Reflections on experience rating: An Australian perspective

Kevin Purse, Central Queensland University, Rockhampton, Australia

Abstract

Overview: Experience rating programs have become an increasingly prominent feature of workers’ compensation policy in Australia during recent decades. This presentation focuses on the rise and fall of one such program—the South Australian Bonus and Penalty Scheme (BPS), which was the state’s flagship experience rating program from 1990 to 2010. The main arguments for and against experience rating are reviewed, and the basic design features of the BPS and its subsequent operation over the 20 years—from its introduction to its demise—are outlined. The principal finding from the BPS experiment was its failure to deliver on promised improvements in workplace health and safety outcomes.

Conclusion: A number of lessons learned from the South Australian experience may be of interest to an international audience. One crucial consideration is how this experience rating program was able to survive for so long, given its inability to achieve systemic reductions in work-related injury. Another concerns the value of research findings in this complex but contested policy area. A third, and more fundamental, consideration is whether experience rating can be reformed or, alternatively, scrapped altogether.

Reference: Purse A. Experience rating: an Australian post mortem. Policy and Practice in Health and Safety, 2012; 10(1):45-61.

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