WORKERS REHABILITATION AND COMPENSATION (SCHEME REVIEW) AMENDMENT BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 2486.)

Mr GOLDSWORTHY (Kavel) (16:23): I, too, am pleased to make a contribution to the legislation which the parliament is currently debating. Arguably, this piece of legislation did not necessarily need to come before the house for debate. As we have heard other members on this side of the house, the current legislation, if it was managed and administered properly and prudently, adequately meets the needs of workers compensation and workers rehabilitation, because it was under that legislation that the previous Liberal government operated quite competently. When the previous Liberal government was voted out in 2002 by deals done by the previous member for Hammond and the then leader of the opposition and so on, the unfunded liability was at $56 million, a mere fraction of what we are dealing with today.

A real crisis is before the state in relation to the mismanagement and the maladministration of the scheme. As I said, the previous Liberal government had the scheme under control. The liability was $56 million: it was quite manageable and things were ticking along very well indeed. What figure are we faced with today—$1.3 billion if you add in the public sector liability of $400 million, trending up towards $900 million, almost $1 billion dollars. We have seen this government let the scheme deteriorate to this point. The Premier, the Treasurer and the current minister sitting on the other side of the chamber are responsible for this absolute crisis.

They cannot blame the board. Over the years, the board has raised issues about problems. They have had reports, reviews and a lot of investigation into the scheme, yet they have ignored it. It is typical of state Labor governments, particularly in this state of South Australia; that is, they ignore the problems and the warning signs. The Labor Party, when in government in this state, has form on this: it has history. I will explore some of that history over the next few minutes. Not long after this government came to power in 2002, this issue of WorkCover was raised in the parliament. Some questions were asked.

If we look through Hansard over the past five or six years, we will see how many questions were asked and speeches made concerning this issue. It was first raised not long after the government came into power and we could see the adverse signs starting to trend. Admittedly, the media was not particularly interested in it at that stage. It was really only when a previous upper house member, the Hon. Angus Redford, started raising the issue in the upper house and the member for Davenport, when he was the leader last year, finally got some traction on this in the media and it started to take notice. It is certainly taking notice of the dire situation in which we are finding ourselves now.

As I said previously, what was the government doing over those five plus years to avoid the crisis we are in now? It was ignoring it. It was sweeping it under the carpet. It was hoping it would go away. As we know, history has shown us that these problems do not go away, and that the Labor Party (when it forms government) has serious issues in terms of economic management and managing the finances. WorkCover is just that: it is another part of the financial management of the state.

Let us look at some of the recent history of ALP governments in this state. We have had the Scrimber shambles. It was well before I came here, but I was certainly aware of the issues with Scrimber and the ridiculous deal that the then Bannon government cobbled together—some investments that they thought would bring returns to the state. All that did was lose the state tens of millions of dollars. We had the loans to the Belgium dentists. We were paying them an exorbitant interest rate. The coup de grace, as we all know, was the State Bank. The State Bank was the icing on the cake.

It will take generations of members in this place before the State Bank is allowed to die. Whenever there is an opportunity to criticise any Labor governments now and into the future that will be raised. It is etched into the financial history of this state. That was the icing on the cake. There were warning signs and questions were raised in the house a year or two out from when the final crisis hit. But what did they try to do? They tried to make excuses and sweep it under the carpet.

Mr RAU: I have a point of order, Madam Deputy Speaker. I realise that you indulge members by giving them broad latitude when they are debating a matter before the chamber, but it appears that the honourable member is now moving into something of an inaccurate historical perspective, which does not appear to have any relevance at all to matters before the parliament. I object on the basis of relevance.

The DEPUTY SPEAKER: I ask the member for Kavel to return to the bill under consideration at present.

Mr GOLDSWORTHY: Thank you, Madam Deputy Speaker. I was merely trying to demonstrate the history of the government in terms of managing the finances of this state. The point is that this government has brought about the crisis with WorkCover and the situation in which working men and women of South Australia will find themselves as a consequence of the crisis.

It was only yesterday that the Treasurer made an announcement that there is a potential $120 million deficit in revenue in his budget; and he gave a ministerial statement, as he usually does in this place. It was more of a warning to his own front bench, his own ministers and his back bench to say, 'What you might have put up in the bilaterals through the budget process, I'm sorry guys, but what you want is really a wish. We do not have the money to meet your needs.' He has said that the subprime market is the reason for the effect on equities. The reason for that is poor lending practices and poor financial management, and people not being able to manage their business properly, which is in direct comparison to the way in which the government has mismanaged the WorkCover issue. It comes back to poor lending practices within financial institutions, particularly in the United States.

