only available on our Web site.)
                                                                   Industrial Equipment Requiring an OHS Certificate of
                                                                   Competency
     Workplace health and safety
     Duty of Care                                                  Codes of practice
     Enforcement Policy                                            Codes of Practice: A Guide
     Guidance Information – Responsible Officer                    Draft Code of Practice for Sawmill Operation
     What You Don’t know Can Hurt You (wallet guide)               Draft Forestry Safety Code
     A Guide to the Workplace Health and Safety Act                Working At Heights In Commercial Construction
     Rural Workplace Health and Safety Guide                       Managing the Risk of Falling in Housing Construction
     A Healthy and Safe Workplace – An Information Guide
     for Workers                                                   Safety bulletins
     Welcome to the Workplace – A Safety Kit for New               SB001   A Guide for the Election of an Employees’
     Workers                                                               Safety Representative
     Hazard Management: Play it SAFE                               SB001a Employees’ Safety Representatives A Guide to
     The Workplace Health and Safety Regulations                          Duties, Responsibilities and Powers.

     Play it SAFE with Manual Handling: An Introductory            SB005   The Safe Use of Brushcutters
     Guide to Reducing the Risk of Manual Handling Injuries        SB008   How Loud?
     in the Workplace
                                                                   SB009   How to Manage Shiftwork
     Workplace Health and Safety Basics for Cleaners:
     Responsibilities, Problems and Solutions                      SB010   Shiftwork – How to Devise an Effective Roster

     Emergency Evacuation Procedures (*This booklet is for         SB013   Lifting Machinery – Safe Practices for Forklift
     small business, for the use of the responsible officer                Trucks (Powered)
     only.)                                                        SB017   Statutory Requirements – Accident
     Play it SAFE Working at Height                                        Notifications and Recording

     Workplace Safe Week – Get Involved Kit                        SB018   Abrasive Wheels – Safety in the Use of
                                                                           Portable Disc and Angle Grinders
                                                                   SB022   Safety Procedures for the Loading,
     Rehabilitation and compensation                                       Transporting and Unloading of Logs
     Workers Compensation Insurers Tasmania – List of Main
     Offices (*This information is only available on our Web       SB023   Recommended Procedure for the Modification
     site.)                                                                of Fixed Two-post ROPs
     Workers Rehabilitation and Compensation Act 1988 –            SB024   Occupational Overuse Syndrome (OOS)
     Summary A4 Poster                                             SB027   The Safe Use of Chainsaws
     Workers Rehabilitation and Compensation Act 1988 –            SB028   Working with Lead and Products Containing
     Summary A3 Poster                                                     Lead in Industry
     So You’ve Been Injured at Work, What Happens Now?             SB029   Photocopying Machines
     WorkersRehabilitationandCompensationAct1988–The               SB030   Chemical Safety in the Rural Industry
     Amendments
                                                                   SB031   Tractor Safety
     A Guide to Workers Compensation in Tasmania
                                                                   SB033   Protective Canopies for Excavator-type
                                                                           Machines Used in Forest Operations

72      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Appendix 3 — Publications List

SB034   Skin Cancer and Outdoor Work                     SA032     1/00 – Faulty Engine Lifting Equipment
SB035   Safety in the Shearing Industry                  SA033     2/00 – Mill Worker Suffers Serious Injury after
                                                                   Falling from Ladder
SB037   Eye Injuries
                                                         SA034     3/00 – Kerosene Heater Ignites – Man
SB040   Information for Firewood Cutters
                                                                   Seriously Burnt
SB047   It’s Your Farm, It’s Your Machinery, It’s Your
                                                         SA035     4/00 – Worker Sustains Serious Injuries from
        Responsibility
                                                                   Conveyor Accident
                                                         SA036     5/00 – Tiger Tails on Powerlines
Safety alerts
                                                         SA037     6/00 – Fatal Fireworks Explosion
SA003   3/96 – Chainsaw Use
                                                         SA038     7/00 – Excavator Boom Failure
SA004   4/96 – Forest Worker Receives 3rd Degree
        Burns                                            SA040     9/00 – Machine Roller Safety
SA006   1/97 – Securing of Log Truck Jinkers             SA041     10/00 – Machine Roll Over
SA007   1/97 – Dangers of Working Near Overhead          SA042     1/01 – Mobile Aluminium Prefabricated
        Powerlines                                                 Scaffolds
SA009   5/97 – Metal Working Machines – Drill Presses    SA043     2/01 – Filling LPG Powered Fork Lift Trucks
SA010   6/97 – Falling Object Protective Structure
        (FOPS) Prevents Serious Injury                   Posters
SA011   6/97 – Meat Mincers – An Ongoing Concern –       Eye Protection – Wear It
        1/7/97
                                                         Steel or Skin?
SA012   6/97 – Unsafe Chemical Storage – 4/7/97
                                                         Finger or Fuse?
SA013   8/97 – Fatal Tree Falling Accident
                                                         Timber or Toes?
SA014   9/97 – Crusher Operator’s Arm Caught in
                                                         Farm Safety
        Conveyor
                                                         Manual Handling
SA015   10/97 – Surface Drill Rigs – Protection from
        Rotating Parts                                   SAFE
SA016   1/98 – Fork-lift Falls from Rear of Truck        Injured Hand
SA017   2/98 – Projectiles from Breast Bench Saws        Workplace Safe Week 2001
SA018   4/98 – Portable Drills
SA019   5/98 – Falling Log Crushes Car                   Electrical standards and safety
SA020   6/98 – Asbestos Exposed in Playground Train      Energy Efficiency of Clothes Washers and Dryers

SA021   7/98 – Ladder Safety                             Energy Efficiency of Fridges and Freezers

