Attorney-General's Department, $97,446,000

Administered Items for the Attorney-General's Department, $125,951,000

Department of the Premier and Cabinet, $91,807,000

Administered Items for the Department of the Premier and Cabinet, $2,079,000

Department of Treasury and Finance, $49,379,000

Administered Items for the Department of Treasury and Finance, $1,392,192,000

Membership:

Mr Marshall substituted for Ms Chapman.

Mr Williams substituted for Mr Griffiths.

Hon. I.F. Evans substituted for Ms Sanderson.

Minister:

Hon. J.R. Rau, Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Housing and Urban Development, Minister for Industrial Relations.

Departmental Adviser:

Mr G. McCarthy, Chief Executive Officer, WorkCover.

The CHAIR: I declare the proposed payments open for examination. Everyone is familiar with our opening remarks but we are going to ask the minister if he wants to make an opening statement and then we will go to the lead speaker. Could I have an indication from this side if there are any questions. No, so you will have the floor after the minister's statement. We will be going from 5.15 to 6.15 for the Minister for Industrial Relations covering WorkCover and then 6.15 to 7.15 through SafeWork SA, Employee Ombudsman Services, Conciliation and Arbitration, Government Publishing, State Records, which is an abbreviated form of this. Is everyone happy with that schedule? I am looking on this side: is everyone okay?

An honourable member interjecting:

The CHAIR: Well, that is jolly but we are making sure that everyone is happy with that. We have no eye contact so we are going to go ahead with the minister's opening statement.

The Hon. J.R. RAU: I will be very brief. I would like to introduce Mr Greg McCarthy, who is the Chief Executive Officer of WorkCover. I would like to place on the record my sincere appreciation of his great work since he has taken up the role and the work of his management team, in particular. They have been a very industrious and progressive group of people to work with. I would like to say that the dramatic improvement in the WorkCover scheme was entirely due to my being made minister in about February of last year, but that would not be true.

It is fair to say that a large amount of what has been done to improve the scheme and the performance of the scheme can be directly attributed to Greg and his team, and I congratulate all of them on their really good work. We can possibly go into a bit more detail about that shortly. As I have said in this place and other places many times before, no matter how good Greg and his team are they can only get out of the current scheme what the current scheme is capable of delivering.

Whilst the work they have done is terrific and it is improving the performance of the scheme, nothing has changed from statements that have been made by me and others for some time now that, short of a complete rewrite of the scheme, we are not going to be delivering the proper outcomes we would like to deliver for injured workers or providing a competitive environment for businesses in South Australia. I think that is about all I need to say.

Mr MARSHALL: Thank you, Attorney-General, for those opening remarks. It occurs to me, though (and I think we are all going to be on Budget Paper 3, page 87, the entire time), that several other organisations operate under exactly the same laws with far better outcomes, the Local Government Association being one of those organisations.

You said that the problem with the performance of the WorkCover scheme is that all WorkCover in general is to do with the regulations. Whilst we have some sympathy with that, I wonder whether you would reflect on the significantly enhanced performance the LGA has, where they have a rate which would be half what they would be on if they were on the full WorkCover scheme and they return a profit each year, whilst being fully funded.

The Hon. J.R. RAU: I will let Mr McCarthy talk about this a little bit, but can I just say this as a start-off. I think analogies are sometimes helpful and sometimes not. When I was a little bit younger, blokes I knew used to buy a Holden with a 179 engine in it and, if it was not working very well, you could achieve a certain performance out of the thing or you could take it to some place and have new bits and pieces put on it—have it blueprinted and have big carbies put on it. It still was the 179 engine but you could tune it up to the point where it did a great deal of work. The point is that whatever you can say about the self-insured people, they are still working on a 179 block. They have still got the same basic structure, which is not good enough.

Mr MARSHALL: But would you accept that some of those working on that same basis are getting a far better output than we are getting from WorkCover directly?

The Hon. J.R. RAU: I have never run away from the fact, and do not run away from the fact, that, historically, the management of the WorkCover scheme has left a great deal to be desired. Part of the reason I took the opportunity of congratulating Greg and his team initially is that they really have made a significant difference to the way the scheme is administered. I readily admit that, historically, the scheme has not been run particularly well and the scheme has suffered for that. I invite Greg to make some comments about comparative efficiencies.

Mr McCARTHY: There is no doubt that large employers, and self-insured fall into that category, do perform better than the scheme generally. The scheme generally, though, is predominantly very small to medium employers, with those predominantly large employers in the self-insured space.

However, what I will say is that, if you separate out the equivalent size large employers within the scheme, they do perform on par with self-insured employers. There is a real difficulty in managing what is predominantly a small business scheme. If you look at large employers, they are capable of employing people in their workplace whose job it is, the moment someone gets injured, to pull everybody together and start the process of working with the supervisors, the injured workers and the external medical people to pull those people back into the workplace. Large employers within the scheme do the same thing, and those who do get very good outcomes as well. There are some who do not: that is fair to say.

In the last 12 months, with respect to the small to medium employers, we have tried to model what large employers do and introduced an early intervention model into the scheme where we have allowed both of the agents within the scheme to employ what we call return-to-work consultants, who are physios and OTs who specialise in workplace intervention. In modelling what those large self-insurers do, since September last year, within 48 hours of a claim being received and triaged and red or yellow flagged, one of those return-to-work consultants is now in those workplaces doing the sorts of things that self-insureds would do.

It is not as good as an employer being able to afford to employ somebody with the skills to do that but it is pretty close to being as good as you are going to get. Since we have done that, we have had some significant improvements in return to work and, I guess, people moving off the scheme in zero to two, two to 13 and 13 to 26 weeks. So, we have seen improvements in the scheme in attempting to model what those self-insurers do.

Mr MARSHALL: You are saying that there is a similar outcome in the large firms versus the self-insured, but that is only on the return-to-work statistics; it is not on the cost. The cost is significantly more expensive for larger firms which are on the scheme versus those which are self-insured?

Mr McCARTHY: In terms of premium?

Mr MARSHALL: In terms of the cost to the organisation.

Mr McCARTHY: The premium reflects the cost of the scheme as a whole; the average premium rate is spread as a result of the cost of the scheme. The average premium rate reflects the performance of the scheme as a whole, not just the cohort of large employers. So, yes, that is the case, and they—

Mr MARSHALL: They are essentially subsidising the smaller employers in South Australia who are more costly.

Mr McCARTHY: I would put it a different way. I would say that the better-performing employers in the scheme subsidise those who perform—

Mr MARSHALL: Very good. I just have one question here, which is onto firefighters. Have any firefighters made a claim under the presumptive laws in South Australia since they came into play at the end of last year?

The Hon. J.R. RAU: I will defer to Mr McCarthy on that one.

Mr McCARTHY: In fact, I am going to have to take that on notice because WorkCover does not provide the cover; that is part of the—

The Hon. J.R. RAU: State government.

Mr McCARTHY: —state government's scheme. That is not part of WorkCover.

Mr MARSHALL: When you do that analysis and come back to the committee, I would be grateful if you could also let us know whether they are MFS only or whether they are MFS who are also potentially CFS, and what cancers are being claimed for.

The Hon. J.R. RAU: We will take that on notice.

Mr MARSHALL: Thank you. I have one final question before I pass to my colleagues, and that is: I am wondering whether you have done any analysis, or whether you could do any analysis, on the premium rate that is paid by our agriculture sector here in South Australia relative to other agriculture sectors around Australia.

Mr McCARTHY: I can do that for you, yes.

Mr MARSHALL: Thank you very much.

Mr WILLIAMS: I noted, Deputy Premier, your opening remarks, and comments you have made publicly over a considerable period now, in excess of 12 months, I believe, and I remind you of what you said last year to the committee:

I believe that anybody who believes that some inspired legislative intrusion into the legislation is going to eliminate that unfunded liability in short order is either completely wrong or far brighter than anyone I have ever had the good fortune to speak to on this topic.

Yet now you come to the committee 12 months later and say that we need to have a completely new piece of legislation.

The Hon. J.R. RAU: That is because, in the intervening period, I have had the privilege of speaking to Mr McCarthy, and he is far brighter than anyone I have ever met on this topic.

Mr WILLIAMS: I will give you that response, minister. Notwithstanding that, you put out a press release, I think it was back on 2 April this year, where you made the statement that you would have legislation in the parliament prior to 1 July this year. We are still waiting.

The Hon. J.R. RAU: I feel suitably chastised and embarrassed that it is not here. I have made it very clear to parliamentary counsel—

The Hon. I.F. EVANS: Do not blame them.

The Hon. J.R. RAU: They claim that they have to sleep and stuff like that. I do not believe them, but that is what they say. They reckon that they are doing their best. This is a fairly complex piece of work. I would have preferred that it would already be in the parliament. I have had, without betraying any confidences, constructive conversations with the member for MacKillop about this matter and likewise with the Leader of the Opposition about this matter, and it is my intention that, as soon as it is possible to do so, I will be able to share a copy of the work with them. It is yet to be fully completed.

All I can say is that my intention is that it should be in the parliament as soon as possible. I have grown wary now, having been picked up on two important points already by the member for MacKillop, of giving black-and-white assurances about things, but it is my present intention that, before we adjourn for the winter break, the bill should be introduced. That is my intention, and I will be even more disappointed than I already am if I have not achieved that.

Mr WILLIAMS: Can I take it that it is still your intention to have the new scheme operating by 1 July next year?

The Hon. J.R. RAU: Absolutely.