As we know, in the late 1980s, early 1990s, we in Australia suffered a similar situation. At that time Australian financial institutions embarked on some poor lending practices, and the result was that the share price of some of the major banks plummeted to catastrophic levels. I recall that Westpac Bank posted two successive losses and the ANZ Bank posted a loss as a result of those poor management practices.

I want to make some comparisons—and I do ask for some indulgence here, Madam Deputy Speaker. I understand the point of order the member for Enfield raised, but my examples go to the core of Labor governments' management of financial matters. I want to make a comparison with the federal scene and the current dire economic situation we face nationally, with spiralling interest rates and spiralling inflation. It seems a coincidence that since the federal election and the change of government from Liberal to Labor, all of a sudden these problems have beset us.

A number of years ago when Peter Costello was treasurer we saw an economic meltdown in the Asian region. Because our economy was strong and Costello was managing the economy and managing the budget well, had sound practices and principles in place, the nation was able to withstand that economic meltdown in our region. It is hypothetical because the Liberal Party is not in government, but I would say that if the Liberal Party was still in power federally the country would not be experiencing the tough economic times that it is. Obviously, that is a point of debate and discussion and it is hypothetical. I understand that. However, history proves that if you are sound in managing your money, if you are sound in administering financial matters, then things flow. It is no different from business—and government is like business.

Members on this side have owned and operated businesses. I do not know how many members on the government benches have owned and operated their own business. We have farmers, veterinary surgeons, furniture manufacturers and senior partners in law firms, all of whom have made decisions in relation to financial issues. It comes back to the principle that if one does not manage one's money correctly then one will be in real trouble; and that is what we are experiencing now. This government is not managing its finances correctly.

As I said, the Treasurer came in yesterday and made a ministerial statement saying he has a hole in his budget of $120 million, and therefore the budget processes of the other ministers are basically out the window. So it is vitally important that when the warning signs are there, the warning bells are ringing and the alarms are going off, as has been the case with WorkCover for a number of years, remedial action is taken at that time. It cannot be ignored. As I said, we saw the outcome of the State Bank situation: it basically bankrupted the state. People say that the Victorian economic situation was the worst in the country before Jeff Kennett came to power but, in actual fact, if you look at the situation accurately, South Australia was in a worse financial position than Victoria.

The only reason that situation was remedied was the quite unpopular public policy decision the previous Liberal government took in leasing our electricity utilities for a long period. That unpopular decision is the reason for this state pulling itself out of the economic doldrums. That is the only reason we currently are enjoying a AAA rating.

The DEPUTY SPEAKER: Member for Kavel, can you start on the WorkCover issue, please?

Mr GOLDSWORTHY: Thank you, Madam Deputy Speaker. I want to highlight that it is all about financial management, financial administration and understanding that corrective action needs to be put in place before a crisis hits us. We are in crisis, and that is why we have this legislation before the parliament.

It is our position, extremely well articulated yesterday in the house by the state Liberal leader, that it is Labor's mess. You have got yourself into this problem. The Premier, the Deputy Premier and the minister sitting over there: it is your responsibility. We are in this mess because of you. Nobody else. It is not the board's problem and it is not the board's fault. It is your mistake. We are not, as we have on many occasions, looking to fix up your mess and looking to amend scrappy legislation. We are not getting you out of your mess this time. You have made your bed and you have to lie in it. That is the situation. When we go to the next election we will come up with our own policy direction in relation to WorkCover and a workers compensation scheme. The government has made this mess, it is of their doing and it has to fix it.

Mr PISONI (Unley) (16:40): The opposition has obviously indicated that it is not opposing these changes—but, of course, that means we will be voting for it but we are not opposing it. I found it amusing to hear the member for Enfield this morning suggesting that it was outrageous that we would not bring amendments into this bad legislation, as if it is our fault. This is not our fault. This is the fault of the minister, minister Wright. There are three things that should be done in order to rectify the whole WorkCover system in South Australia. This is a Labor legacy of the mid 1980s, do not forget. It was the minister's very own father who introduced this no-blame legislation, this no-blame workers compensation scheme for South Australian workers.

I suppose in those days Labor politicians were more interested in the rights of workers than they are these days. These days it seems to be that religion plays a very big part in the decisions of the Labor Party. However, it would be even harder to suggest that some of the acts that occur as a result of this legislation would be Christian.

However, I digress. What we need to do to fix this legislation and fix this WorkCover system is, first and foremost, to sack the minister. The minister has been absolutely outrageous in his denial that there has been a problem with this system. Just remember that he will blame everyone else but himself. He will blame the board that he appointed, the CEO whom he appointed, and the legislation that he has been presiding over for the past six years as minister, but he will not blame himself. And this is not the first time the minister has denied any sort of responsibility. We saw what happened when he was in charge of water. He even had difficulty understanding his own water restrictions, so I can understand that maybe he does have a problem understanding the WorkCover legislation. Maybe that is what the problem is.