SA022   10/98 – Inflatable Amusement Structures          Energy Efficiency of Air-Conditioners
SA023   11/98 – Incompatible International Electric      Energy Efficiency of Dishwashers
        Fittings                                         Code of Practice for the Sale of Electrical Installation
SA024   3/98 – Excavators are dangerous                  Products to the Public
SA025   1/99 – Bucket Elevators                          Electrical Licensing in Tasmania
SA026   2/99 – Forklift Crushes Worker                   Electrical Industry Bulletin (quarterly)
SA027   3/99 – Bakery Worker Loses Finger in Bread-      Install Safety Switches
        slicing Machine
                                                         Do It Yourself – Dead on Arrival
SA028   5/99 – Don’t Cut Steel Drums
                                                         Electricity Kills
SA029   6/99 – Worker Receives Serious Electrical
        Burns after Concrete Pumping Accident
SA030   7/99 – Concrete Pump Overturns – Worker
        Breaks Ankle
SA031   4/99 – Woman Scalped in Go-Karting Accident


                                                         Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    73
     Appendix 4 – Telephone Enquiries and Publications Requests



     Information and workers compensation                          Callers were provided with over 169,000 publications.
     branch
                                                                   Activities of the Helpline Section
     Helpline Section                                              •	Over	65,800	telephone	calls	were	received.
     The first contact point for all telephone enquiries to
     Workplace Standards Tasmania is the Helpline Section.         •	Almost	20%	of	calls	related	to	workplace	health	and	
     The Helpline attends to calls received during and outside       safety or workers rehabilitation and compensation.
     working hours. Advice and information are provided
     immediately to stakeholders, and some matters requiring       Matters forwarded outside the Helpline
     further research are directed through the Helpline to         Section for attention
     other parts of the division. The Inspectorate Section of
     the division provides support whenever Helpline               •	953	on	workplace	health	and	safety;
     personnel are on leave or attending training. Telephone,
     facsimile and email are the response methods used to          •	 265	on	workers	rehabilitation	and	compensation;	and
     provide answers to legislative questions and for              •	647	on	other	legislative	matters.
     information about other workplace matters, including
     campaigns.                                                    •	Over	 50%	 of	 matters	 forwarded	 from	 the	 Helpline	
                                                                     Section to other parts of the agency related to
     Over 97% of calls to the Helpline were dealt with               workplace health and safety.
     immediately and did not require further attention.
                                                                   •	Almost	15%	of	matters	forwarded	from	the	Helpline	
     With assistance from the Promotions Section, The                Section related to workers rehabilitation and
     Helpline coordinated the distribution of publications to        compensation.
     Tasmanian businesses and training organisations.
                                                                   •	Over	2,475	requests	for	publications	were	processed.

     Customer service initiatives                                  •	Almost	 500	 emails	 concerning	 workplace	 matters	
                                                                     were received and attended to.
     Over 98% of requests for facsimile responses received
     attention within two hours.


     Publications performance indicators
     Workplace health and safety and workers rehabilitation
     and compensation amounted to over 83% of the
     publications requests.




74      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   75
Financial Statements
     Nominal Insurer



     Terms of reference                                            Mutual General Insurance (in liquidation).

     The Nominal Insurer is an independent statutory body
     under Section 121 of the Workers Rehabilitation and
     Compensation Act 1988. Its main purpose is to ensure
                                                                   In respect to the 1988 Act, eight new claims were lodged
     that the worker is not disadvantaged in circumstances
                                                                   and nine other claims were finalized, leaving 19 claims
     where an employer is not insured, where an employer
                                                                   being managed at 30 June 2001 at a total estimated cost
     cannot be located or has been declared bankrupt, or
                                                                   of $688,000.
     where the employer/insurer has defaulted in payment of
     an accepted claim.                                            On 15 March 2001, the HIH Insurance group was placed
                                                                   into liquidation, which immediately placed over 400
                                                                   claims (with outstanding estimates totalling $49.5
     Membership                                                    million) under management by the Nominal Insurer.
     Section 122 of the Act was amended in 2001 to provide         Amending legislation was passed by Parliament
     for an increase in the Committee of two members               introducing a method of funding the payments of these
     appointed by the Minister.                                    claims by a levy on workers compensation insurance
                                                                   premiums paid by employers.
     The Committee is comprised as follows:
                                                                   The Minister is to determine the amount of the levy
     Mr R Walker       Chairman        representing licensed       before the end of December 2001, and collection will
                                       insurers                    commence on 30 June 2002.
     Mr P Donaldson                    representing licensed
                                       insurers
                                                                   HIH Claims
     Ms H Whitely                      representing licensed
                                       insurers                    It is recommended by the actuarial report that the
                                                                   Nominal Insurer is faced with a liability at 30 June 2001
     Mr S Azzopardi                    representing self-
                                                                   of $49.511 million, or a discounted present value of
                                       insurers
                                                                   $42.97 million. Likewise, with the arrangements in place
     Mr P Mussared                     appointed by the            for the collection or recovery of the liability, the Nominal
                                       Minister                    Insurer also has receivables of the same value at 30 June
                                                                   2001.
     Mr R Lethborg                     appointed by the
                                       Minister                    This has signifigantly changed the main pupose of the
                                                                   Nominal Insurer
     Mr B Aherne       Secretary


     Functions                                                     Income Tax Status
                                                                   The Nominal Insurer is a body established under the Act
     The Nominal Insurer is involved in the management of
                                                                   and is Income Tax exempt.
     claims incurred under the 1927 Act, the 1988 Act and the
     Amendment Act of 2001.
     There are three claims from uninsured employers under
     the 1927 Act totalling $65,000.
     Four claims totalling $55,000 are still outstanding in
     respect to employers insured with National Employers




78      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Independant Audit Report



To the Committee of the Nominal Insurer




Scope


I have audited the financial report of the Nominal Insurer comprising Statements of Financial Performance, Financial
Position, Cash Flows and notes thereto, for the year ended 30 June 2001. The Committee of the Nominal Insurer is
responsible for the financial report. I have conducted an independent audit of the financial report in order to express
an opinion on it to the Committee.


The audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance
whether the financial report is free of material misstatement. My procedures included examination, on test basis, of
evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting
policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether,
in all material respects, the financial report is presented fairly in accordance with Australian Accounting Standards
and other mandatory professional reporting requirements so as to present a view which is consistent with my
understanding of the financial position of the Nominal Insurer, the results of its operations and its cash flows.


The audit opinion expressed in this report has been formed on the above basis.



Audit Opinion

In my opinion the financial report presents fairly in accordance with applicable legislation, Accounting Standards and
other mandatory professional reporting requirements, the financial position of the Nominal Insurer as at 30 June
2001, and the results of its operations and its cash flows for the year then ended.




A J McHugh

AUDITOR-GENERAL


19 November 2001



HOBART




                                                             Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT     79
     The Nominal Insurer Financial Statements
     for the Year Ended 30 June 2001




80    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
The Nominal Insurer Financial Statements
for the Year Ended 30 June 2001




                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   81
     The Nominal Insurer Financial Statements
     for the Year Ended 30 June 2001


     Statement of Financial Position as at 30 June 2001

                                                                             Note               2001              2000

     Current Assets
     Bank Account                                                              9              508,768           391,178
     Receivable                                                             10 (a)        17,111,000            412,820
     HIH Expenses in Advance                                                   7               32,440
                                                                                          17,652,208            803,998
               Financial Statement for the Year Ended 30 June 2001
     Non Current Assets


     Receivable                                                             10 (b)        33,258,000            808,000


     Total Assets                                                                         $50,910,208         $1,611,998
                The accompanying Financial Statements of The Nominal Insurer are drawn up so as to
                give a true and fair view of the results and cash flows for the year ended 30 June 2001 and
     Current Liabilities
                the state of affairs as at 30 June 2001.
                 The accounts have been made out in accordance with Australian Accounting Standards
     Outstanding Claim compliance with the Treasurer’s Statements.
                 and in                                                10 (a)       17,061,000                  361,482
                   Administration & Claim Expenses                                            50,000
     Provision for As at the date of this statement, there are reasonable grounds to believe The Nominal   51,338
                   Insurer will be able to pay its debts as and when they fall due.
                                                                                         17,111,000      412,820
     Non Current Liabilities


     Outstanding Claims                                                     10 (b)        33,258,000            808,000
                                                                                          50,369,000          1,220,820


     Net Assets                                                                            $521,208            $391,178

                          Brian Aherne                                     Robert Walker
     Equity        Secretary Nominal Insurer Committee                                      391,178
                                                                   Chairman Nominal Insurer Committee           628,084
     Retained Surplus for the Year                                                            150,030          -236,906
                                                                                           $541,208            $391,178




82      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
The Nominal Insurer Financial Statements
for the Year Ended 30 June 2001


             Cash Flows for the Year Ended 30 Ended 30
Statement of Financial Performance for the YearJune 2001 June 2001

                                                                     Notes                2001             2000

Cash Flows from Operating Activities
Insurers Contribution                                                   2               498,641          698,250
Claims Recovery                                                         3               245,835            8,195
Insurers Contribution                                                   2              744,476
                                                                                        498,641         706,445
                                                                                                         698,250
       Recovery
Claims Expenses                                                         3
                                                                        4               245,835
                                                                                       -361,482            8,195
                                                                                                        -615,330
Interest Received                                                       5              382,994
                                                                                         16,875          91,115
                                                                                                          19,988
Claims Expenses                                                         4              -361,482         -615,330
Investment Revenue
Administration Expenses                                                 5
                                                                        6                16,875
                                                                                        -49,839           19,988
                                                                                                         -48,009
General Administration Expenses
HIH Expenses                                                            6
                                                                        7               -49,839
                                                                                        -32,440                -
                                                                                                         -48,009
Distribution to Insurers                                                8              350,030
                                                                                       -200,000          63,094
                                                                                                        -300,000


Net Cash Inflow from Operating Activities
Distribution to Insurers                                                8              117,590
                                                                                        200,000        -236,906
                                                                                                         300,000
                                                                                       150,030         -236,906
Net Increase in Cash Held                                                               117,590         -236,906
Retained Surplus at beginning of the financial year                                     391,178          628,084
Retained Surplus at the end of the
Cash at Beginning of the Financial Year financial year                               $541,208
                                                                                       391,178        $391,178
                                                                                                        628,084


Cash at End of the Financial Year                                       9            $508,768         $391,178




                                                         Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   83
     The Nominal Insurer Financial Statements
     for the Year Ended 30 June 2001


