Page: 1834
Mr DARYL MAGUIRE (Wagga Wagga) [6.07 p.m.]: I raise concerns on behalf of Mr Peter Anderson, the Chief Executive Officer of Group Training and Employment Services [GTES]. The Riverina Group Training and Employment Limited is a not-for-profit entity that was established in 1985 to provide services within the group training scheme. Since then it has successfully assisted in the completion of over 3,000 apprentices and trainees. Today it employs approximately 250 apprentices and trainees and 11 internal staff and provides Australian apprentices to more than 120 businesses, predominantly in the Wagga Wagga city areas. Training at GTES is primarily focused on the promotion of traditional trades and the furthering of qualified tradespeople in this sector.
In its capacity as a franchisee for MAS National GTES is now also employing two staff members, providing Australian apprentice support services for the Federal Government. In short, GTES is ensuring that many apprentices are getting their qualifications by employing and placing them with businesses that might not otherwise be able to provide those opportunities. On many occasions those businesses are able to retain apprentices in employment when otherwise they may have become unemployed due to personal circumstances. The efforts and services that they are providing to the community are now placed in jeopardy as a result of the escalating cost of workers compensation insurance.
Recently GTES received its actual premium for 2005-06, which required an additional payment of $11,167.38, taking the total premium for the year to $347,238.38. Concurrently GTES received its premium estimate for 2007, which requires it to pay $339,320.75. The premium has risen 51 per cent in three years. In that same period its actual wages paid have risen only 7 per cent. In 2003-04 its actual wages were $5,078,169. The actual premium, including GST, was $211,941.16, with the net cost of claims incurred totalling $49,650.46.
In 2003-04 actual wages were $5,078,169. The actual premium, including GST, was $211,941.16, with the net cost of claims incurred totalling $49,650.46. In 2004-05 actual wages were $5,749, 083. The actual premium, including GST, was $293,775.10, with a net cost of claims incurred totalling $176,658.38. In 2005-05 actual wages were $5,467,000.33. The actual premium, including GST was $347,238.36, with the net cost of claims incurred totalling $20,056.55. As previously mentioned, the estimated premium for this financial year is $399,320.75, yet GTES employee numbers are static and less than in 2004-05.
Last year GTES had minimal claims. I understand that the premium is calculated on the claims history and, as such, takes in the cost of claims for 2004-05. The Government claims that premiums should be reduced by around 20 per cent following its review of the calculation methodology. Given this, GTES is at a loss to understand the incredible increase in premiums when the cost mentioned is for only one claim. The increase in premium for 2004-05 resulted in the company posting a loss for the year. Unfortunately, 2005-06 will provide a similar result to the company, as its premium estimate for this year is almost $400,000. That being the case, the future viability of the company might be jeopardised by the unfair nature of this scheme.
Mr Anderson pointed to the Victorian workers compensation system that exempts apprentices from workers compensation premiums. He said the Victorians obviously recognise the importance of keeping the cost of employing apprentices to a minimum. I met with Mr Anderson and he relayed to me his concerns. He informed me that four group training companies have gone to the wall and all of them have pointed to the outrageous increases in workers compensation insurance. I made representations to the Minister responsible for this portfolio. I urge him to address this specific issue. Apprentices cannot be thrown on the scrapheap because of a company's inability to afford these outrageous premiums.