Mr WILLIAMS: I note that you have had a discussion document out for general discussion, and obviously you have been holding discussions with various stakeholders in the industry. I think one of the broad directions that you have indicated is the reintroduction of common law. Another is the question of medical panels. I will come back to some of these later on in my questioning. Are you still of the same thinking that you have been in public statements over the last 12 months?

The Hon. J.R. RAU: Yes, broadly I am. If you look at the policy document that was published, I think, in February of this year, which basically sets out some parameters, it has been my view that we have to give full faith to operating within the parameters set out in that document and that is what I have sought to do. I think it is only fair to say to members of the committee that within those parameters there is still room for adjustment.

I will give one example: reintroduction of common law. There is at one end of the spectrum full common law with no threshold. At the other end of the spectrum you could go for something similar perhaps to what Victoria has, where you do have a common law option, but only for those with a very high residual incapacity level before you are entitled to exercise that option and even then the option only entitles you to recover for certain elements of what would otherwise be common law damages—and there is every point in between.

Both of those are still common law options. For example, you mentioned the common law. That is potentially a broad spectrum of opportunities. Each one of them brings its own pluses and minuses, depending on which side of the equation you are looking at it from. I think it is fair to say that there are some in the employer groups, particularly the self insureds, who take a very sceptical view about common law being reintroduced.

There are some within the trade union movement who have a very strong view that reintroduction of common law is going to be particularly useful, and then you have others who have less emphatic views about it than them. There is every range of opinion on this topic sitting out there. You mentioned medical panels. Medical panels we intend—

Mr MARSHALL: Just while you are on the common law, though. You mentioned the Victorian model. Is our model going to be more like the Victorian model, a very restrictive common law opportunity?

The Hon. J.R. RAU: That is what we are in the process of trying to settle. Whatever we do—just so everyone is clear—there is a trade-off in every single thing. There is no magic pudding here. To really simplify the whole thing, first and foremost we are trying to bring early intervention into the scheme in a practical way, so that we have better return to work outcomes for injured workers. That is the main priority of the whole thing.

The second thing is that if we have somebody who is profoundly injured, the scheme does not pester them with having to go to physios every week or whatever. They are acknowledged for being profoundly injured and they are dealt with in a decent way. Thirdly, that relatively small number of people for whom the early intervention at work does not solve the problem and who are not profoundly injured, cannot stay on the scheme indefinitely. Those people, by coming off the scheme, produce a pool of benefit to the scheme, both in terms of its unfunded liability and in terms of its ongoing cost, and the political exercise is sharing that dividend between the employers on the one hand and the injured people on the other.

To come more specifically back to the common law, let us say that there is $100 available for payouts to workers, you can have that $50 through the statutory payouts under section 43 of the current act, or whatever you want to call the equivalent, and $50 for the new common law. Or, you can make it 70/30, or 20/80—you can make it anything you like. In the end it still has to add up to 100.

Mr WILLIAMS: That is all very interesting, minister, but we have had a no-fault scheme since 1986 and at the time the Labor government of that era argued that there were serious problems with common law. Can you explain to the committee what your government sees as being the failure of the 'no fault' philosophy of the scheme that requires us to revert back to the common law approach?

The Hon. J.R. RAU: It is an interesting question. The no-fault scheme was introduced—basically there was a trade-off at the time. If you recall the debate that went on—

The Hon. I.F. EVANS: What, 1986!

The Hon. J.R. RAU: Yes.

Mr WILLIAMS: Yes, I can remember that!

Ms CHAPMAN: It was Trevor Griffin's finest hour.

The Hon. J.R. RAU: Perhaps I am betraying my age, but I was a legal practitioner at the time, as I know the member for Bragg was—although perhaps she was not in the Industrial Court as often as I was. At that time there were a number of problems with the 1971 act, although I personally thought it was a pretty good, simple piece of legislation which had a lot going for it. But there were some shortcomings.

The second thing was that people had to take out mezzanine insurance for common law. They did not get common law as part and parcel of their workers compensation premium. It was a completely separate thing and there started to be, as we have seen in some areas, a lack of availability of appropriate insurance products at a reasonable price, which started then to cause issues.

The response the government undertook at the time was to have a look into what was going on in New Zealand, where they had introduced this universal no-fault scheme which at the time looked like Nirvana and now looks something very different to Nirvana, as it was inevitably going to. Anyway, they looked at that and said, 'Oh gee, that's good,' and the trade-off was, 'Look, you people who represent employees, you give up the common law and you will get a pension scheme.' So you get a pension, but you give up the common law.

All we are saying is that now that we are basically rubbing out the pension scheme, we need to acknowledge that the pension scheme was originally, in the philosophical sense, purchased by abolition of common law, so if you are taking one thing away you at least have to put on the table a return to some of that. Every other jurisdiction has it including the commonwealth under Comcare.

The CHAIR: The member for Davenport has a question.

The Hon. I.F. EVANS: Same Budget Paper 5, page 87—who was on the selection panel for the appointment of the job placement provider panel?

Mr McCARTHY: It was the key staff from the business unit at WorkCover who oversee the provider services.

The Hon. I.F. EVANS: Do you know the names of the key staff?

Mr McCARTHY: I would have to take that on notice. Michael Francis, the general manager, was on the panel and I am going to be embarrassed to say I know who the people were but I am just having a mental blank as to the names of the other key people. I will have to take that on notice for you. I know who they are, I just cannot recall their actual names.

The Hon. I.F. EVANS: What measures were put in place to ensure that there was no conflict of interest that could potentially influence the appointment of panel members?

Mr McCARTHY: Anyone who had a conflict of interest. For example, there was one individual that had worked with the provider, that conflict was declared and they excused themselves from consideration of that particular provider.

The Hon. I.F. EVANS: Who declared the conflict of interest?

Mr McCARTHY: One of the individuals on the panel.

The Hon. I.F. EVANS: I understand that an individual had to declare it. What I am asking you is who was the individual?

Mr McCARTHY: The name escapes me for the moment but the individual declared the conflict. It was done under a proper—

The Hon. I.F. EVANS: Was it Jessica Dewar?

Mr McCARTHY: That would be right.

The Hon. I.F. EVANS: Right. So Jessica Dewar declared a conflict of interest because she was a former employee of Sandra De Poi's?

Mr McCARTHY: That is correct.

The Hon. I.F. EVANS: But she sat in judgment on the other potential contracts?

Mr McCARTHY: Yes.

The Hon. I.F. EVANS: So isn't that a conflict of interest there as well? Isn't there a conflict of interest? 'I am not judging the person I used to work for, I am just judging the tenders of the people who are competing with the person I used to work for.'

Mr McCARTHY: But the probity advice that we got was that there was not.

The Hon. I.F. EVANS: How many people work in WorkCover—900?

Mr McCARTHY: That is correct, but there are not that many in that division.

The Hon. I.F. EVANS: So there was no-one else without a conflict of interest that you could put on that panel?

Mr McCARTHY: Not to the degree of experience that was required for that particular activity and we had proper probity advice which said that provided that was declared, and that they were not sitting in consideration of that particular firm, then we were appropriate.

The Hon. I.F. EVANS: What was the potential conflict of interest—that she might have favoured Ms De Poi if she stayed in the room?

Mr McCARTHY: Could have been either.

The Hon. I.F. EVANS: How does that conflict apply to those people who are competing with her former employer? How is it not a conflict that I am sitting there in the room, I used to work for this particular employer, and I can influence the outcome, favourably or not favourably, of those who are competing against my former employer? How is that not a conflict of interest?

Mr McCARTHY: As I said to you, the probity advice that we had was that it was not.

The Hon. I.F. EVANS: I find it staggering that you can have someone in the room who worked for one of the providers and can influence the outcome for those who are competing against the provider she used to work for. I just cannot understand how that is not a conflict of interest. What was the specific question asked of the probity auditor?

Mr McCARTHY: The declaration was made and there was no advice that said that that should not continue.

The Hon. I.F. EVANS: Was there advice asked whether she should stay in the room for the other providers?

Mr McCARTHY: I will need to take that on notice.

The Hon. I.F. EVANS: If you could, thanks, that would be good. How did WorkCover validate the rehabilitation providers' proven outcomes when they have failed to provide individual rehabilitation providers' performance?

Mr McCARTHY: I beg your pardon?

The Hon. I.F. EVANS: How did WorkCover SA validate the rehabilitation providers' proven outcomes when they have failed to provide individual rehabilitation providers' performance?

Mr McCARTHY: WorkCover to date has not provided outcome performance for rehabilitation providers and that is a measure that we are in the process of putting into place. We will in the course of the next 12 months be able to provide information to both providers and the people who use providers on their performance, but that has not been in the scheme up until now.

The Hon. I.F. EVANS: So if the performance of the providers is not in the scheme up until now, how did you make the judgment about the providers being awarded the contracts and that they were actually performing well?

Mr McCARTHY: The difficulty when you have a situation like that is around their satisfying WorkCover about their ability to provide the service. A number of them had actually been providing the service in the commonwealth sector and providing outstanding performance in that sector, so from that perspective there was performance criteria for those who were actually working in the commonwealth sector. It was a little bit difficult for those who had not worked in that sector, but it was evaluated on what work they had been doing and their demonstration to us around their capability.

The Hon. I.F. EVANS: So WorkCover had no performance measure of the rehabilitation providers? You could not just hit a button and pull out Fred Smith's company's performance record and look at it for the tenders?

Mr McCARTHY: Not that it would have had any credibility.