     Notes to and forming part of the Financial Statements for the Year Ended 30 June 2001
     The Nominal Insurer is an independent statutory body under Section 121 of the Workers Rehabilitation and
     Compensation Act 1988. Its main purpose is to ensure that the worker is not disadvantaged in circumstances where
     an employer is not insured, where an employer cannot be located or has been declared bankrupt, or where an
     employer/insurer has defaulted in payment of an accepted claim.
     In order to make payment of claims arising under the aforementioned circumstances a fund is established, known as
     the Nominal Insurer Fund.
     The Nominal Insurer operates the following funds:
     1. No 1 Account under sections 16A to 16D of the Workers Compensation Act 1927
     2. The Nominal Insurer No 4 Account 1988 Act established under Section 121 to 131 of the Workers Compensation
        Act 1988
     3. The Nominal Insurer No 5 Account (National Employers’ Mutual) established under Sections 16A to 16D of the
        Workers Compensation Act 1927.
     Summary of Significant Accounting Policies
     1. a) Basis of Accounting
           The financial statements have been prepared in accordance with approved Accounting Standards, Statements
           of Accounting Concepts and other relevant requirements.
        b) Insurers Contributions
           The Nominal Insurer from time to time, and in accordance with Section 128 of the Act, determines contributions
           by Licenced Insurers and Self Insurers to the fund.
        c) Claims
           Claims incurred by the Nominal Insurer arise when proceedings are taken in accordance with Section 126 or
           orders or judgements are made in accordance with Section 127.
           The liabilities for outstanding claims are measured from particulars of claims lodged by claimants and
           assessments carried out by the Nominal Insurer by way of legal advice.
     2. Operating Revenue
           Insurers’ Contributions
           Insurers’ contributions comprise amounts required to be paid by Licensed Insurers and Self-Insurers to meet
           the cost of claims by the claimant.
           The contributions are based upon each individual insurer’s proportion of the total earned premium, plus the
           notional premiums determined by the Workplace Safety Board of Tasmania applying to Self-Insurers in
           accordance with Section 128 (2) of the Act.
             Insurers’ Contributions
                          The Nominal Insurer No 5 Account                              148,921
                          The Nominal Insurer No 4 Account                              349,720
                                                                                        498,641
     3.Claims Recovery
           Claim recoveries are received from employers who have failed to take out a policy of workers compensation
           insurance, or from insurance brokers who, by their negligence, failed to obtain a policy of insurance on behalf
           of the employer/client.
                          The Nominal Insurer No 4 Account                               245,835



84      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
The Nominal Insurer Financial Statements
for the Year Ended 30 June 2001


4. Claims Expenses
     Claims expenses comprise payments of weekly compensation paid to claimants and expenses incurred for
     medical and hospital treatments, rehabilitation fees and legal expenses and all other expenses associated with
     workers compensation claims.
                  The Nominal Insurer No 4 Account                                359,794
                  The Nominal Insurer No 5 Account                                     515
                  The Nominal Insurer No 1 Account                                   1,173
                                                                                  361,482
5. Investment Revenue
     Investment revenue relates to bank interest received.
                  The Nominal Insurer No 4 Account                                   7,401
                  The Nominal Insurer No 5 Account                                   5,300
                  The Nominal Insurer No 1 Account                                   4,174
                                                                                   16,875
6. General Administration Expenses
     General administration expenses involve payment for secretarial services, including on costs for office
     expenses, audit fees and bank charges.
                  The Nominal Insurer No 4 Account
                         Administration Expenses                  39,726
                         Audit Fees                                1,045
                         Bank Charges                                618
                                                                                   41,389
                  The Nominal Insurer No 5 Account
                         Administration Expenses                   6,312
                         Bank Charges                                164
                                                                                     6,476
                  The Nominal Insurer No 1 Account
                         Administration Expenses                   3,377
                         Bank Charges                                  97
                                                                                     3,474
                                                                                   51,339
                  Less GST reimbursed                                                1,500
                                                                                   49,839


                  The Nominal Insurer No 2 and No 3 Accounts have been wound up.




                                                          Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    85
     The Nominal Insurer Financial Statements
     for the Year Ended 30 June 2001


     7. HIH expense in advance refundable in 2002
                                Liquidator’s Meeting Expenses             2,324
                                Legal Opinions                            2,616
                                Actuarial Fees                          27,500
                                                                                         32,440
     8. Distribution to Insurers
          Distribution to Insurers comprises reimbursement of dividends received from the Official Liquidator for No 5
          Account.
          The distribution is made on the proportion contributed by each Licensed Insurer in the initial establishment
          of the fund for No 5 Account and subsequent calls made for funds.
                         The Nominal Insurer No 5 Account                               200,000
     9. Cash at end of the Financial Year
                         The Nominal Insurer No 1 Account                               171,694
                         The Nominal Insurer No 4 Account                               288,637
                         The Nominal Insurer No 5 Account                                48,437
                                                                                        508,768
     10. Outstanding Claims / Receivables
          The liabilitiy for outstanding claims is based on advice from various solicitors who actually handle the claims.
          The amount outstanding is subject to annual review and the value can vary each year.
       a) Claims which are expected to be settled in the 12 months to 30 June 2002:
                         The Nominal Insurer No 1 Account (final)                        65,000
                         The Nominal Insurer No 5 Account (final)                        55,000
                         The Nominal Insurer No 4 Account                               200,000
                         HIH                                                         16,741,000
                                                                                     17,061,000
                         Estimated Administration Expenses                               50,000
                                                                                     17,111,000
       b) Claims expected to be settled beyond 12 months:
                         The Nominal Insurer No 4 Account                               488,000
                         HIH                                                         32,770,000
                                                                                     33,258,000

          As the Nominal Insurer is an independent statutory body established under Section 121 of the Workers
          Rehabilitation and Compensation Act 1988, it is not an insurance company. The Nominal Insurer, therefore,
          does not receive insurance premiums and does not have reinsurance. The ability to pay claims settled is by
          way of contributions received from licensed insurers and self-insurers as and when necessary to call up in
          accordance with Section 128 of the Act. Any surplus will ultimately be refunded to the licensed insurers and
          self-insurers in the proportions in which it was called up.
          The amount of outstanding claims is based upon the assessment by The Nominal Insurer Committee taking
          into account advice from legal advisors. The amount determined is not a fixed claim and in not subject to
          inflation or discounts allowed to bring it to a present day value. There is no need, therefore, to calculate a
          discount rate to discount the amount.