We heard the member for Enfield saying, 'You guys can see this is bad legislation, but you are just standing there letting it go through.' Well, this is not our mess. We will fix this mess. We will develop our own legislation, our own WorkCover scheme, that we will take to the next election. We will put it against yours and let the people decide who can run workers compensation better in this state: the Labor Party or the Liberal Party. We have a record of running an effective workers compensation program.

We had the unfunded liability under control. We had more workers going back after being rehabilitated than this government has had. We managed under the same rules that this minister cannot manage under. It certainly would be interesting to sit around some of the dinner tables or lounge rooms and hear the conversations of Labor members and their trade union partners and friends. We have the trade union movement out there saying that this is a terrible situation for workers.

Mrs Geraghty interjecting:

Mr PISONI: I note that the member for Torrens is interjecting. We have the trade union movement telling us that this is a terrible situation for workers and we have the government telling us that this is great legislation. 'But, hang on, you guys over there with a business sense can see that it is not going to work, you can see it is not going to fix it, come and fix it up, where are your amendments?' 'Where are your amendments?' they are saying. The member for Enfield said that in his speech today.

When we deal with this mess, when we are in government—and we will not hide things for 14 to 16 months like the minister did. We saw the Labor Party and the trade union movement planning a big campaign against the Howard government based on workers' rights and, at the very same time, they planned to cut workers' entitlements, but they did not tell anybody about that. As a matter of fact, I think the minister was running around telling everybody, 'No, don't worry about it; we are not going to cut workers' entitlements.'

I think I heard some radio about that. One of the trade union officials was saying that he had had an assurance from the minister, and he believed the minister because the minister was 'a man of his word'. That is what this trade union representative said. So, I wonder just how well he knows the minister, because what we see today is cuts to workers' entitlements—the very thing that the trade union movement fought against at the last election. The only difference is that at the last election they were perceived cuts; in this legislation they are real cuts. That is a big difference.

Mrs Geraghty interjecting:

Mr PISONI: I have always been a supporter of the workers. I am a worker myself, member for Torrens. The only difference is that, with the skills I developed on the factory floor, I went and started my own business. I did not fall for the three-card trick: thinking that I needed somebody else to be in control of my life and so I needed to join a trade union. I did not fall for that.

I think we should probably talk about some of the detail of the legislation. The importance of early positive action is recognised in the bill but it is not followed through with any changes to rehabilitation practices. Section 32A is a provision for the payment of medical expenses after initial notification of disability even before a determination is made about compensation.

Section 29 of the bill provides for the insertion of part 4, division 7A, which is a similar provision for the commencement of weekly payments after the initial notification of disability and before formal determination of the claim is made. It is curious, though, that there is no similar express provision to allow for the provision of rehabilitation services in similar circumstances.

Proposed new sections 35A, 35B and 35C are likely to have the greatest impact upon benefits currently being claimed by injured workers. These provisions seek to draw a distinction in the way in which workers who are totally incapacitated for work are treated in comparison to workers who are partially incapacitated for work. The difference is most dramatic at the expiry of what is referred to as 'designated periods'.

In circumstances where a worker has no current work capacity, and that is likely to continue indefinitely, the worker will continue to receive weekly payments at the rate of 80 per cent of the notional weekly earning rate. In practical terms, there should be no difference from the way such workers are treated at present.

However, in the case of partially incapacitated workers, section 35B(1) provides that, at the end of the designated periods, weekly payments of income maintenance will cease; that is, unless the worker establishes total incapacity pursuant to 35B, or brings himself within section 35C(2) in cases of partial incapacity. To bring himself within section 35C(2), the corporation needs to be satisfied that the worker is in employment and the compensatable disability is likely to continue and the worker is likely to be indefinitely incapable of undertaking further or additional employment or work which would increase the workers current weekly earnings.

It would seem that the aim of the provision is to provide a strong incentive for partially incapacitated workers to secure at least some form of part-time employment within the first two and a half years of incapacity. However, there is the potential for anomalies. What if the worker was not undertaking part-time work in consequence of an employer, when the worker has sustained an injury, unreasonably refusing to provide such duties? What if the worker is doing everything that could reasonably be expected of him to secure such employment but cannot?

What about the situation of a worker who, on medical advice, will forever be confined to working no more than 20 hours per week? Why should his entitlement to top up the weekly payments be dependent upon whether he can actually find work matching his capacity?

Why is there a reference in the heading of section 35C to 'current work capacity' when the definition of 'current work capacity' refers at present to inability arising from compensatable disability, and not a return to the employment undertaken at the time of the disability, but being able to return to work in suitable employment? And 'suitable employment' is then defined to be work that the worker is suited for.

