Victorian employers will save almost $40 million following a cut in WorkCover premiums starting next month.
The average premium will be cut by two per cent from July and businesses which pay their annual premiums by August 1 will get an extra five per cent discount.
Premier Denis Napthine says the reduction will build on a three per cent cut already delivered in 2012.
He said the cut would not be funded by reducing support for injured workers or programs ensuring workplaces are safe.
"This is through good financial management through WorkCover and most of it's through reductions in the level of injuries in our workplaces," he told reporters on Wednesday.
But the Community and Public Sector Union (CPSU) says injured workers being denied payments are actually paying for the employer reductions.
"WorkCover is forcing injured workers onto federal payments to survive - just cost shifting between state and federal jurisdictions," spokesman Geoff Lewin said.
The May state budget extracted more than $600 million in dividends from WorkCover over the next four years but there was nothing for injured workers, he said.
Victorian Employers' Chamber of Commerce and Industry chief executive Mark Stone says the premium cut is a win for almost 116,000 employers and would lower the cost of doing business.
"The measure rewards Victorian industry for its efforts to create and manage safer workplaces," he said.
The CPSU says WorkCover disputes about weekly payments, medical and similar disputes affecting injured workers have risen in Victoria by more than 50 per cent since December 2012.
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