86     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
The Nominal Insurer Financial Statements
for the Year Ended 30 June 2001


11.   Non Current Liabilities: HIH Claims
      It is recommended by the actuarial report that the Nominal Insurer is faced with a liability at 30 June 2001 of
      $49.511 million, or a discounted present value of $42.97 million. Likewise, with the arrangements in place for
      the collection or recovery of the liability, the Nominal Insurer also has receivables of the same value at 30 June
      2001.
12.   Income Tax Status
      The Nominal Insurer is a body established under the Act and is Income Tax exempt.
13.   From July 2001 as prescribed by the Workers Rehabilitation and Compensation Amendment Act 2001.
      The Nominal Insurer consists of:-
  (1)(a)          4 members appointed by the Minister after consultation with Licensed Insurers and Self Insurers
      (b)         One member nominated by the Treasurer and appointed by the Minister and
      (c)         One member appointed by the Minister.
  (2)The Minister is to appoint one of the members referred to in Sub-section (1) (a) as the Chairperson of the
     Nominal Insurer
      Under Sub-section (1) (a) three members represent Licensed Insurers, namely:
            Robert	Walker	   Q.B.E.	Insurance	(Chairperson)
            Peter Donaldson Allianz Australia
            Hilary Barclay   C.G.U. Insurance
      Licensed Insurers are required to contribute to the funds of the Nominal Insurer in respect to the No 1, No 4
      and No 5 Accounts. Therefore the three representatives of Licensed Insurers referred to above contribute to
      these funds in accordance with their percentage share of the total workers compensation premiums.
      Self-Insurers contribute to the funds required for the No 4 Account only based upon the individual percentage
      share of the total notional premiums calculated by the WorkCover Tasmania Board.
      Sonny Azzopardi of the Tasmanian Chamber of Commerce and Industry represents Self-Insurers of the
      Nominal Insurer.




                                                             Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      87
     Independant Audit Report



     To The Members of the Workplace Safety Board of Tasmania




     Scope

     I have audited the financial report of the Workplace Safety Board of Tasmania comprising Operating, Financial
     Position and Cash Flows Statements and notes thereto, for the year ended 30 June 2001. The Members of the Board
     are responsible for the financial report. I have conducted an independent audit of the financial report in order to
     express an opinion on it to the members.


     The audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance
     whether the financial report is free of material misstatement. My procedures included examination, on a test basis,
     of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting
     policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether,
     in all material respects, the financial report is presented fairly in accordance with Australian Accounting Standards
     and other mandatory professional reporting requirements so as to present a view which is consistent with my
     understanding of the financial position of the Board and the results of its operations and cash flows.


     The audit opinion expressed in this report has been formed on the above basis.



     Audit Opinion

     In my opinion the financial report presents fairly in accordance with Accounting Standards and other mandatory
     professional reporting requirements, the financial position of the Workplace Safety Board of Tasmania as at 30 June
     2001, and the results of its operations and cash flows for the year then ended.




     C M Stanton
     DIRECTOR – FINANCIAL AUDITS
     DELEGATE OF THE AUDITOR-GENERAL

     7 November 2001


     HOBART




88      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania
Workers Rehabilitation and Compensation Fund
Financial Statements for the Year ended 30 June 2001

Statement of Financial Performance for the Year ended 30 June 2001

                                                                     Note          1999-00            2000-01
                                                                                     $’000              $’000

Revenue from ordinary activities
 Contributions                                                    2(a) & (b)           3,191            3,206
 Interest on trust account                                                                58               47
 Gross proceeds from the disposal of assets                             4                114               ....
 Other revenue                                                        2(c)               167               99
Total revenue from ordinary activities                                                3,530            3,352



Expenses from ordinary activities (excluding borrowing costs)
 Employee entitlements                                        3(a)                     1,459            1,598
 Advertising and promotion                                            3(b)               929              669
 Communications                                                                           74               96
 Consultancies                                                        3(c)               263              145
 Depreciation                                                      1(e) & 8               42               28
 Information technology                                                                   61               43
 Property services                                                                        91              111
 Travel and transport                                                                     89              105
 Written down value of disposed assets                                  4                 81               ....
 Other operating expenses                                             3(d)               441              557
Total expenses from ordinary activities (excluding borrowing costs)                   3,530            3,352


Net operating surplus (deficit) from ordinary activities                                  ....             ....

Notes 1-13 form an integral part of these accounts.




                                                      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    89
     Workplace Safety Board of Tasmania
     Workers Rehabilitation and Compensation Fund
     Financial Statements for the Year ended 30 June 2001

     Statement of Financial Position as at 30 June 2001

                                                                     Note      1999-00    2000-01
                                                                     $’000       $’000

     Current assets
      Treasury Trust Account                                       6 & 11(a)      721        777
      Receivables and prepayments                                     7           161          7
     Total current assets                                                         888       896



     Non-Current assets
      Property, plant and equipment                                   8            97         75
     Total non-current assets                                                      97        75
     Total assets                                                                 985       971



     Current liabilities
      Creditors and accrued expenses                                  9           556        408
      Employee entitlements                                           10          288        314
     Total current liabilities                                                    844       834



     Non-current liabilities
      Employee entitlements                                           10          141        137

     Total non-current liabilities                                                141       137
     Total liabilities                                                            985       971
     Net assets (liabilities)                                        2(b)          ....      ....


     Notes 1-13 form an integral part of these accounts.




90      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania
Workers Rehabilitation and Compensation Fund
Financial Statements for the Year ended 30 June 2001

Statement of Cash Flows for the Year Ended 30 June 2001

                                                                    Note          1999-00            2000-01
                                                                                    $’000              $’000

Cash flows from operating activities
Cash inflows
 Industry contributions                                                               2,933            3,209
 Interest                                                                                ....            105
 Other cash receipts                                                                     82              173
Total cash inflows                                                                   3,015            3,487



Cash outflows
 Employee entitlements                                                                1,450            1,577
 Other cash payments                                                                  1,796            1,854
Total cash outflows                                                                  3,246            3,431


Net cash from (used by) operating activities                        11(b)            (231)                56



Cash flows from investing activities
Cash inflows
 Gross proceeds from the disposal of assets                                             114               ....
Total cash inflows                                                                     114                ....