The Hon. I.F. EVANS: And you have awarded contracts based on what?

Mr McCARTHY: Based on the information around them being able to satisfy us of the criteria that we wanted in respect of performing that contract. If you want to know the detail, and I know Mitch has asked for it, we are in the process of providing the detail around that at the moment.

The Hon. I.F. EVANS: Okay, so the scheme has been in place since 1989 and there has been no measurement of performance of rehab providers up until 2014, and we have the worst return-to-work rate in Australia by a mile, and not one of 900 people thought of putting in a performance measure on rehab providers?

Mr McCARTHY: I have been here for 12 months. I cannot do everything in one go, and we are in the process of putting that in place.

The Hon. I.F. EVANS: I understand that, but there has been a board in place that could have asked these questions.

Mr McCARTHY: I am not here to—

The Hon. J.R. RAU: Can I just say this: I am not disagreeing with the proposition that is effectively being advanced by the member for Davenport. In fact, I think I sort of said a while ago that I am not here to make an apology for the way the board of the past or the management of the past have conducted themselves with the scheme. I think it has been suboptimal—let's call it that. I would ask members to recall that last year I said as much in introducing legislation to change the corporate structure of the board to improve the governance of the scheme, so if the member for Davenport or others are wishing to assert that the scheme has performed averagely or worse in terms of its management, they are pushing against an open door.

Mr Marshall interjecting:

The Hon. J.R. RAU: They are pushing against an open door with me. I have been saying the same thing and I am not going to—

The Hon. I.F. EVANS: Okay, so minister, how then have the rehabilitation provider contracts been awarded in the past if there has not been a measure of their performance? There have been some providers that have had massive contracts awarded to them, based on what?

The Hon. J.R. RAU: Look, can I say this: one of the things that I raised with Mr McCarthy shortly after I became minister—and that was actually shortly after Mr McCarthy took up his role—was that very question about how we could get some intelligent assessment of what was going on with rehab providers. I can tell you that one of the things we have looked at very seriously in terms of the new legislation that we will be putting in is regulating their activities in a very serious way. As I said, I am not making any excuses for past management of the scheme not having turned their mind to that point when it is a matter that has concerned me from a distance for some time, and since I have been minister it has concerned me from close up.

In fact, one interpretation of what has been going on in the scheme is that you have had the claims managers, who have had certain KPIs wrapped around their performance, do the things that ring the bells for them to deliver the money, and then when it all gets too hard for them or they have rung the bell as often as they can they handball the thing off to a rehab provider who has basically got a credit card they can keep running through the machine indefinitely. That is just not good enough. I am not going to defend it—absolutely not.

Mr MARSHALL: Aren't you from the government that has been running it for the last 12 years? I know it was not you as the minister and things have improved—you told us that.

The Hon. J.R. RAU: But I did not claim credit for all that; I said that was Mr McCarthy who did all the good work.

Mr MARSHALL: No, that is right. Quite rightly so.

The Hon. J.R. RAU: What I can say is that, since I have been looking at this thing and since Mr McCarthy has been looking at it, we have very seriously turned our minds to these matters. I am not trying to make excuses for things that I do not think should have excuses made for them. I have not done that about this and I will not do that about this.

The Hon. I.F. EVANS: Minister, I will put the question direct to you: do you think that a former employee of one of the tenderers should have been able to sit in the room and cast judgement on tenders from other companies that were competing against a former employer's company?

The Hon. J.R. RAU: I do not know enough about the circumstances of it. I do not know what the probity advice situation was, but—

The Hon. I.F. EVANS: Are you, minister, then prepared to take on notice and table the probity advice, both the questions asked and the answers given for that particular issue?

The Hon. J.R. RAU: I will certainly look into it and I am happy to talk to you about it. I am not even sure if that comes within estimates, but I am happy to look it up for you anyway. I will find out; I will get to the bottom of it.

The Hon. I.F. EVANS: So, in the future, how will WorkCover measure performance of the rehab providers?

The Hon. J.R. RAU: That is one for Mr McCarthy by the sound of it to me.

Mr McCARTHY: It will be based around two things. It will be based around outcomes, so return-to-work outcomes, but also around meeting the service expectations of the scheme. There will be effectively a subjective assessment around the quality of the work that they provide and an objective assessment based on return-to-work outcomes.

The Hon. I.F. EVANS: Is it a fact that WorkCover has not measured this particular return-to-work performance of the individual providers? Is that the reason that inaccurate information has been given to some providers about their own company's performance or is there another reason?

Mr McCARTHY: No, the reason is that we are still in the process of refining what it is that we need to do in order to be able to provide proper performance measurements of those providers. It is something that is very new. It has not been done before. It does come with its challenges and we intend to get on top of it and come up with a very robust performance measurement, in consultation, I might add, with the industry.

The Hon. J.R. RAU: Can I just make a point here, too. There is a well-documented relationship between the speedy intervention in a workplace injury and a successful return to work. What I am about to say is a gross generalisation of things, but I am relatively relaxed about the scheme spending money in the first week or two (or three or four) aimed at getting a person back into the workplace and back on the horse, so to speak, but spending money after six months or 12 months is so close to lighting $50 notes with a cigarette lighter that it does not bear talking about.

It is not just how you do it. It is not just what the rehab provider—so-called—is doing. It is when they are doing it, because at some point in the natural history of an injury, it might well be that some sort of intervention by one of these professionals is really helpful, but that moment is almost certainly not 12 months, 18 months or two years after the injury. Money spent at that back end is almost always, in my opinion, money wasted.

The CHAIR: Any more questions on the topic?

The Hon. I.F. EVANS: Yes.

The CHAIR: It would be nice to get an indication.

The Hon. I.F. EVANS: Can the minister advise—or take on notice and provide to the committee—who was on the selection panel for Jessica Dewar to win her position, and were there any conflicts of interest declared in that process?

The Hon. J.R. RAU: Again, I am not sure it is really an estimates question, but in the spirit of bonhomie that seems to have evolved in here, I will see what I can do to find out and let the member for Davenport know.

Mr McCARTHY: We can certainly do that. What I would like to say is that South Australia—and Adelaide in particular—is a small place. We have a number of people who we have recruited into our organisation with what I would call occupational health skills, and many of them come from providers, not just one provider but a number of providers. That tends to be the market where we attract those people into the organisation, and to find them elsewhere would be nearly impossible.

Mr WILLIAMS: We will move to a different area. On the same reference—

The CHAIR: Which is?

Mr WILLIAMS: Budget Paper 3, Chapter 5, page 87, I believe. Minister, regarding the changes we were talking about earlier which you are proposing in the legislation which you are endeavouring to have before the parliament very shortly, have you taken actuarial advice on those changes?

The Hon. J.R. RAU: Yes, I have. It is a little bit like chasing your tail, though, because every time you make any potential change to the legislative scheme you really need to put it back to the actuaries again. I have been seeking actuarial advice for probably six or nine months. We started in September of last year, looking at different things and getting ballpark figures.

One of the parameters I have been adjusting all of this around is the election commitment, which was to have a break-even average premium rate of between 1.5 per cent and 2 per cent. So, it has been one of the design parameters of this scheme that whatever we bring to the parliament has to be accompanied by an actuarial certificate, as far as I am concerned, that puts it in that range.

That said, as the member for MacKillop would be aware, actuaries are very conservative people and do not give you any cred for anything. All things being equal, we may do better than whatever the actuaries say. If the scheme is well run and achieves some of the culture change that we hope it will, it may—I emphasise the word ‘may’—overshoot what the actuaries say. It is unlikely to do worse than the actuaries say; I think that is also fairly clear. But, because we do not have a final model yet, there is no final bill on which to base a final, conclusive actuarial assessment.

Mr McCARTHY: Could I just add something to that. The substantive parts of the work that has been done have also been peer reviewed by one of the other leading actuarial firms in Australia. So, the costings have been peer reviewed by one of the other leading scheme actuaries from another firm in Australia.

Mr WILLIAMS: I am delighted to hear what I have heard so far, minister, but I am somewhat concerned. In a press release you put out on 24 January this year, you said:

Under the new scheme, average WorkCover premiums for businesses in South Australia will come down to 2 per cent or less and the unfunded liability will virtually disappear…

Your government has been talking of making savings to business in South Australia of $180 million a year in premiums, and that is about the order you would achieve at that 2 per cent range. I point out that as of 7 July the average premium rate in Queensland is 1.2 per cent; in Victoria, 1.27 per cent; New South Wales, 1.4 per cent; and Western Australia, 1.56 per cent. Are we in danger of not aiming nearly low enough and still saddling South Australia with a culture where we are still going to be spending a lot more money on a WorkCover scheme relative to other states?

I would argue that it is quite clear that, if we could achieve an average premium rate which was the average of those other jurisdictions I have just cited, we would indeed be saving the business community in South Australia more like the order of $300 million a year, rather than $180 million a year. I note that our unemployment rate has been steadily increasing over the last number of years. Is it time we took this matter seriously and aimed where we should be aiming, that is, the average of the Australian rate?

The Hon. J.R. RAU: I understand the question, but I assure you that I am taking it seriously and have been all along. I think the point really is this: we need to play the ball from where we are, not where others are. Where we are presently is a scheme which has a break-even average premium rate in excess of 3 per cent. In fact, when Greg and the new board started their work, it was somewhere around 3.36, or 3.35, or 3.31.

Mr McCARTHY: It was 3.34.