What if a partially incapacitated worker is performing some part-time work and the employer terminates his contract of employment in circumstances which are harsh, unjust and/or unreasonable? Why should that employer's inappropriate action have the result of an innocent injured worker losing his entitlement to weekly payments of income until he can find another suitable position of employment?

These are all questions that I am hoping the minister might address in his reply to the second reading speeches. When looked at as a whole, there seems to be an underlying assumption that the only reason why a worker would still not be performing some work 2½ years after their injury is a lack of desire on the part of the worker to find work.

I am not sure that I have come across anybody who enjoys being on workers' compensation. I know that there are probably some out there who will go for a ride on WorkCover. They may have a very unsatisfying job, not a lot of motivation to go out and look for something else and not a lot of motivation to actually increase or explore their potential in life. However, I think it is unfair to suggest that that is the norm for workers who are on disability. Remember, this is a no-blame workers' compensation system.

So, there is nothing in the legislation to strengthen the role of the rehabilitation consultants so far as to provide a practical means of assisting such workers back to work. It is claimed that the partially-incapacitated workers are a substantial drain on the fund and yet there is no clear current incentive to employ such workers. That is something that is a big issue for small business in particular. There is no incentive.

I had a situation many, many years ago when my business was only a few years old and I was quite new as an employer. I always had the view that I was not terribly interested in somebody's history when I was going to employ them. If they had made a couple of mistakes in their life or if they had had a blue with a previous boss, I did not see that as being an issue for me. I was always happy to make a fresh start as an employer. It is a risky strategy, I know, but I like to live on the edge.

I did pay the price for that strategy back in about 1990 when I employed somebody in the French-polishing field who looked as though they could do the work really well—and they could do the work really well; they were a very good tradesman. However, it was obvious that they did not enjoy the work. I did not ask them if they had any previous WorkCover history. Within a couple weeks of being employed by me, I had a WorkCover claim for RSI.

RSI is an interesting ailment. A doctor said to me many years ago, 'It's interesting about RSI, David; it's about the only ailment that is diagnosed by the patient. They come in, make an appointment to come and see me and I'll say to them, "What's the problem, patient?" and the patient says, "Doctor, I've got RSI."' That was the situation that I was hit with, unfortunately. Because it was a recurring injury, I was the one who was punished.

Mrs Geraghty interjecting:

Mr PISONI: Did you self-diagnose your RSI, member for Torrens?

Mrs Geraghty: No.

Mr PISONI: Well, that is my point. The member for Torrens did not self-diagnose her own RSI. The doctor diagnosed it, I suspect?.

Mrs Geraghty: Several doctors.

Mr PISONI: Several doctors. We have confirmation from several doctors that the member for Torrens has RSI. I congratulate the member for Torrens, having had RSI and then finding an occupation that she could do with RSI. It is great having a secretary and a PA and all that sort of thing. You do not have to do all that writing. I am enjoying it.

The point I was making was that I was an employer who took somebody on in good faith, and yet I had an ongoing WorkCover claim that went on for months and months that was a recurrence of a claim that this employee had had previously. Small business is a learning exercise; every day you learn something new in small business.

One of the things you learn very quickly in small business is that there is probably no other type of occupation that is more stressful than small business, and I must say that I agree with that. A number of people comment to me, 'David; you are in the parliament there. You are a local member and a shadow minister; it must be a stressful position.' I say, 'No; you obviously haven't been in small business. If you think being an MP is stressful, you haven't been in small business.' Small business is the most stressful thing—and I do not exclude farmers from that. In small business you have to worry about customers; as a farmer, you have to worry about the weather as well.

Mrs Geraghty interjecting:

Mr PISONI: Worrying about constituents is a very easy thing. Well, I don't worry about constituents, because I help them. When you help them, you don't have to worry about them.

Mrs Geraghty: A strange philosophy.

Mr PISONI: A strange philosophy, the member for Torrens says. I help my constituents, and it is a strange philosophy. I can understand that. It is probably why so many Labor members do not live in their electorates.

Then we have section 35C, which refers to the issue of working capacity being referred to a medical panel. There is a danger of confusing a medical opinion about suitability for work on medical grounds and incapacity for work. Incapacity for work in the relevant legal sense is a reduction in one's ability to sell labour from the open labour market. In cases like Yacob, the High Court decided that a worker who, in his usual job, did not have to climb stairs and his only real restriction in working capacity generally was in relation to a job which involved the climbing of stairs, nevertheless had a partial incapacity for work.

Workers who have retained the ability to undertake some duties, but of such an unusual type that it could not be expected that any employer would realistically tolerate the restrictions, can, as a matter of law, be considered to be totally incapacitated for work rather than particularly incapacitated for work. Decisions refer to the so-called 'odd lot' category of total incapacity for work. These are legal concepts which would not readily be understood by medical practitioners. I believe these are very interesting points. Are we now asking medical practitioners to actually make judgments of law in this situation? It is difficult to understand why such legal concepts would be allocated to medical practitioners to determine. I have enormous respect for medical practitioners.