Cash outflows
 Payments for acquisition of assets                                                      40                 6
Total cash outflows                                                                      40                 6


Net cash from (used by) investing activities                                             74              (6)


Net increase (decrease) in cash held                                                  (157)               50
Cash at the beginning of the reporting period                                           884              727
Cash at the end of the reporting period                          6 & 11(a)             727               777


Notes 1-13 form an integral part of these accounts




                                                     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    91
     Workplace Safety Board of Tasmania
     Workers Rehabilitation and Compensation Fund
     Financial Statements for the Year ended 30 June 2001

     1. Summary of Significant Accounting Policies

     (a)     Basis of Accounting
     The Workplace Safety Board of Tasmania is a body corporate, established by the Workers Rehabilitation and
     Compensation Act 1988. The financial statements have been prepared on an accrual accounting basis in accordance
     with applicable Australian Accounting Standards and all relevant legislation.
     The financial statements have been prepared using historical cost accounting, with the exception that non-current
     physical assets, are valued at their current value to the Board, determined by reference to the asset’s deprival value.
     Assets and liabilities are recognised in the Board’s Statement of Financial Position when it is probable that future
     economic benefits will flow and the amounts of the assets or liabilities can be reliably measured.
     Revenues and expenses are recognised in the Board’s Statement of Financial Performance when the flow or
     consumption or loss of economic benefits has occurred and can be reliably measured.

     (b)     Operations of the Board
     The role of Workplace Safety Board is to oversee, promote, review, and ensure the efficient operation of (so far as is
     practicable) workers rehabilitation and compensation procedures in accordance with the Workers Rehabilitation and
     Compensation Act 1988. Integral to this role is advising the Minister on matters relating to workers rehabilitation and
     compensation in this State. Other major functions within this role include reviewing the performance of licensed
     insurers and self-insurers and the operation of the Nominal Insurer, and managing the Workers Rehabilitation and
     Compensation Fund. A more comprehensive explanation of the Board’s activities is contained in the body of the
     Annual Report.

     (c)     Statutory Matters
     The Department of Infrastructure, Energy and Resources was established under the Administrative Arrangements Order
     (No.2) 1998 and assumed overall administrative responsibility for the Workplace Safety Board of Tasmania. The
     Workers Rehabilitation and Compensation Tribunal which is part of the Workplace Safety Board was transferred to
     the Department of Justice and Industrial Relations although it continues to come under the overall operations of the
     Board.
     By virtue of Section 15 (1) of the Workers Rehabilitation and Compensation Act 1988 the Board is required to report
     to the Minister for Infrastructure, Energy and Resources on its operations.

     (d)     Valuation of Non-Current Assets
     Valuation of assets is based on the deprival value of assets in accordance with the Department of Treasury and
     Finance publication “Guidelines for the Recording, Valuation and Reporting of Non-Current Physical Assets in
     Tasmanian Government Departments”. In accordance with Treasurer’s Instructions the asset capitalisation threshold
     adopted by the Board is $5,000. Assets valued at less than $5,000 are charged to the operating statement in the year
     of purchase.

     (e)       Depreciation on Non-Current Assets
     All non-current assets having a limited useful life are systematically depreciated over their useful lives in a manner
     that reflects the consumption of their service potential. Depreciation on assets is provided for on a straight-line basis
     using the rates as detailed in note 8(b).




92      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania
Workers Rehabilitation and Compensation Fund
Financial Statements for the Year ended 30 June 2001

(f)    Provision for Employee Entitlements
Employee entitlements include entitlements to wages and salaries, annual leave, sick leave, long service leave and
superannuation benefits.
Liabilities for wages and salaries and annual leave are recognised, and are measured as the amount unpaid at the
reporting date at current pay rates in respect of employees’ services up to that date. The liability for sick leave is not
material and has not been recognised.
A liability for long service leave is recognised, and is measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date. Consideration is given, when
assessing expected future payments, to expected future wage and salary levels plus on costs, experience of employee
departures and periods of service. On-costs include payroll tax and employer superannuation contributions and
exclude workers’ compensation premiums and fringe benefits tax. Expected future payments are discounted using
interest rates attaching, as at the reporting date, to Commonwealth Government guaranteed securities with terms to
maturity that match, as closely as possible, the estimated future cash outflows. The Board uses reliable estimations
based on the process outlined above to determine its Long Service Leave Provision.

(g)      Superannuation
No superannuation liability is recognised for the accruing superannuation benefits of Board employees. This liability
is held centrally and recognised within the Finance-General Division of the Department of Treasury and Finance.
During the reporting period, the Board paid 11 percent of salary in respect of contributory members of the Retirement
Benefits Fund into the Superannuation Provision Account within the Special Deposits and Trust Fund. The Department
paid the appropriate Superannuation Guarantee Charge into the nominated superannuation fund in respect of
non-contributors. Under these arrangements the Board has no further superannuation liability for the past service of
its employees.

(h)    Comparative Figures
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current
year.

(i)     Rounding
All amounts in the financial statements have been rounded to the nearest thousand dollars unless otherwise stated.

(j)       Tax Status
The Board is exempt from all forms of taxation except fringe benefits tax, payroll tax and the goods and services tax.
The Board’s obligations for the goods and services tax are included in grouping arrangements with the Department
of Infrastructure, Energy and Resources. Accordingly, no payments or receipts of goods and services tax are recorded
directly against the Board’s operations.