The Hon. J.R. RAU: It was 3.34, which is more than double those numbers you were quoting. We have set a target range of between 1.5 and 2 per cent. I acknowledge that the current comparatives with interstate have some of the states in the low 1 per cents, but I think we need to be practical and realistic and say that for us to bring our scheme down from something which is travelling along at in excess of 3 per cent to something that is below 2 per cent is a substantial improvement, and it will involve a lot of compromise by a lot of people who feel very strongly about the scheme.

In a perfect world, if you were starting with a blank canvas you might say, yes, everyone should be on 1.2, but we are not starting with a blank canvas. We are starting with a scheme which is already there but, as I said, we have not overpromised in that policy document or in those statements. In those, I have made reference to a 2 per cent break-even average premium, which is the upper tolerable level of our policy.

We may well do better than that, and I think we need to let the scheme run in its form for a little while to see where it finally settles. It may settle better than 2 per cent, considerably better; if it does, then the saving we have indicated of $180 million per year across South Australian businesses will go up. You are quite right that if we got it down to around 1.5 that number would be closer to $300-something million, which is a big number.

I understand your point, and if we were dealing with a blank canvas in a vacuum I think your argument would be overwhelmingly compelling, but we are dealing with reality. We are dealing with a situation which is a current hardwired in excess of 3 per cent pension scheme which we are seeking to change, and that is a big move.

Mr WILLIAMS: I hope you can appreciate the committee's scepticism. I have been through all this before in 2008, when we were assured that the legislative changes of that era would fix up the scheme and make it perform much better; in fact, I think the scheme is considerably worse today than it was prior to those changes.

The Hon. J.R. RAU: But that occurred BMC—before McCarthy. Things are different now.

Mr WILLIAMS: Let me move on but come back to something we touched on a little while ago, that is, medical panels. Is it still your intention to get rid of medical panels? I think we had a discussion on this last year in this very committee, and medical panels were one of the things that we introduced in 2008. I think the parliament was convinced at that time that there was a place for medical panels and that it would make a significant change.

But of course the legislation, I would argue, was shown to be flawed. Medical panels have not been used as certainly I believe the parliament intended them to be used, and I think that has been part of the problem. Now it seems that your government has flagged that you want to get rid of medical panels. Is that still your position and, if it is, can you explain why you are heading down that path?

The Hon. J.R. RAU: Yes, that is our position. The Premier gave a very clear undertaking some 18 months or maybe two years ago that the medical panels would go, and we will honour that commitment.

Mr WILLIAMS: That commitment to whom?

The Hon. J.R. RAU: I think he made a public statement about it.

Mr WILLIAMS: He made a public statement. He made a press release on 27 October 2012.

The Hon. J.R. RAU: I do not think he has resiled from that at all since that time. Let's just delve into the medical panel question just for a moment. As the member for MacKillop would be aware, there was the case of Yaghoubi a while ago which was dealt with in the Supreme Court where they found that there are elements of the medical panel process which were fundamentally flawed. It involved requiring a doctor to make basically a legal determination which was found to be unsatisfactory, quite reasonably.

I think we need to make a distinction between substance and form here in terms of what is going on. The substance we are trying to deal with is duelling doctors, expensive litigation and wasting people's time with tyre kickers who are charging for medical reports. That is the substance of it.

The form the parliament took to deal with that substance was medical panels. That form has not worked, that form will be replaced, but it does not mean that the substance of the problem, which had an initial suggestion of medical panels as the solution, does not remain a problem—it does, or it will if it is not dealt with. What I am going to propose is to deal with that problem in a different way, but I recognise it is a problem and, if it is not dealt with, it will continue to be a problem.

Mr WILLIAMS: The Victorian system has an average premium rate of 1.27 per cent, and ours is, as you have told the committee, well over 3 per cent. Notwithstanding that the board of WorkCover, in its most recent annual report, recommended that we amend the medical panels legislation to reflect more the Victorian legislation, you are telling the committee that your government is still of the opinion that medical panels have no place in South Australia.

The Hon. J.R. RAU: All I can say is there has been a public commitment given by the Premier that medical panels, as currently constituted in the legislation, will be done away with. We intend to honour that commitment. The fact that the scheme in Victoria delivers a lower break-even average premium rate cannot fairly be attributed simply to the existence of a form of medical panel in Victoria. There are a great many other variations in the Victorian scheme which contribute to the way in which the scheme functions as an operational scheme, and they include the level of benefits.

Mr WILLIAMS: Notwithstanding that the chairman of the board, in the most recent report, recommended that we go down the path of Victoria with regard to medical panels.

The Hon. J.R. RAU: Reasonable people of goodwill may disagree on this point, but my point of view, as you will see in the legislation, is that we do intend to deal with the substantive problem, which is the potential for doctors for hire, the round and round the mulberry bush medical reports and counter-medical reports, etc. There is no argument that that is not helping—no argument at all. There is no argument that we need to deal with that in some way. All I am saying is the current medical panel solution is not the way to do it, but the problem does need to be addressed—I accept that—and will be.

Mr WILLIAMS: Having made that point, I will just briefly go back to the other issue we were discussing, that is, common law. Whereas you have identified that you have a problem with duelling doctors, now we are going to introduce, I believe, another problem where we are going to have duelling lawyers. You do not see any conflict in the philosophy of those two elements?

The Hon. J.R. RAU: I am going to take my lawyer's hat off just for the minute, because one might think I have a conflict of interest. I am not practising presently, but can I say that there are already lawyers involved in motor vehicle accident claims, for example, where the common law applies.

There are also workplace accidents, where lawyers are presently involved in the common law, where the worker is employed by a labour hire firm, for example, and they are working, say, in your premises. They are not your employee, but you have negotiated with a labour hire firm to have that person work in your premises. If they are injured, they can sue you now. They use a lawyer and they go through the common law courts, and everyone is quite relaxed about that. So, I think this can be sort of pumped up into something a lot bigger. Everyone who falls over on a banana in Woolworths can sue Woolworths in the common law courts—and I am not picking on Woolworths by the way; I am sure other people have bananas and so on. The point is that they can sue as well, and use lawyers.

I think it is very easy to misunderstand how many additional claims there might be and how complex they might be. I think the system is perfectly capable of managing it, and I have to say that there are people in the insurance industry—the ones who know what they are doing—who, as soon as they get notice of a common law claim, sit down with the parties and try to resolve it instead of letting it run. Those people achieve good outcomes for everyone, including the insurer.

Mr WILLIAMS: Given the time, minister, I will have to move on. I also note in the most recent report that disputation in South Australia is much higher than it is in any other jurisdiction in Australia or New Zealand, by every measurement.

The Hon. J.R. RAU: I agree that is a problem, and it is something I am trying to address. It is partly to do with the fact that there are so many moving parts in our current scheme. The scheme has too many swinging doors. What we need in the scheme is fewer swinging doors; we need clear paths and absolute boundaries. That eliminates a lot of that trouble with disputes. It will not get rid of it all, but it will get rid of a lot of it because there will be less to argue about.

Mr WILLIAMS: I am looking forward to seeing this bill, minister. A double-barrelled question, given the time: are you proposing to get rid of the Workers Compensation Tribunal in your legislation, and are you proposing to get rid of the WorkCover Ombudsman?

The Hon. J.R. RAU: At the present time those matters are being worked through. There is no definitive answer to those two questions, but I am looking at both those things.

Mr WILLIAMS: And you are going to have legislation here in a couple of weeks?

The Hon. J.R. RAU: Yes.

Mr WILLIAMS: Okay. Minister, I want to ask some questions about the—

The Hon. J.R. RAU: Sorry, one further thing; a bit of information there. Whatever happens there will be a transitional period during which the current structures will need to remain intact and will need to operate, because there will be a run-off of pre-new act matters. Clearly the existing structures for the determination of disputes in connection with those matters will need to be maintained, at least for a period, to be able to deal with them. So whatever happens, there will be that role.

The CHAIR: Do you have a final question?

Mr WILLIAMS: Yes. In the few minutes left, minister, regarding the experience rating that has been introduced by WorkCover as an additional premium paid by employers who have a poor work injury record relative to their industry, one of the things talked about for medium and small business people is how you classify a medium sized employer. I have to tell you that I have had examples in my own electorate where what I would regard as small businesses—certainly less than 20 employees—have come to me with a massive increase in their WorkCover premium because, in some instances, of one accident.

I can cite one incident that was a motor accident where the driver of a truck broke a toe. The driver of that truck was not wearing a seatbelt, as he was obliged to do under other law, yet this is costing this quite small employer literally, over the next four or five years, hundreds of thousands of dollars. So, how do you define a small employer, and has this new experience rating premium brought additional revenue or is it revenue neutral?

The Hon. J.R. RAU: I will give this over to Mr McCarthy, but I will say this: the question you are asking may or may not continue to have relevance for whatever the new scheme looks like, because the arrangements for the type of situation you are talking about may or may not continue to be the same. However, I will leave that to Mr McCarthy.

Mr McCARTHY: It is revenue neutral. It is meant to be revenue neutral and small sized employers in terms of the scheme because it is based around the industry rate that drives the premium, so about $20,000 in premium would be considered small. Below that level, employers are not experience rated, so that is the bulk of the employers in the scheme. There are only about 6,000 employers in the scheme who are actually experience rated. I think you cited a truck driver, so I would assume that is the trucking industry. The trucking industry is probably one of the highest risk industries, so it does not take too many employees in that industry to get your premium over the $20,000.