Time expired.

Mr GRIFFITHS (Goyder) (17:01): It is a pleasure to make a contribution to this debate, and I acknowledge and commend the shadow minister for his efforts in debating the bill yesterday. I believe he spoke for about 3½ hours—

Mr Bignell interjecting:

Mr GRIFFITHS: No, I tried to listen to it as much as I could. I actually thought it—

An honourable member interjecting:

Mr GRIFFITHS: No; it reflected the comments and concerns that have been coming to the opposition from the community at large about what WorkCover will actually do. The shadow minister has a rather interesting way of describing the challenge of dealing with this important bill after only holding the portfolio for a relatively short time, but I am too shy to express to the house how he has expressed it to us. However, I think he has risen to the challenge pretty well.

The member for Morphett and other opposition members who have spoken have certainly demonstrated their passion and commitment for the needs of the 775,800 workers in South Australia. The shadow minister has taken the time to read into Hansard the comments that we, in opposition, have received. We have consulted (as extensively as we could within the time limits available to us) on what South Australians have said; it is a shame that the same cannot be said of the government. That is the reason the unions, the organisations that have worked so hard to help get the Labor Party elected into government, are upset and the reason they marched on the streets of Adelaide to Parliament House yesterday.

No doubt WorkCover is a monumental problem for the government—indeed, for all South Australians—as it impacts on the productivity of our workforce and on the competitiveness of South Australia nationally and internationally. Far too many injured workers are on WorkCover beyond what would be expected for a normal recovery period, while the average WorkCover levy rate of 3 per cent is the highest in Australia. The Liberal opposition recognises that this has been a problem since Labor took government in 2002, and I am advised that the unfunded liability has increased from a figure of $56 million when the Liberals were last in office to the 30 June 2007 figure of $843.5 million.

This liability has increased, and each year we have continued to ask questions on behalf of all South Australians. However, each time we have received an answer from the minister that talked about the new board, the new CEO and about how the unfunded liability would be brought under control. Well, in spite of the minister's words nothing has happened; in fact, the unfunded liability has become far worse. Sadly, the return to work rates (which I believe are the really critical point) also continue to be a disgrace—indeed, they are the worst in the nation. South Australia did not need words from the minister; it needed action and it did not get it.

This is clearly a government stuff-up. We should not be here this week debating this bill at all; something should have occurred long ago to fix the problem. Get the WorkCover scheme back to a level where the funds and investments equal the liabilities, get workers back to work as soon as possible and reduce the cost to South Australian businesses. The minister and the Premier must accept responsibility for this. Their poor performances have let down South Australians.

The government has made a mess of WorkCover over the past six years. It has never dealt properly with the issues and this bill is a poor attempt to fix them. Indeed, by submitting some 13 amendments (I understand) to the opposition the government has recognised some of the flaws of its original bill. However, people have seen through this last-minute effort and now know that this government has no idea how to manage workers compensation in this state. It is clear to me that the backlash against Labor at the 2010 state election will be enormous, and many on the other side of the house will need to find a new career from 20 March 2010.

No worker tries to be injured at work, but when it happens they expect to be looked after financially and to be rehabilitated so that they are back in the workplace and able to have a normal life again as soon as possible. Sadly, this is not happening. Not all workers get the support they need to get work-ready again and these people stay on WorkCover. They do not get the rehabilitation they need, they continue to receive financial compensation, and, in many cases, they also lose their self-esteem and are stigmatised—all through no fault of their own.

Before entering parliament and local government I had 120 people working underneath me at my last employer, and workers compensation claims were made. It was sad to see in some cases that, while every effort was made to rehabilitate people and get them back into less physically stressful positions so that they were able to be part of the workplace again, it could not always happen. I know of a case from when I was general manager of a shire in New South Wales where one chap, a good bloke and a good worker, injured his back at work and the only relief he could find was walking the streets. Now, he did that 20 hours of the day. I know it put a lot of pressure on his relationship with his wife, but I am advised that he has managed to seek a redemption and has rehabilitated himself to some degree.

I also had a great frustration with my last employer when one bloke, who came to work at that council with an ankle injury that was identified as part of the pre-employment medical, subsequently put in a claim after his casual employment had finished. The council was joined in the action by his previous employer, where a redemption figure was offered in the very high tens of thousands. I said that I did not want this payment to be made, I wanted the case to be investigated; however, the payment was made and this chap is back out there. He had a smile on his face and he was rubbing it into everyone. So, we have to get redemptions right, we have to get rehabilitation right, and we have to make sure that workers get healthy again.