                                                               Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      93
     Workplace Safety Board of Tasmania
     Workers Rehabilitation and Compensation Fund
     Financial Statements for the Year ended 30 June 2001

     2. Revenue from Ordinary Activities

     (a)      Funding of the Board’s Operations
     As soon as it is practicable in respect of each financial year, the Board is obliged to estimate the amount of money
     required for the payment or discharge of expenses, charges and obligations of the Board and to estimate the amounts
     to be received by the Board. A recommendation is then made to the Minister for Infrastructure, Energy and Resources
     of the rate to be levied on the premiums of licensed insurers and the notional premiums of self-insurers.
     An advance contribution or levy payable by insurers is determined by calculating the percentage that the budget of
     the Board bears to the Total Premium Income Pool and applying this percentage to the premium of each insurer. The
     amounts used for the Total Premium Income Pool and the premium of each insurer refer to the immediately preceding
     financial year.
     Subsequent to the end of the financial year, and once the expenses of the Board and the actual premiums of licensed
     insurers and the notional premiums of self insurers are known, a final apportionment of the Board’s expenses for the
     year is made.

     (b)     2000-01 Contributions Determination
     Income for the financial year ending 30 June 2001 includes the final determination, under the terms of the Workers
     Rehabilitation and Compensation Act 1988, of contributions from Licensed Insurers and Self-Insurers for 1999-00.
     As detailed in 2(a) the Workplace Safety Board is funded by contributions from licensed insurers and self-insurers with
     the contributions based on an estimate of the amount of money required for the payment or discharge of expenses,
     charges and obligations of the Board. Therefore, the Board does not accumulate surpluses with the necessary accrual
     adjustment made to contributions revenue to reflect this.

     (c)     Other Revenue
     The majority of revenue in this items reflects recoveries of consultancies expenditure relating to the audit of self
     insurers and insurers. See also note 3(c) for further details.


     3. Expenses From Ordinary Activities

     (a)     Employee Entitlements
     The increase in employee entitlements was a result of:
     •	two	additional	staff	were	appointed	within	the	Promotions	area	in	2000-2001;	and
     •	the	full	year	effect	of	the	appointment	of	a	full	time	Commissioner	to	the	Tribunal	towards	the	end	of	1999-2000.	

     (b)     Advertising and Promotion
     A planning phase occurred in the Workplace Safe advertising campaign in 2000-01. During this period, a reduction
     occurred in advertising/promotions while research was undertaken into the next phase of the campaign.




94      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania
Workers Rehabilitation and Compensation Fund
Financial Statements for the Year ended 30 June 2001

(c)     Consultancies
The majority of expenditure for consultants relates to the audit of self insurers and licensed insurers. The Board incurs
this expenditure and then seeks reimbursement for the audited insurers. The effect is cost neutral once all invoices
have been paid. The revenue recovery is shown in “Other Revenue’. The timing of the audit process meant reduced
audit costs and associated recoveries for 2000-01.

(d)     Other Operating Expenses
The decrease in advertising costs was partially offset by an increase in expenditure under this item. In particular, the
increase reflects the fact that publications were revamped and restocked during 2000-01.
The Board recognises administrative costs charged by the Department of Infrastructure, Energy and Resources
against “Other Operating Expenses”.


4. Net Profit/(Loss) from Disposal of Assets
During 2000-01 the following assets were disposed of:
                                                        1999-00                           2000-01
Description        Sale Price        Written           Net Profit       Sale Price        Written           Net Profit
                                    Down Value           (Loss)                          Down Value          (Loss)

                      $’000             $’000            $’000             $’000             $’000             $’000
Motor Vehicles         114               81                33                ….                ….                ….
                       114               81                33                ….                ….                ….

During 1999-00 six vehicles were disposed of. Proceeds of the vehicle sales were used to fund the purchase of two
replacement vehicles and the on-going costs associated with the lease costs of a further three vehicles. Overall, the
Board’s vehicles fleet was reduced by one vehicle.


5. Accumulated Surpluses
As detailed in note 2(b), the Board does not accumulate any surpluses.


6. Treasury Trust Account
The Board processes all transactions through a Treasury Trust Account entitled T435 Workers’ Rehabilitation and
Compensation Act 1988 Fund Account. The transactions of the Workers Rehabilitation and Compensation Tribunal
which are processed through the Department of Justice’s Operating Account are reimbursed on a monthly basis out
of the T435 Account. The cash balance as at 30 June 2001 is represented by:
                                                                                           1999-00          2000-01
                                                                                             $’000            $’000
                     Treasury Trust Account T435                                                 740              839
                     Tribunal reimbursement deficit at 30 June                                  (13)             (62)
                     Total                                                                       727              777




                                                              Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT      95
     Workplace Safety Board of Tasmania
     Workers Rehabilitation and Compensation Fund
     Financial Statements for the Year ended 30 June 2001

     7. Receivables And Prepayments
                                                                                 1999-00   2000-01
                                                                                   $’000     $’000
                         Receivables                                                 153         7
                         Prepayments                                                   8       ….
                         Total                                                      161         7


     8. Non-Current Assets
                         (a) Items
                                                                                 1999-00   2000-01
                                                                                   $’000     $’000
                         Office Equipment at Cost                                     57        57
                         Accumulated Depreciation                                   (12)      (20)
                                                                                      45        37


                         Computer Equipment at Cost                                   19        25
                         Accumulated Depreciation                                   (10)      (17)
                                                                                       9         8


                         Motor Vehicles at Cost                                       41        41
                         Accumulated Depreciation                                    (3)      (11)
                                                                                      38        30


                         Leasehold Improvements at Cost                               43        43
                         Accumulated Depreciation                                   (38)      (43)
                                                                                       5       ….