We have had a number of workshops with employer associations over the last six to eight months around the impact of the experience rated premium, and I think one of the objectives that was set for WorkCover in the charter that the Premier and the minister provided the board for this year was to look at what opportunities and incentives we could build into and review in the premium.

We have had a number of discussions with industry groups around how to resolve some of those issues that you raise. We will have a first tranche of solutions for this June and a much more robust solution for the following June. We are attempting to bring opportunities into the scheme to smooth out and alleviate the sorts of issues that you are talking about, so we are aware of it and we are working towards creating greater fairness in the scheme.

The CHAIR: There being no further questions, I declare the examination of proposed payments closed. I invite the minister to change advisers for the next section.

Membership:

Mr Knoll substituted for Mr Williams.

Departmental Advisers:

Mr R. Persse, Chief Executive, Attorney-General's Department.

Mr J. Hallion, Chief Executive Officer, Department of the Premier and Cabinet.

Mr A. Martin, Executive Director, Corporate Services, Department of the Premier and Cabinet.

Mr S. Froude, Acting Executive Director, State Records, Department of the Premier and Cabinet.

The CHAIR: Would the minister like to advise his new advisers?

The Hon. J.R. RAU: Yes. On my right, we have the return of the Chief Executive of the Attorney-General's Department, although he probably feels he has never left, Mr Persse. On my immediate left is Mr Jim Hallion who is the Chief Executive Officer of the Department of the Premier and Cabinet. To his left is Mr Alan Martin who is the Executive Director, Corporate Services, Department of the Premier and Cabinet. Behind us is Simon Froude, Acting Executive Director, State Records.

The CHAIR: Are we going straight to questions?

The Hon. J.R. RAU: Yes.

The CHAIR: Deputy leader?

Mr MARSHALL: Attorney-General, can you tell us what this source of income is, the $708,000?

The CHAIR: What page are we on?

Mr MARSHALL: On page 176.

The CHAIR: Budget paper?

Mr MARSHALL: Budget Paper 4, Volume 3, page 176, sub-program 6.1, Archives and Records Management.

The Hon. J.R. RAU: We are searching. We will be back to you in a moment.

Mr MARSHALL: Okay. Under Highlights in 2013-14, when will the government release its independent review of the State Records Act?

The Hon. J.R. RAU: Back to your question, I am advised that it is largely regulated fees for copying services.

Mr MARSHALL: So this is paid by people in the general public—organisations.

The Hon. J.R. RAU: And training provided to government agencies, I am advised.

Mr MARSHALL: I see. Thank you very much.

The Hon. J.R. RAU: Your next question was?

Mr MARSHALL: Under highlights on that same page, ‘Supporting the Independent Review of the State Records Act 1997’, when will the government release its independent review of the State Records Act? As a follow up, when will the government release its response to the review of the State Records Act?

The Hon. J.R. RAU: I will provide you with the following advice that has been provided to me. In September 2013 the government announced the appointment of Mr Allan Moss to undertake an independent review of the State Records Act. The review is considering the extent to which the current legislative framework effectively achieves the objects of the act, with particular consideration being given to electronic records. Mr Moss undertook public and interested party consultation between November 2013 and January 2014. Over 50 formal submissions were received in response to consultation.

A wide range of issues within the operation of the act were raised during the consultation, including: the need for clearer provision in the act with respect to electronic records; the inability of the act to ensure agency compliance with adequate record management; the complexity, timeliness and cost of the process for disposal of records; the need to permit the replacement of paper-based records with digital records allowing for the reduction of paper stores; a lack of a central digital archive for the South Australian public sector; and the need for an open-access period for archival records held by State Records.

Mr Moss has reviewed the issues raised during the consultation and is currently considering a range of options for a forum. It is expected that Mr Moss will recommend changes to the act. It is expected that Mr Moss will complete a draft report of the review in the middle part of this year, so it is imminent.

Mr MARSHALL: I see. So no report has been completed. It is underway. So your highlight was just consulting with somebody. Good, thank you. Does that review include the Electronic Patient Administration System, the implementation of the EPAS?

The Hon. J.R. RAU: I am advised not.

Mr MARSHALL: What about the PCEHR, the Personally Controlled Electronic Health Records?

The Hon. J.R. RAU: I am advised no. You might need to talk to Health about that.

Mr MARSHALL: State Records excluding Health?

The Hon. J.R. RAU: So it would seem.

Mr MARSHALL: This is surely the single biggest issue concerning State Records in the state at the moment: the implementation of the EPAS, which is running significantly over budget in South Australia the moment. You are saying that the independent review of State Records is not even taking a look at the EPAS? Goodness gracious me.

The Hon. J.R. RAU: I am advised that the situation is that this is a look at State Records across the board. Health has particular issues in relation to electronic records peculiar to Health. This was not intended to be a review specifically of Health. So there will be general propositions emerging from Mr Moss’s work which will have relevance and application to all government records, including those held by Health, but it is not a review which is focused specifically on Health-related records.

Mr MARSHALL: But it is not excluding Health?

The Hon. J.R. RAU: No.

Mr MARSHALL: So he will be looking at Health?

The Hon. J.R. RAU: I am advised that there has been communication with Health about these matters, including about EPAS.

Mr MARSHALL: When will you expect Mr Moss to be reporting on his overall review, including Health?

The Hon. J.R. RAU: Imminent; shortly.

Mr MARSHALL: Imminent? Good.

The Hon. J.R. RAU: Imminent; yes.

Mr MARSHALL: When can we expect the government's response to that review?

The Hon. J.R. RAU: Shortly after the imminent release, I imagine.

Mr MARSHALL: Shortly after?

The Hon. J.R. RAU: Yes.

Mr MARSHALL: I doubt it.

The Hon. J.R. RAU: I think the Leader of the Opposition can treat the reference to the highlight there as a bit of a drum roll for the release shortly.

Mr MARSHALL: I will make a note. As part of that drum roll, you refer to the implementation of the first part of stage 4—so, 4A, if you like, as part of that drum roll—of the proactive disclosure strategy. What is the first part of stage 4 of the proactive disclosure strategy?

The Hon. J.R. RAU: I am glad you asked that question.

Mr MARSHALL: I knew you would, sir; I knew you would.

The Hon. J.R. RAU: On 12 November 2012, cabinet noted the development of the proactive disclosure strategy for state government agencies. The strategy proposes that certain proactive disclosure initiatives be implemented in five stages. The five stages are: stage 1, online publication of selected cabinet documents 10 years or older; stage 2, updating and launching a revised citizens' rights to information charter and brochure; stage 3, agencies improving agency FOI information statements; stage 4, online publication of information that is regularly requested and released under FOI; stage 5, agencies adopting other proactive disclosure processes.

On 17 December cabinet approved stage 1, with an amendment to the cabinet documents 10-year rule policy to allow for the proactive disclosure of documents selected by the minister responsible for FOI in consultation with the cabinet. The policy was also amended to allow the DPC to proactively publish cabinet documents previously released under FOI, including those released under the 10-year rule. Stage 1 was completed on 15 April 2013, when the government published 28 of its own cabinet documents from 2002 which were considered to be of interest to the public. These documents related to the Peter Lewis compact, the Murray-Darling Basin and major drought and are available on the DPC site. South Australia is the first jurisdiction to do this.

The first part of stage 4 was approved by cabinet on 29 April 2013, with the policy approved on 2 September 2013. The first part of that requires the government portfolio agencies to proactively publish on their websites selected information relating to the expenditure and other details of ministers and chief executives, including their mobile phone and credit card usage, hospitality, entertainment and overseas travel expenses, certain procurement policies, and expenditure on consultants. The leader would be aware that previously those things had been routinely the matter of an FOI application, and as of that date these things are put out there.

Mr MARSHALL: Under Targets 2014-15 the second dot point states 'further development of information privacy legislation for South Australian public sector'. Can you indicate to us here today what is the intent of the information privacy legislation?

The Hon. J.R. RAU: Information privacy legislation is being developed to support the government's commitment to stronger protection of personal information and to further open and accountable government. The legislation will replace the government's existing administrative scheme for information privacy protection. It was established in 1989 and applied to information collected by South Australian government agencies, local government authorities and the three state universities. The legislation will establish a contemporary set of information privacy principles to guide the way public sector agencies collect, store, secure, and use and disclose personal information.

Mr MARSHALL: So this is new legislation that you are going to be introducing?

The Hon. J.R. RAU: Yes.

Mr MARSHALL: When will that be available for consultation? We can look at the detail when it is out for consultation.

The Hon. J.R. RAU: Consultation has occurred with South Australian government agencies on a draft bill. The bill has been drafted to provide consistency with the new Australian privacy principles.

Mr MARSHALL: Have we seen that draft bill?

The Hon. J.R. RAU: No, I do not believe you have. It is proposed that the draft information privacy bill will be released for an eight-week public consultation period prior to being introduced into the parliament. And your next question is: when will that eight-week period start—

Mr MARSHALL: You are a mind reader. You have so many skills and telepathy is just one in that regimen of skills.

The Hon. J.R. RAU: It is imminent.

Mr MARSHALL: Imminent. There is a lot of imminence and eminence here today, sir. On your third dot point, because a quick game is a good game, under, 'Targets', it states, 'Complete negotiations aimed at reducing the state's copyright liability.' With whom are you negotiating to reduce the state's copyright liability?

The Hon. J.R. RAU: The Copyright Act of the commonwealth allows government to copy copyrighted material for the services of government without infringing the act, provided it pays an equitable remuneration to a declared collecting society. Equitable remuneration is based on the outcomes of an agreed sampling system. State Records represents the state government in the non-education sector negotiations with collecting societies. Copyright Agency is the declared collecting society for print and electronic publications.

