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Callum Godde

'Stubborn': Labor, Libs dig in on work compo reforms

Jacinta Allan has warned WorkCover premiums for businesses could rise if legislation fails to pass. (Joel Carrett/AAP PHOTOS)

A blame game has erupted over an impasse on reforms to Victoria's broken workers compensation scheme.

The Victorian coalition this month joined the Greens in voting to oppose controversial WorkCover legislation in its current form.

Premier Jacinta Allan was adamant the government would have no choice but to raise WorkCover premiums for businesses if the bill doesn't pass.

"Let's not have this issue hanging over the head of businesses as we go into the Christmas period," she told reporters on Tuesday as parliament returned for its final sitting week of the year.

WorkSafe minister Danny Pearson said the average premium would likely have to be hiked from 1.8 per cent to between 2.4 and 2.5 per cent, the highest rate of any Australian state. 

"This is unacceptable," he said.

Without opposition or Greens support, Labor must convince at least six of the eight remaining crossbenchers for the bill to pass the upper house.

While he hasn't given up hope of gaining enough of the crossbench support, Mr Pearson suggested the ball was in Opposition Leader John Pesutto's court.

The opposition wants the bill referred to an upper house committee for a short and sharp inquiry, which they say could report back in early 2024 before the reforms are due to take effect in late March.

Mr Pesutto showed no sign of budging in his stance, doubling down on his claim that the legislation is flawed and half-baked.

"We need a broader set of solutions and that's achievable," he said.

"This is all doable if the government just stops being stubborn about it."

Greens treasury spokesman Sam Hibbins said his party supported the coalition's inquiry push and would not entertain the government's "games".

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said businesses cannot be a pawn in the debate, declaring another premium rise would cost some traders thousands of extra dollars a year.

"It's a cost that they can't bear," he said.

The Victorian Trades Hall Council and Victorian branch of the Community and Public Sector Union have also expressed concerns about the legislation watering down eligibility for mental health-related claims. 

VTHC secretary Luke Hilakari said it was the wrong approach and urged the government to amend the bill.

"At this moment, only the Labor Party are supporting it and that should tell you something," he said.

Under the legislation, workers suffering stress and burnout would no longer be able to access weekly WorkCover benefits.

They would instead be eligible for 13 weeks of provisional payments to cover medical treatment, along with access to enhanced psychosocial support services.

Workers receiving payments beyond two-and-a-half years would also have to undergo another impairment and capacity test to determine if they are still eligible.

WorkCover's claims liability has tripled in Victoria since 2010, mainly due to the increased cost of weekly income support.

Many workers are staying on the scheme longer, with mental injury accounting for 16 per cent of new claims.

Taxpayers have topped up the WorkCover scheme with an extra $1.2 billion to offset rising costs over the previous three financial years.

The average premium for businesses was lifted from 1.27 per cent to 1.8 per cent in July after the government declared the scheme was broken and in need of an overhaul.

Mr Pearson flagged the upper house could sit late into Thursday night or even Friday, a non-sitting day, to pass the bill if necessary.

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