I also want to briefly relate the history of a chap who lives in one of the 70 communities of my electorate who asked me to come to see him at his house, which is actually a caravan in the Copper Coast area. This guy had worked in the mining industry and had suffered a back injury eight years ago. He told me quite explicitly that he had been enormously mucked around by his employer and WorkCover. He sought a redemption. The redemption they offered him was far less than even one year's employment. This was very much an angry man. He was in my face; he was trying to intimidate me. He wanted assistance, but he was just so angry that he could never actually develop a relationship with anyone well enough to get that sort of help when he needed it.

There was a story about bikie shootings at Paskeville a few months ago. That chap resides quite close to Paskeville, and I initially thought that if someone had shot someone in that area it would be that bloke, because he was so angry that it would not have surprised me if it was him. Thank goodness it was not, but that man needs as much support as he can get. He does have skills; he is only about 30 years of age, and he should be out there in the workforce.

Anyone who has been involved in managing staff knows that, for workers compensation to work, rehabilitation and return to work is the key. The question that we ask is: why has it been so poor? Is Labor so far out of touch that it does not notice? The WorkCover board knew that things had to change and made a series of recommendations to the government in late 2006. What did the Premier, the minister and the government do? Did they act upon them? No, they did not. They decided to instigate another review—the Clayton Walsh review—but delayed the delivery of the report until after the federal election on 24 November.

I came to this place thinking that governments and the opposition must always make the best possible decisions—not the easy decisions but the hard decisions and, obviously, the right decisions. This Labor government decided that, yes, WorkCover needed some changes, but 'Let's wait until after the November 24 election. Let's try to get federal Labor elected, and then we will do something about it after that.' To me, it has been the most blatant political decision that I have seen. I am only new, but it is disgraceful.

Members interjecting:

Mr GRIFFITHS: And members on the other side expressed an opinion in agreement with that.

The Hon. S.W. Key: The kids overboard, the Tampa? Remember that?

Mr GRIFFITHS: Well, I was not involved then. All I can say is that, in the time that I have been here, it has been the most blatant political decision. I understand that politics is the art of compromise. I do appreciate that, but WorkCover, I think, has been a disgraceful example of it. Delays bringing in this change will only cost.

The unfunded liability grew by something like $130 million from 2005-06 to $843 million in 2006-07. We know now that, with the subprime investment market collapse and the negative returns on in the past three months investments in the past three months, it is likely that the unfunded liability will grow out even more. In his contribution yesterday, the shadow minister confirmed that the actuarial figures on the new level of unfunded liability should be out very soon; so we all await them, but I await them with a lot of sadness, because I am fearful that it will be more of problem than South Australians could possibly imagine.

In answering questions yesterday about the negative returns on state funds and the management and investments, the Treasurer indicated that, over the past five years, the positive return on investments has been in the range of 11 per cent on average. Amazingly, over the same time, the level of unfunded liability has grown by over $500 million, or half a billion dollars. This is in a period of near-record continued growth.

Obviously, WorkCover does have a lot of funds under management. It has an investment strategy that is designed to ensure the greatest possible return. While those funds are actually receiving a benefit for the scheme and helping to reduce unfunded liability, to me it seems as though the management of WorkCover has created a situation where we are now seeing WorkCover's unfunded liability grow out to $843 million and potentially in the billion-dollar range that everybody talks about. We have to do something about this.

It seems to me that the Rann government has been asleep at the wheel when it comes to the management of WorkCover. South Australians deserve a lot better than this, and workers compensation really does demonstrate it. WorkCover is responsible for 65,000 registered employers, with 500,000 employees. Sadly, it is letting those people down badly. Self-insurers are a different case. There are 275,000 who work within the 74 self-managed insurance schemes, and the state government's 95,000 odd employees are also within that figure.

I know a little bit about the local government scheme. Local government has something like 7,000 employees in the 68 councils across the state. It operates a very good scheme that has been in existence for probably at least 20 years. It has the opportunity, based on the claims history of each council, to make bonus payments or, indeed, to charge penalty payments where there is a poor claim history, but it works. It has better than average return-to-work figures. It is not just a mickey mouse scheme that audits itself. WorkCover auditors come in, I think, every three years, when they identify councils across the state that they want to audit. The process is quite stringent. I have been involved in it twice.

The worst performing council is deemed to be the average of the industry, and heaven help anybody who lets it down, because if somebody fails it means that all 68 fail, and then you have a lot to pay for. Local government puts a big effort into ensuring that its workers compensation is managed as well as it can be. Certainly, I know that CEOs are responsible for it legally; it is included in their employment contracts, and they had better make sure that they are supportive, because if they are not they will not last in their jobs too long.

