A Federal Government taskforce on preventative health has recommended the introduction of a levy under which employers would be required to commit a “small percentage” of annual payroll to fund workplace health programs.
The idea, contained in the taskforce’s final report, is just one of 35 recommendations and 139 sub-recommendations aimed at cutting obesity, and alcohol and tobacco abuse, which the Government claims costs the economy over $31 billion.
The report argues that improving workplace health is a key part of national preventative health strategy, as work is the place where around 11 million Australians spend half their waking ours.
“Approximately five million Australian employees are overweight (of whom 1.3 million are obese). In 2001, obesity was associated with an excess 4.25 million days lost from the workplace. Obesity rates are highest among mature age workers aged 45 to 64, who comprise almost a third of the labour force. As obese people age, sick leave increases at twice the rate of those who are not obese,” the report states.
The taskforce also argues that improved health of staff will benefit a business, through decreased illness/absence; reduction in rate of early retirement due to ill health; improved productivity; reduction in occupational injury and workers compensation claims; and improved attraction and retention of staff and reduced turnover.
“A large number of studies now point to the economic return on investment that can accrue through investments in employee health programs, with the average rate of return estimated at between 2:1 and 5:1.”
But the big question is: Who will pay for the preventative workplace health measures?
The taskforce recommends legislative change to accelerate the take-up of workplace health programs.
One suggestions is to provide tax incentives (through fringe benefits tax or income tax) to encourage the implementation of such programs.
The other idea is the introduction of a levy under which employers would commit a small percentage of annual payroll to workplace health programs. The taskforce says this could be similar to the Training Guarantee Levy, a scheme introduced by the Hawke Government in 1990, requiring companies to set aside 1.5% of annual payroll to fund employee training. This scheme was scrapped in 1994.
The taskforce says the Government should also investigate the feasibility of rewarding employers through grants or tax incentives when they achieve and sustain certain health benchmarks in their workforce.
Chief executive of the Council of Small Business of Australia, Jaye Radisich, supports the idea of encouraging healthier workplaces but says businesses should not be made to pay for these measures.
“To put the burden of fixing community health onto business is not appropriate, because it’s a community issue.”
She also points out that one of the reasons that the Training Guarantee Levy was scrapped was because of allegations of rorting, where employers would simply use the money allocated to go out and have fun with their staff, rather than getting actual training.
“Ironically, this proposal would actually encourage that,” Radisich says,
She is more comfortable with the idea of tax incentives to fund these measures, providing the reporting and record-keeping required was contained within the existing tax system.
“If it’s an entirely new system that requires new reporting systems then that’s problematic.”
Radisich is also wary of plans to increase the prices of tobacco and alcohol. She argues large supermarket chains will be able to absorb price increases far more easily than small businesses.
“The burden then gets put on small business. The local deli is going to have to put its prices up even further than Coles and Woolworths.”
Would you be prepared to pay for workplace health measures for your staff or should individuals have to take responsibility? Comment below.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
