In 1992, Victoria had the worst workers’ compensation record in Australia. Its government-run scheme, WorkCare, had achieved very little in the reduction of workplace injuries, the number of reported claims was growing each year and the length of time workers were off work, on benefits, was leading the scheme to bancruptcy.
In a state of approximately 4.5 million people, WorkCare had a deficit of $2.1 billion the second highest average premium rate of 3% of payroll and 16,000 long term claimants - ie. claimants who had been receiving benefits for at least a year - many of whom had been receiving benefits for the whole 7 years of WorkCare.
Under WorkCare, Victoria seemed to have developed a type of ‘compensation’ culture. There was little incentive for employers to provide safe workplaces. Nor was there much incentive for workers to return to work, even after injuries that were relatively minor. Compensation was looked upon not just as a ‘right’ but almost as a ‘reward’ for injury