More than 100 taxpayer funded Victorian Government agencies are facing premium hikes as the true depth of Labor's mismanagement of the Victorian Managed Insurance Authority (VMIA) is revealed.
A series of briefs provided to Assistant Treasurer, Danny Pearson, across 2023 and obtained by the Victorian Opposition underFreedom of Information have confirmed:
- The VMIA is actively considering increasing insurance premiums on government agencies in the upcoming financial year.
- The VMIA faces the possibility its Insurance Funding Ratio (IFR) will fall below 100 – putting at risk the VMIA's ability to meet financial obligations from existing revenue.
- In September 2022, the VMIA requested the suspension of a budgeted $50 million dividend to the state due to financial pressure from the IFR falling rapidly.
- A taxpayer funded bailout was proposed to improve the VMIA's financial position.
- The VMIA is projected to remain hundreds of millions of dollars in negative equity each year between 2023-24 and 2027-28.
- The VMIA experienced an 8 per cent increase in expenses across 2023-24, due in part to the impact of Labor's WorkCover premium hikes and payroll tax increase.
- The collapse of Porter Davis Homes resulted in a 5 per cent decrease in the VMIA's IFR alone.
Furthermore, the briefs warn that government departments would likely seek additional funding if premiums were materially increased in 2024-25 through the current budget process.
The increased pressure on the budget bottom line comes as Victoria's net debt under Labor has risen from $21.8 billion to a projected $177.8 billion by mid-2027.
Shadow Minister for Finance, Jess Wilson, said: "These documents show that under Labor, the state's public insurer faces the very real prospect of being unable to meet its financial obligations in a sustainable way.
"Whether through a taxpayer funded bailout, cuts to insurance coverage or even further premium hikes, Victorian taxpayers will ultimately pay the price of Labor's financial mismanagement of the VMIA.
"The Allan Labor Government must explain how much they will hike premiums on government agencies in the upcoming State Budget and how much this will add to Victoria's record debt. Labor cannot manage money and Victorians are paying the price."