The last sampling survey that the SA government participated in for this was undertaken in 2003 and was implemented at a national level. A selection of staff from four SA government agencies participated and the results of sampling were aggregated and then extrapolated. That is not bad, is it, aggregated and extrapolated. For those with their sheets here we will just add in the words 'fabulous, bellicose and periscope'. I am just checking if they are awake.

Mr MARSHALL: The question was: who are you negotiating with? All that other information is very good but I thought you wanted to get out of here earlier.

The Hon. J.R. RAU: Sorry, I will cut to the chase then. Negotiations are continuing with Copyright Agency to determine the requirements of the sampling survey and a survey will be undertaken during 2014-15; an interim or BOP payment for 2010-11 to 2012-13. So, contingencies are sitting there for $640,000 in DPC.

Mr MARSHALL: I am still not sure who you are negotiating with, but I am sure if I read that Hansard back it might become apparent, potentially, or we could get a PhD student onto it.

The Hon. J.R. RAU: Copyright Agency collects fees on behalf of those—

The Hon. S.W. Key interjecting:

Mr MARSHALL: A parliamentary intern, the member for Ashford recommends a parliamentary intern to go through the Hansard. Let us move on. That is the last of my questions on State Records. Thank you very much. I would just like to ask some questions on government publishing.

The Hon. J.R. RAU: Okay, it is the same people. Yes?

The CHAIR: What line are we on?

Mr MARSHALL: Only because it is on the next page and I am sure the Deputy Speaker will be able to cast her eye from page 176 to 177.

The CHAIR: It is Hansard I am concerned for.

Mr MARSHALL: And Hansard as well, of course. Sub-program 6.2: Government Publishing. Can you provide a breakdown of the sources of income of $2.25 million?

The Hon. J.R. RAU: Yes, we will try. We will take that one on notice. Fabulous question.

Mr MARSHALL: I would like to ask a question under the topic, 'Targets', on the next page (178). What is the cost of the major upgrade to production facilities and when will it be delivered?

The Hon. J.R. RAU: I am advised the answer is $300,000 for digital copying equipment.

Mr MARSHALL: So, let us get this straight: you are spending $300,000 on what? 'Major upgrade' sounds larger than $300,000 to me.

The Hon. J.R. RAU: Apparently, it is to do with printers for government publications being replaced and upgraded; for example, the Gazette.

Mr MARSHALL: So, that is $300,000 and, let me guess, it is imminent?

The Hon. J.R. RAU: Not as imminent as the other things but, yes, it is in the foreseeable future. If we had a periscope we could see it from here.

Mr MARSHALL: The third dot point, under 'Targets':

Review current business arrangements and apply measures that address changed business practices and technological change.

What does that mean? What measures to change business practices are being contemplated by our government printers?

The Hon. J.R. RAU: Very good question.

Mr MARSHALL: You can take that on notice, I am sure.

The Hon. J.R. RAU: I am advised that it is to do with the drop in demand for hard copy. There is a review of whether there needs to be some sort of administrative shift towards online publication rather than hard copy.

Mr MARSHALL: Now on to Budget Paper 4, Volume 1, Employee Ombudsman's Services, page 45. Has the government at any time contemplated removing the Employee Ombudsman's services?

The Hon. J.R. RAU: The Leader of the Opposition raises an important question. The situation we have at the present time is that the Employee Ombudsman is a statutory office holder, not an employee as such of the Crown. Being as he is a statutory office holder, there is a particular methodology by which he can be removed and only that methodology, which is both houses of parliament essentially requesting his removal. Presently, he is in a situation where, as I understand it, he has been charged with some offences. The matter is currently before the Magistrates Court, but no date for trial has as yet been set.

At this stage, the chief executive has approved leave to Mr Brennan until those charges are finalised. He has delegated his powers to a lawyer in the office, so there is no effect on the functionality of the office itself. We are left with, I have to say, from everybody's viewpoint, an unsatisfactory situation where there are charges against him which may or may not turn out to be upheld. In the meantime, in light of that, it is not reasonable for him to continue to operate in his role, but by the same token we are unable to stand him down without pay; there is no legal way to do it. It is one of these terrible twilight zone situations where we just have to wait and see what happens.

Mr MARSHALL: Is he on leave with or without pay?

The Hon. J.R. RAU: With.

Mr MARSHALL: How long has he been on leave with pay?

The Hon. J.R. RAU: Since June 2013.

Mr MARSHALL: June 2013. What is his salary package, his total costs to the government?

The Hon. J.R. RAU: I had better check that and get back to you with the numbers.

Mr MARSHALL: Do you have any advice as to when these matters will be resolved in the courts?

The Hon. J.R. RAU: No, but I will see what I can find out. No date is yet set, whether that is because the prosecution has not prepared the matter properly—I gather it is a police prosecution, rather than a DPP prosecution—or whether it is because of some interlocutory argument between the defendant and the prosecution, I do not know. Quite frankly, this is not ideal from anyone's point of view.

Mr MARSHALL: What is the term of his appointment by parliament?

The Hon. J.R. RAU: Six years, and I think his appointment commenced in 2012.

Mr MARSHALL: So, it is quite possible that if these matters are not resolved the state could be paying through to—did you say he was put on leave in 2012?

The Hon. J.R. RAU: No, 2013. He had occupied the role. He was appointed in 2006. In 2012, because it is a six-year term, there was a reappointment to the position. These issues that are now troubling us came to the fore in May/June 2013, so a year after his reappointment.

Mr MARSHALL: So none of these issues that have now come to light in the court action were in any way known to the government before the reappointment by the parliament?

The Hon. J.R. RAU: Not as far as I know, no. I have to say, I was not the relevant minister at the time.

Mr MARSHALL: So you were not aware and, to the best of your ability, the government was not aware, but you could ask people who now report to you in that area whether they were aware prior to that appointment of any of these pending matters.

The Hon. J.R. RAU: I am positive there were not any, because he was not actually charged until May 2013, so there were no charges.

Mr MARSHALL: Who is fulfilling the role that was previously done by Mr Brennan?

The Hon. J.R. RAU: There is a woman in the office. Do you need a name?

Mr MARSHALL: That would be helpful.

The Hon. J.R. RAU: Ms Stephanie Burke. Apparently the powers have been delegated to her, so she is functionally able to discharge the duties.

Mr MARSHALL: Is it fair to say though—because this is quite a small program with a total budget of $507,000 per year, which I would say is probably almost completely made up of wages, and I would assume that the ombudsman's wage was the lion's share of that—that there is a significantly diminished service, given that potentially a third or maybe a half of the wage is being paid to somebody who is not fulfilling the job, so there is an added burden on the remaining people? Is this a much diminished service and has the government contemplated any increase in budget to this office because there is not a full-time ombudsman in place?

The Hon. J.R. RAU: In relation to your last question first, I certainly have not contemplated increasing the budget. I say again that this is most unsatisfactory from everyone's point of view, and we are in this sort of hiatus where we are neither one thing nor the other. We do not have him convicted of any offence but we do not have him cleared of any offence. Let us face it, the law presumes people innocent until proven otherwise, so that is the situation. Nonetheless, I am not happy with the idea of having him standing aside as he is. If he were a normal public sector employee, maybe we would have different options—maybe. However, given the fact that he has not actually been convicted of anything, even that is an arguable point.

Mr MARSHALL: Back to my very initial question on this set: have you, the government, in any way contemplated the removal of the employee ombudsman agency within government?

The Hon. J.R. RAU: I have asked myself the question of what value the government is getting out of this and I have been giving that some thought. I do not have a concluded view, but I have—

Mr MARSHALL: But you are contemplating it? You are asking yourself the question?

The Hon. J.R. RAU: Yes, I have.

Mr MARSHALL: That is all I have on that topic. Can I move on now to conciliation and arbitration? Is that permissible?

The Hon. J.R. RAU: Yes.

Mr MARSHALL: On that one I will be pretty brief as well. This is Budget Paper 4, Volume 1, page 49, Conciliation and Arbitration. Can you provide a breakdown of the income of $924,000 to the program in this current financial year?

The Hon. J.R. RAU: I will take it on notice.

Mr MARSHALL: Very good. A quick game is a good game. Also, over the page on page 50, it seems to me that you are expecting a quite significant uplift in the number of Industrial Court matters to be lodged. In that bottom 'Activity indicators' sector (the middle one), under the 'No. of Licensing Court matters lodged', the estimated result for last year was just 90 and the projection for this year is 150. What do you envisage that you are going to be doing this year that you were not doing last year?

The Hon. J.R. RAU: Can I take that on notice and—

Mr MARSHALL: Is there anything that occurs to you as to why there would be such a massive increase in Licensing Court arbitration and conciliation in just the one year? Is there any legislation that would be driving that?

The Hon. J.R. RAU: I would not have thought so. Looking at those numbers I am perhaps as puzzled as the Leader of the Opposition is. It says projection for 2013-14 of $180, estimated result 90, projection for 2014-15,150. If you look at the projected numbers for those years it is actually coming down.

Mr MARSHALL: There is another good thing to investigate. What were you doing last year? Certainly nowhere near your target.

The Hon. J.R. RAU: No, indeed,

Mr MARSHALL: Half.

The Hon. J.R. RAU: Can I take it on notice.

Mr MARSHALL: You certainly can, sir. Thank you very much. If we could now move to industrial relations. We are nearly through.