The self-insurers are showing the way. Why is it that WorkCover, with an $843 million unfunded liability, and the state government, which, we are advised by the chairman of the economic and development board, has a $400 million claim liability, cannot get it right? Self-insurers operate under the same legislative requirements as WorkCover, but they are getting a right, with liabilities covered by investments that they hold. The government and the minister need to learn from what the self-insurers are doing. They need to make sure that they actually take on board all the good things that happen within self-insurance agencies and that they adopt it as part of the policy for WorkCover and, indeed, the government's management of its own work injuries.

I am pleased to be advised that, amongst the amendments that are introduced by the government, there has been the removal of the proposal to increase the levy cap from 7.5 per cent to 15 per cent. I just could not believe when I saw that, especially with the threat of a 50 per cent penalty on top of that for the poorly performing employers. I would never deny the fact that the poorly performing employers, when it comes to their claims history, need to make sure that they get their act right, but to suddenly increase from a 7.5 per cent cap to a 15 per cent cap, which in many cases would nearly make some employers unviable when it came to being competitive within their industry, truly amazed me. That is one good step that the government has reacted to and in which it has instigated some change.

I am, however, amazed that the legislation does not fix up things such as the fact that superannuation contributions, which under the legislation are required to be made by the employer in the range of 9 to 10 per cent for each employee on their behalf into a superannuation fund, are included when calculating the levy, but when a worker is unfortunately injured and on worker's compensation they do not receive any superannuation contributions. I have had contact from probably half a dozen people in my electorate who are unfortunately on WorkCover. Those people want to get themselves right and want to get back into the work system as quickly as possible, but when they look at the benefits they receive they have been very upset that there is no superannuation contribution.

I also note that the member for Mitchell has presented to us something like 91 amendments that he is suggesting with respect to the bill. Obviously, the committee stage of this bill will be immense and will consume a lot of time. However, I respect him for what he is doing. Let us hope that some of those amendments will be supported.

Another thing that I have also noted (and, again, it has come to me from constituents within the electorate) is that, while the WorkCover levy includes payments based on wages paid to people over the age of 65, if a worker over the age of 65 suddenly falls injured in the workplace and goes onto WorkCover, he does not receive a benefit. That perplexed me, because it would seem appropriate to me that, if it is good enough to ensure that the wages paid to that person are included within the levy calculation, if that person is still working he should receive the benefit of the insurance that his employer is paying on his behalf.

In the portfolio committee that I have sat on with quite a few of the other opposition members, we had a very detailed session for nearly a full day two weeks ago. Presentations were made by the Printing Industries Association, Dr Kevin Purse, the self insurers association, SA Unions, Business SA, the Australian Lawyers Alliance, the Master Builders Association, the Engineering Employers Association, the Motor Trade Association and the Public Service Association.

Mr Venning interjecting:

Mr GRIFFITHS: Yes. While I think it is fair to say that not everyone who presented to us held the same position on the government bill, we were surprised that, overwhelmingly from some of the larger groups, there was a very definite push for the Liberal opposition not to get in the way of the bill. They were giving it marks of something like 6½ and seven out of 10, but they wanted the bill to pass as quickly as possible; they did not want us to hold it up. It is interesting now that subsequent amendments have come through from some of those groups. One cannot win sometimes. I also note that the recent full page advertisements in The Advertiser supporting this position as it was put to us have been out there—

An honourable member: In block letters, 'Do it now.'

Mr GRIFFITHS: In block letters, saying, 'Do it now.' The people who are contributing to those advertisements must have spent in the range of $100,000.

An honourable member interjecting:

Mr GRIFFITHS: Yes, and then we receive amendments from them. It is very confusing. They are saying, 'Get it through the parliament as quickly as possible,' but it is important that debate occurs and that all of us have the opportunity to put on the record the concerns we have about the bill. Certainly, the shadow minister has done an exceptional job of that.

I want to come back to a point that I made at the start. Case management and rehabilitation really is the key. WorkCover must get it right. If it does, the returns to work will improve, and we all know that the returns to work need to improve. I am advised by other learned people that, over the next 10 years, South Australia will need something like 340,000 workers to replace the large number of baby boomers who will retire within the next 10 years, and also for the jobs that will be created through economic development. We have a population of about 1.6 million.

Our population is increasing by the 10,000, 15,000, 16,000 range each year. However, unless we look to ensure that we place every physically able person back into the workplace, it will affect the productivity and the future of our state. That is why rehabilitation has to be one of the keys. If we get that right, the unfunded liability will decrease and then the potential will exist to reduce the levy rates. We would all like to see that, because it makes our state more competitive, it allows business to ensure that it can bid against interstate companies that operate under a workers compensation scheme that has a far lower levy rate and it will allow South Australians a better future.

