WORKCOVER CORPORATION (GOVERNANCE REVIEW) AMENDMENT BILL

Introduction and First Reading

The Hon. M.J. WRIGHT (Lee—Minister for Industrial Relations, Minister for Finance, Minister for Government Enterprises, Minister for Recreation, Sport and Racing) (16:01): Obtained leave and introduced a bill for an act to amend the WorkCover Corporation Act 1994. Read a first time.

Second Reading

The Hon. M.J. WRIGHT (Lee—Minister for Industrial Relations, Minister for Finance, Minister for Government Enterprises, Minister for Recreation, Sport and Racing) (16:01): I move:

That this bill be now read a second time.

The bill I am introducing today amends the WorkCover Corporation Act 1994. Its overall purpose is to provide a more certain and contemporary framework for the relationship between the government and WorkCover. The bill does this by effectively replicating part of the governance arrangements used for those other statutory authorities that are subject to the Public Corporations Act.

The need for this stems, in part, from the amendments the government is seeking to make to the Workers Rehabilitation and Compensation Act. These amendments represent the most significant reforms to that Act in its 20-year history. The community needs to be confident that the government and WorkCover are working together on delivering these reforms. The mechanisms proposed to provide that confidence are both certain and transparent. These are the specific mechanisms proposed:

First, the bill replicates the power of ministerial direction used in the Public Corporations Act, providing the government and WorkCover with greater certainty over the exercise of ministerial direction.

Second, the bill requires preparation of a charter and performance agreement between the minister and WorkCover. As with the Public Corporations Act, the minister is obliged to prepare a charter in consultation with WorkCover. The charter is to deal with the nature of WorkCover's operations, its reporting and accounting obligations, internal audit and financial systems and practices of any other relevant matters.

The performance statement also needs to be prepared by the Minister setting performance targets for the corporation for the coming year.

Both the charter and the performance statement will be made public, allowing the parliament and the community to track progress of WorkCover against outcomes agreed with the government.

Finally, the bill proposes that WorkCover have its accounts audited by the Auditor-General. The purpose of this amendment is to provide added transparency to the new governance framework introduced by this bill.

I commend the bill to members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

This clause provides that operation of the measure will commence on a day to be fixed by proclamation.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of WorkCover Corporation Act 1994

4—Amendment of section 4—Continuation of Corporation

Section 4(4) provides that the Corporation is subject to the general control and direction of the Minister. This subsection is to be removed because of the insertion by clause 5 of new section 14A, which provides, among other things, that the Corporation is subject to control and direction by the Minister.

5—Insertion of section 14A

This clause inserts a new section.

Proposed section 14A provides that the Corporation is subject to control and direction by the Minister. However, the section prevents the Minister from directing the Corporation in relation to the manner in which action should be taken in connection with a particular claim or entitlement of a worker under the Workers Rehabilitation and Compensation Act 1986.

There is a requirement for a ministerial direction to be communicated to the Corporation in writing. A written direction is to be included in the next annual report of the Corporation and published in the Gazette within seven days after it is given.

The requirement to publish the direction does not apply if the Corporation advises the Minister that publication of the direction—

might detrimentally affect the Corporation's commercial interests; or

might constitute breach of a duty of confidence; or

might prejudice an investigation of misconduct or possible misconduct; or

might detrimentally affect the performance of a statutory function,

and the Minister is satisfied that the direction should not be published for the reason given. In that event, the Minister is required to present a copy of the direction to the Economic and Finance Committee of the Parliament within 14 days after it was given. The Corporation must cause a statement of the fact that the direction was given to be published in its next annual report.

6—Amendment of section 17—Delegations

Section 17 provides that the Corporation may, by instrument in writing, delegate a function or power conferred on or vested in the Corporation. This clause amends section 17 by inserting a new provision providing for the subdelegation of a delegated function or power if the terms of the instrument of delegation allow for subdelegation.

7—Insertion of Part 3A

Proposed Part 3A provides in section 17A for the preparation of a charter for the Corporation by the Minister following consultation with the Corporation. The charter is to deal with the following:

the nature and scope of any operations to be undertaken, including—

the nature and scope of investment activities; and

the nature and scope of any operations or transactions outside the State;

all requirements of the Minister as to—

the Corporation's obligations to report on its operations; and

the form and contents of the Corporation's accounts and financial statements; and

any accounting, internal auditing or financial systems or practices to be established or observed by the Corporation; and

the acquisition or disposal of capital or assets or the borrowing or lending of money.

The charter may limit the functions or powers of the Corporation, but only insofar as they relate to its commercial operations. The charter cannot extend the Corporation's functions or powers as provided by the Act.

The charter is to be reviewed by the Minister at the end of each financial year and may be amended at any time following consultation with the Corporation.

The Minister is required to cause a copy of the charter, or a copy of the charter in an amended form, to be laid before both Houses of Parliament and provided to the Economic and Finance Committee of the Parliament.

Section 17B requires the Minister to also prepare a performance statement, setting the various performance targets that the Corporation is to pursue in the coming financial year or other period specified in the statement and dealing with other matters as the Minister considers appropriate. The performance statement is to be reviewed when the Minister reviews the charter and may be amended at any time (following consultation with the Corporation).

8—Amendment of section 18—Accounts

This amendment is consequential on the amendment made by clause 9.

9—Substitution of section 19

Under section 19, the accounts of the Corporation are to be audited at least once a year by two or more auditors appointed by the Corporation. This clause substitutes a new section that requires the Auditor-General to audit the Corporation's accounts at least once each year.

Debate adjourned on motion of Dr McFetridge.