The Hon. J.R. RAU: Excellent.

Departmental Advisers:

Mr R. Persse, Chief Executive, Attorney-General's Department.

Mr B. Russell, Executive Director, SafeWork SA.

Ms M. Boland, Director, Community Engagement, SafeWork SA.

The CHAIR: Please proceed.

Mr MARSHALL: I refer to Budget Paper 4, Volume 1, page 41 to 43, Subprogram 8.1: SafeWork SA. Can you provide a breakdown of the sources of income for SafeWork SA, the $24 million for this current budget year?

The Hon. J.R. RAU: I think your number is a bit different to mine. My note here says that the estimated budget for 2014-15 is $12.5 million.

Mr MARSHALL: No, that is the net cost of the program. I am asking the question about the sources of income which is the line above, $24,171,000.

The Hon. J.R. RAU: We will take it on notice.

Mr MARSHALL: Thank you very much. Can you provide a breakdown by function of the current staff of SafeWork SA and, as part of that question, can you provide a breakdown of the staff that have left that agency since the budget for 2013-14 was set? In that year the budget was set at 270 FTEs and I see the budget for this year is 226.

The Hon. J.R. RAU: I will take it on notice.

Mr MARSHALL: The third question is: of the expenses how much was spent on grants to third parties? The expenses are $36 million; how much was spent in grants to third parties and, of those grants, how much was provided to union-based organisations?

The Hon. J.R. RAU: Can I just make a point of clarification? Are you asking for any and all grants to any organisation which is a trade union?

Mr MARSHALL: In that table at the top of page 42, it has Expenses. Presumably, a lot of those are going to be for employee costs but I am presuming that some of those are going to be for grants to third parties. I would like to know what the total is of grants to third parties and, of those grants, how much was provided to union-based organisations?

The Hon. J.R. RAU: I will tell you what I have here and, if it is not adequate, I will have to take the balance on notice. These are third-party organisations I know about:

Asbestos Diseases Society of South Australia, $25,000 plus $5,000 in-kind support;

Asbestos Victims Association, $25,000 plus $5,000 in-kind support;

University of South Australia—Andrew Knox Memorial Scholarship, $23,800;

Working Women's Centre, $400,000;

SA Unions—Young Workers Legal Service, $80,000;

WHS Commissioned Research Grant Program, including WHS Supplementary Scholarships, $320,000;

WHS Innovative Practice Grant Program, $130,000;

WHS Linkage Project Grant Program, $200,000; and

Safe Work Australia (South Australia's contribution to the administration of Safe Work Australia), $703,000.

In addition to that—

The Hon. I.F. Evans interjecting:

The Hon. J.R. RAU: Seamless national wonderland sort of stuff.

Mr MARSHALL: On your list so far, there is only one to a union and that was SA Unions, $80,000. What was that program for?

The Hon. J.R. RAU: It says:

The main purpose of the service is to assist young workers under the age of 30 with employment relations issues, such as unfair dismissal, underpayment of wages, bullying and harassment. Qualified staff will assist young workers to resolve disputes at the workplace through the legal process if required.

There is another one here which I should mention as well. There was, for a number of years, a thing called the Health and Safety Workplace Partnership Program. This was a three-year grants program to improve the level of training, resources and information available to employees and industries that had high levels of workplace injury. The program aimed to raise employee awareness of workplace safety through improved information and training.

The initial three-year program commenced in 2007 and the total amount of the funding provided to 12 unions over a three-year period was $3 million. The second three-year program included eight unions which received grants to the value of $2.85 million and concluded at the end of June 2014. SafeWork SA was allocated $150,000 over the three-year period to administer the grants and ensure compliance with funding conditions. That program expired as of June this year.

Mr MARSHALL: That is the total list of grant moneys that have been provided in the 2013-14 year, and you will tell us how much of the total expenses in 2014-15 is going to be allocated to grants and how much is going to be allocated to unions for those grants?

The Hon. J.R. RAU: I am happy to get that information but, so you understand, that program came to an end as of 30 June.

The Hon. S.W. KEY: I want to make the connection between the work of the Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation and to say that one of the references that the committee had last year looked at occupational health and safety responsibilities of SafeWork. This was initiated by the Hon. Rob Lucas, looking at the structure of WorkCover as opposed to SafeWork and whether perhaps there could be another structure or a back-to-the-future model. I am very pleased to see that the targets for 2014-15, on page 42, state:

Implement the recommendations of the parliamentary report into occupational, health and safety and responsibilities of SafeWork.

For all those people who are on parliamentary committees who wonder whether anything happens with their recommendations, this, along also with the study we did for return to work and the concerns we had about people returning to work after being injured or having an illness associated with their work, it is good to see that there has been some action followed up on those areas.

Mr MARSHALL: As Tony Jones would say, 'I will take that as a comment,' but a very good one. Back to questions: have you been advised of significant concerns in the construction industry that some union representatives have been abusing the right-to-entry provisions of the Work Health and Safety Act and, if so, what action have you taken as the minister responsible?

The Hon. J.R. RAU: Yes, from time to time I have become aware of assertions of that kind. Sometimes, and I think almost invariably, I become aware by reason of media stories about the matter rather than somebody—

The Hon. I.F. EVANS: The department does not notify you?

The Hon. J.R. RAU: I do not know that it is so much the department. I think that it is a matter of some of these people who have complaints thinking that the best place to go with the complaints is to the media rather to the minister.

Mr MARSHALL: But your door is always open.

The Hon. J.R. RAU: It is always open, you are quite right. One of the funny things, and you are going to find this very hard to believe, and I will not name this person, but they are a member of parliament but not of this parliament. They are a member of another parliament. I often will get a phone call in my office to say, 'The media want to talk to you about issue X,' (and there is a clue), and I say, 'I don't know anything about that.' 'Well, do you know this unnamed member of parliament has written to you about this matter, and you have done nothing about it?' and at that moment I turn and my fax machine goes 'choonk, choonk, choonk', and out comes the letter. So, sometimes things are not done in what you might call a perfect way.

That was a long answer, and I think that, in the meantime, Mr Russell has some other things for me to tell you. I am advised that SafeWork has received 151 notifications of proposed entry under these provisions between 1 July 2013 and 30 June 2014. SafeWork has received notifications of two situations where the right-of-entry provision has been disputed. What happened about those perhaps I could ask Mr Russell to explain.

Mr RUSSELL: Yes, thank you, Deputy Premier. Both of those situations were resolved either at the workplace or through the Industrial Relations Commission. Where there are matters involving a disputed entry, it is up to the parties to negotiate a settlement at that point. If they feel that they need some assistance from SafeWork SA, we will attend. If that situation fails to be able to resolve the issue, the parties have the opportunity to refer that to the Industrial Relations Commission for a resolution.

Mr MARSHALL: Is there any obligation for the parties to refer the matter to you? It seems like an extraordinarily low figure, just 151—

Mr RUSSELL: Notifications.

Mr MARSHALL: —notifications and only two disputed notifications. It seems completely out of kilter with what I and the Attorney-General have been reading about in the media.

Mr RUSSEL: I think that those two disputed situations where the matter escalated, certainly there were occasions where there was disagreement about the right of a party to enter into the workplace but, by and large, that disagreement was resolved at the point of entry. Those matters were escalated to a higher level, typically the Industrial Relations Commission.

The Hon. I.F. EVANS: Minister, the 151 notifications, is it possible to get a breakdown of how many of those were from the construction industry and per site? In other words, I am trying to establish whether there is one particular site or two particular sites that are generating a lot of these notifications.

The Hon. J.R. RAU: We will take that on notice, but my expectation would be that they would be very largely in relation to construction.

Mr RUSSELL: Correct; and the majority of those are from the CFMEU.

The Hon. I.F. EVANS: And the majority of those are from which site?

Mr RUSSELL: The new Royal Adelaide Hospital site.

The Hon. I.F. EVANS: Given that answer, is the minister concerned that we have another Myer Remm centre on our hands, that the project is so big that the unions are taking advantage of the circumstances and playing hard ball? It just seems bizarre that the vast majority of these notifications all come from one site. What other explanation could there be?

The Hon. J.R. RAU: I have not seen any evidence to support that sort of proposition. The site is a very large complex site. It should not be a surprise to anybody that on a site of that scale there is from time to time an issue. You would be aware that there have been, for example, issues about safety there from time to time. Again, given the scale of the construction work being undertaken there and the time over which it is being conducted, I guess it is inevitable that there are going to be some issues. We will get those details for the member.

Mr MARSHALL: Have you been advised that the CFMEU over one two-week period entered the new Royal Adelaide Hospital worksite on 70 separate occasions using the right of entry provisions?

The Hon. J.R. RAU: No, I have not been advised of that, but the right of entry, if done appropriately, is not an issue. I thought the questioning was about whether or not they were contested rights of entry. I see a piece of advice here that Mr Russell is showing me that says that there have been 66 notifications for the site. This consisted of 52 from the CFMEU and 14 from the CEPU. On a few occasions, two or more from the same union have attended on the site on the same day. SafeWork inspectors have attended the site for 19 notifications and SafeWork inspectors did not attend the site for 47 notifications.

Mr MARSHALL: Have you received any notification from SafeWork SA or been advised in any way by SafeWork SA that some unions have been abusing the right to entry provisions?

The Hon. J.R. RAU: No, I have not been advised of that.

Mr MARSHALL: Have you been advised of continuing industry concerns about the complexity and red tape of codes of practice under the Work, Health and Safety Act, and what action have you taken to address these concerns?