                         Total Non-Current Assets                                    97        75


                         (b) Depreciation Allocated and Useful Lives
                                                                  Useful Lives   (years)   1999-00
                                                                         $’000   2000-01     $’000
                         Office Equipment                                  10          9         8
                         Computer Equipment                                 3          6         7
                         Motor Vehicles                                     5         20         8
                         Leasehold Improvements                             6          7         5
                         Total Depreciation                                          42        28



96     Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania
Workers Rehabilitation and Compensation Fund
Financial Statements for the Year ended 30 June 2001

9. Creditors and Accrued Expenses
                                                                                 1999-00          2000-01
                                                                                   $’000            $’000
             Creditors and accrued expenses                                            175               24
             Accrual refund for contributions                                          381              384
             Total                                                                     556              408

10.Employee Entitlements
                                                                                 1999-00          2000-01
                                                                                   $’000            $’000
             Accrued Salaries                                                           38               43
             Provision for Annual Leave                                                146              117
             Provision for Long Service Leave                                          245              291
             Total                                                                     429              451

             Classified as:
             Current                                                                   288              314
             Non-current                                                               141              137
                                                                                      429               451

11. Cash Flows
             (a)     Reconciliation of Cash per Statement of Financial Position to Statement of
                     Cash Flows
                                                                        1999-00       2000-01
                                                                          $’000         $’000
             Cash at year end per Statement of Cash Flows                              727              777
             Statement of Financial Position Cash                                      727              777

             (b) Reconciliation of Operating Surplus/(Deficit) to Net Cash used in
                 Operating Activities
                                                                     1999-00       2000-01
                                                                       $’000         $’000

             Net operating surplus / (deficit)                                          ….               ….
             Depreciation                                                               42               28
             (Increase)/decrease in receivables and prepayments                      (151)              154
             Increase/(decrease) in refunds to contributors accrual                  (258)                 3
             Increase/(decrease) in creditors and accrued expenses                     157            (151)
             Increase/(decrease) in employee entitlements                               12               22
             Net (profit)/loss on sale of assets                                      (33)               ….
             Net cash flows from operating activities                               (231)                56

             (b) Credit Arrangements
             The Workplace Safety Board does not have any credit stand-by arrangements or loan facilities.

                                                    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT   97
     Workplace Safety Board of Tasmania
     Workers Rehabilitation and Compensation Fund
     Financial Statements for the Year ended 30 June 2001

     12.Additional Financial Instruments Disclosures

     (a)     Interest Rate Risk Exposures
     The interest rate applicable on Treasury trust account balances was an average of 4.75% for the year ended 30 June
     2001. Exposure to interest rate and credit risks is considered to be minimal.

     (b)      Credit Risk Exposures
     Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
     The credit risk on financial assets, excluding investments, of the Workplace Safety Board which have been recognised
     on the balance sheet, is the carrying amount, net of any provision for doubtful debts.
     The Workplace Safety Board extends 30 day credit terms for sundry receivables, and receives standard commercial
     credit terms for sundry creditors.
     The Workplace Safety Board is not materially exposed to any individual overseas country or individual customer.

     (c)     Net Fair Values of Financial Assets and Liabilities
     The carrying amount of Treasury trust account balances, receivables and prepayments, creditors and provisions for
     employees’ entitlements approximates the net fair value because of the short term to maturity.




98      Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT
Workplace Safety Board of Tasmania
Workers Rehabilitation and Compensation Fund
Financial Statements for the Year ended 30 June 2001

13.Operating Lease Commitments
                                                                                        1999-00          2000-01
                                                                                          $’000            $’000
                    Minimum Lease Payment                                                     122              126
                    Contingent Rentals                                                         …                …
                    Sub-Lease Rental Expenses                                                  …                …
                                                                                             122               126


                                                                                        1999-00          2000-01
                                                                                          $’000            $’000
                    Total Lease Commitments                                                   138              138
                                                                                              138              138


Future lease payments, rentals and commitments not provided in these statements include:
                                                                                        1999-00          1998-99
                                                                                          $’000            $’000
                    Not later than 1 year                                                     122              126
                    Later than 1 year and not later than 5 years                               16               12
                    Later than 5 years                                                         …                …
                                                                                              138              138


The Workplace Safety Board leases are represented by land and building rental costs and vehicle and office equipment
lease costs.
Contingent rental costs relate to a land and building lease, and in the main comprise local government charges and
the periodic escalation of leases by the Consumer Price Index. The total lease payment excludes local government
and other executory costs where they are paid directly to a party other than the lessor. These costs are included
elsewhere in the Board’s expenditures.
Since contingent rentals cannot be reliably determined, they have been excluded in the calculations of Total Lease
Commitments. There is no difference between the value of minimum lease payments and the value of Total Lease
Commitments.
The Board does not have any purchase rights flowing from the lease of the land and building.
The minimum lease payment for vehicles is based on a standard lease period of 24 months.




                                                           Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT    99
      Workplace Safety Board of Tasmania
      Workers Rehabilitation and Compensation Fund
      Financial Statements for the Year ended 30 June 2001




                  Certification of Financial Statements
                  The accompanying financial statements of the Workplace Safety Board are in agreement
                  with the relevant accounts and records and have been prepared in compliance with
                  Treasurer’s Instructions issued under the provisions of the Financial Management and
                  Audit Act 1990 to present fairly the financial transactions for the year ended 30 June 2001
                  and the financial position as at end of the year.
                  At the date of signing, I am not aware of any circumstances which would render the
                  particulars included in the financial statements misleading or inaccurate.
                  Dated this 31st day of October 2001




                  Jim McAlpine
                  (CHAIRMAN)




100    Workplace Safety Board of Tasmania 2000–01 ANNUAL REPORT

				
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