The Hon. J.R. RAU: Under the Work, Health and Safety Act, I think there are about 23 codes, of which 20 appear to have attracted virtually no attention or controversy at all. Three of them have been the subject of some concerns, and the government supported the movement of a disallowance motion in the Legislative Council last year to enable those codes to be the subject of further work. I just think it is important to put on the record, though, that those codes stand by way of an explanation of what the law is. The fact that the code is not there at the moment does not change what the law is. The code is there by way of an explanation, if you like, or an aid to understanding the law.

It has been put to me by people, particularly in the HIA, that these codes were not helpful and were actually causing difficulties. The Small Business Commissioner had a look at this issue, because I thought we had better involve the Small Business Commissioner. The Small Business Commissioner made a recommendation that the code should be revisited. We were happy to see the codes moved, because it does not actually change the law.

One of the things I think would be very helpful would be if those who have had concerns about the codes were to get back to Mr Russell with their suggestions about what sort of helpful information their members could be getting to help them understand what the law is. If that is a simpler document—a two-page document instead of a 10-page document or something—

Mr MARSHALL: The Small Business Commissioner provided some feedback, have they not?

The Hon. J.R. RAU: Yes, I know, but as I understand it we do not really have much feedback from the HIA. We know they do not like what was there—

Mr MARSHALL: So it is their fault?

The Hon. J.R. RAU: No, I am not blaming them at all. I am saying I listened to them and we allowed the codes to go.

Mr MARSHALL: When were those codes disallowed?

The Hon. J.R. RAU: September/October/November last year—something of that nature, if I recall correctly.

Mr MARSHALL: September/October/November last year—so what is your time frame for reintroduction of the codes?

The Hon. J.R. RAU: What I am trying to say to you is that we—

Mr MARSHALL: The act continues on.

The Hon. J.R. RAU: November last year they were taken out. I would be happy to see some agreement or some consensus with the HIA, in particular, about what we put back in there.

The Hon. I.F. EVANS: On the same line of questioning, your advice to the committee is that everything that was in the three guidelines which was criticised by the Small Business Commissioner, all of that is required by the law, by the act. There is nothing in the guide that is not required by the act, and the guide was an explanation of the act.

The Hon. J.R. RAU: That is the advice that I have.

The Hon. I.F. EVANS: So all the complaints that the industry groups had about the unworkability as explained in the guide still remain, because they were obligated to undertake whatever was in the guidelines as part of the act?

The Hon. J.R. RAU: The second thing does not necessarily follow from the first.

The Hon. I.F. EVANS: I do not see how not.

The Hon. J.R. RAU: My advice is that the guidelines did not create the obligation to behave in a certain way. That was created by the law. The guidelines were simply a way of articulating that, hopefully to help people.

The Hon. I.F. EVANS: Yes, but the guidelines were articulating what they had to do to comply with the law.

The Hon. J.R. RAU: Apparently it was confusing them, so I am told, and was not helping them to comply with the law.

The Hon. I.F. EVANS: So is it the government's intention to replace the guidelines or is it the government's intention to simply say that the law stands as the law stands and we do not need guidelines; we will not replace those three. Is it the government's intention to replace those three?

The Hon. J.R. RAU: My preference is that we replace them with something which the industry accepts is useful. That is my preference. If we do not replace them with something that the industry finds useful then the industry is still bound by the law. It is just that it will not have any sort of ready reckoner or aid to interpretation of the law that it can use. I think that is a second-rate outcome but, if there is nothing that we can actually find that the industry is happy with as a replacement code, then I guess that is where it will remain.

Mr MARSHALL: Do you now accept that the government's claim of the nationally harmonised work, health and safety arrangement cannot be achieved?

The Hon. J.R. RAU: That is a very good question actually, and I think the jury is out on that. I went to a meeting recently in Melbourne with Senator Abetz and various ministerial colleagues from around the commonwealth where we had a bit of a chitchat about this topic and it was agreed that there would be a review, conducted I think by the federal IR department, of the whole of this work safety thing around the country, and that review may or may not come up with suggestions which most, if not all, parties around the commonwealth can agree to. If it does, then the harmonisation objective is still largely intact; if it does not, then probably over time we will see greater fragmentation of the system.

Mr MARSHALL: What is the time line for that?

The Hon. J.R. RAU: The end of this year.

Mr MARSHALL: So who is doing that review?

The Hon. J.R. RAU: The federal minister's department, the commonwealth department of employment.

Mr MARSHALL: You will see that at the end of the year but is there not also a review that the state government has undertaken?

The Hon. J.R. RAU: Yes. I think that was mandated in the legislation. I think it was something that our friends in the other place inserted into the bill, that it be the subject of a review. You may recall too that I think the Hon. Mr Darley made some amendments to our legislation which already made ours slightly different to legislation in other jurisdictions. The relevant thing is that since that time there has been a ministerial council meeting where there has been an agreement by all ministers that the matters that are in dispute should be referred off to this review being conducted by the federal department.

There is a requirement under section 277 of our act which will require the operation of our act, as well as providing specific reports on the extent to which inspectors have attended workplaces under the right of entry provisions of the act. So there will be a local review which is required under the act and, hopefully, we will have the result of the federal review so that we can consider harmonisation issues as well.

Mr MARSHALL: I understand the state-based review is being done by Robin Stewart-Crompton; is that correct?

The Hon. J.R. RAU: Yes.

Mr MARSHALL: His review is due when? Imminently?

The Hon. J.R. RAU: 21 November, I am advised.

Mr MARSHALL: 21 November, slightly outside of that imminent time frame that we have much referred to today.

The Hon. J.R. RAU: Not very imminent but, nonetheless, imminent.

Mr MARSHALL: Future imminence, as the Chair has suggested. Will this review also review the regulations and the codes of practice or just the act?

The Hon. J.R. RAU: Just the act.

Mr MARSHALL: What is the cost of this review?

The Hon. J.R. RAU: $148,500.

Mr MARSHALL: Are you aware that Mr Robin Stewart-Crompton was a member of the group that wrote the report that gave rise to the model Work Health and Safety Act itself?

The Hon. J.R. RAU: I was not aware of that, no.

Mr MARSHALL: He seems an odd person to do the review seeing as he wrote the model act which we have adopted and now you are getting him to review it. Could you make some comment on that?

The Hon. J.R. RAU: I am advised that he was the head of the relevant commonwealth regulator for a period of time and therefore understands the regulatory environment, and he does have, by reason of his experience and association with this, particular knowledge of the area of law, and that was considered to be an asset in him conducting the review. To come back to your original question, though Queensland has, as the Leader of the Opposition may know, recently decided it will paddle its own canoe in this space to some degree already, we are facing this review at a national level. As I said before, I think the jury is still out about whether we have sufficient commonality between all the jurisdictions and are likely to retain it for there to be a genuinely harmonised scheme. At the moment the answer to that question is yes but it depends on how—

Mr MARSHALL: Queensland is significantly amending their work health and safety legislation. Victoria and Western Australia never adopted the national model. I think quite frankly it is unlikely. I think the Attorney-General would agree with that but he is going to wait for the state-based review and the federal review which are both due by the end of the year. I would make the point though that not only is Robin Stewart-Crompton doing the state-based review, and he was involved with the drafting of the model harmonised legislation framework that you are reviewing, but the federal review is being done by Barry Sherriff who was also essentially the principal author of the model bill.

So both the reviews are being done by the people who proposed the bill in the first place, and I do not know whether the Attorney-General has a comment, but many people in the industry think that these reviews are being done essentially to get the answer that government wants, but I am sure the Attorney-General would not be of that opinion.

The Hon. J.R. RAU: Look, I was not aware of this, and am still not aware—I am not calling into question your sincerity in asking that question. I do not know anything about this gentleman or his antecedents. What you say may be completely correct, but I am advised that he is a man with experience and that he was thought to be a good person to have a look at this area of law.

The other thing I would point out too, though, is that wherever we are going with this, I think everybody—employers and employees—needs to have a period of stability here. We went through quite a difficult period when my predecessor tried to move this legislation through the parliament. It took quite a while and there was a lot of coming and going about it, and now people are just sort of getting their heads around it.

I think, in the interest of people having a stable, known environment, there is something to be said for just sticking with what we have got and letting people just sort that out. But I am not closing my mind to whatever might come out of either of these reviews. If there are improvements that can usefully be made, good.

The CHAIR: The leader has a final question?

Mr MARSHALL: Final question, then: it may be a bit redundant given your last statement, but I was going to ask whether the minister had given any consideration to repealing the act and whether he has given any consideration to significantly amending the act.

The Hon. J.R. RAU: The answer to repealing the act is: not at all.

Mr MARSHALL: You would rule that out?

The Hon. J.R. RAU: I do not know about ruling it out. It is ultimately a decision for cabinet, but I have not turned my mind to that, for the reason I just explained. If you keep changing the game on people, it makes it a bit unfair. It makes the whole environment very hard for people to operate in, particularly when they have to go through relearning about how they do different things but, that said, if either of these reviews say that there are useful things that could be done to improve the practicality or serviceability of the regime that regulates things, I have an open mind to that.

The CHAIR: There being no further questions to the minister, I declare the examination of the proposed payments for the Attorney-General's Department and the Department of Premier and Cabinet adjourned and referred to Committee B and the proposed payments for the Department of Treasury and Finance adjourned until Monday 21 July and thank the minister and his advisers.

At 19:16 the committee adjourned until Friday 18 July 2014 at 10:30.