Without an emphasis on case management and rehabilitation, South Australia is destined to continue to have a scheme which does not work, which does not get people well and back to work again and which costs far too much. Remember, the self-insurers are making it happen while operating under the same rules. The question that we have continually asked is: why is it that WorkCover cannot do the same?

Make no mistake: this legislation affects every South Australian. We have heard a member from the government side talk about it affecting those families and people who are injured. However, it is more than that. Everyone is covered under the legislation, so it affects all of us. This is not legislation that affects just a few; it affects all of us. It will have an impact on young people if one of their parents is injured at work. It will have an impact upon those who are retired if one of their younger or still working relatives or friends is injured at work. It affects all of us. Sadly, this legislation does not provide the answers that are required. Let us hope that, after the deliberations and contributions from all members, and after consideration of the amendments from the minister and others, we get a WorkCover bill that reflects the true needs of South Australian workers, because they need all the support that they can get.

Mr VENNING (Schubert) (17:20): I rise to partake in this very important debate in this house with respect to WorkCover. It is quite clear that the WorkCover scheme is in dire straits here in South Australia, and it needs to be fixed. We on this side of the house have repeatedly warned the government, over the past six years that it has been in office, about the unfunded liability growing out of control, but no notice has been taken until now—and we have heard from the previous speakers. It was amazing, because the problem was getting worse every minute of the day, and the government did not address it. Now the problem is huge. We do not know the exact figure, but we are predicting that it is over $1 billion today. It has to be fixed.

Due to the Rann Labor government's inaction and inability to deal with the problem in the early stages, South Australia's WorkCover scheme has now reached crisis point. It seems that the state government has dealt with the escalating problems of WorkCover in a very similar way to the way in which it has managed the state's water crisis. After years of warnings about the water crisis and requests by the opposition to build a desalination plant, late last year the government finally decided that the water problems of the state would not go away and that maybe it should slowly start the ball rolling in order to deal with the problem.

That is exactly what we are seeing again with respect to the WorkCover situation. We warned the government to deal with the unfunded liability escalation and to improve support for injured workers, yet it is only now, when the problem is so big, that the Rann Labor government has realised that it will not go away and is attempting to deal with the situation—and in a pretty ham-fisted way, at that.

If the government had reviewed and reformed WorkCover earlier and prevented the unfunded liability from amassing to the total it has, then the reform may not have had to be so severe or drastic and workers entitlements would have been protected and not up for review, as they are now. As my leader said yesterday, this bill is Labor's solution to Labor's mess. It certainly is: you walked into this with your eyes wide open. Let me refresh some figures in our minds. I am sure my colleagues have referred to them—and they have—but I think these numbers illustrate the government's total incompetence regarding WorkCover.

We need reminding that WorkCover is protection for the people whom the government purports to represent. WorkCover's unfunded liability in June 2002, when we the Liberals were last in office, was only $56 million. Yes, it is a lot of money—$56 million—but, as the Treasurer said today, it is only two per cent. As of June 2007, the total unfunded liability stood at $843.5 million. Members know, with the government's own unfunded workers compensation scheme, that is automatically over $1 billion; and tacking on the 12 months since we have had the figures, it is not unrealistic to think that this could be now blown out to $1.3 billion. If those figures are not indicative of the state Rann Labor government's complete mismanagement of the WorkCover scheme, then I do not know what is.

I note the member for Davenport's earlier comments about the minister's involvement and the government. I am amazed that the minister has remained in that position for this long and overseen this total debacle. The problems with WorkCover have been compounding ever since the Rann Labor government was elected to office in 2002, in fact, the very minute it got into office. It is also curious to see the increases in the unfunded liability have still occurred over the past years, even though levy revenue has increased and WorkCover claims have decreased. I think that, as pointed out by my leader at the end of February, it is interesting to note the comments made by Premier Rann, the then leader of the opposition in 1995, when we tried to reform the WorkCover scheme.

The press release released by the then opposition leader Rann was entitled 'Liberals must recognise the human cost of their WorkCover cuts'. Well, Premier, if you compare the reform that we were trying to carry out then to the changes you are proposing now, you will see that we were offering workers a much better deal. The changes proposed back then sought to cut the entitlements to injured workers by 15 per cent over 26 weeks, whilst the reform being proposed now in this Rann Labor government's WorkCover bill seeks to cut benefits by 20 per cent after 13 weeks.

Which is better for workers? You do not have to be a great scholar to work this one out, do you? There is a huge difference. Premier Rann in 1995 said:

The Liberal's WorkCover laws would force these people [injured workers] on to pensions, a situation that would see them lose their homes.

Whilst it may appear at first that Premier Rann has forgotten the position he took in 1995, I do not believe this is so. The truth is that the Labor state government has got in so deep with the unfunded liability growing out of control that it has no other choice but to implement the cuts to injured workers' benefits that it is proposing.

It got itself into this mess over the past six years. I wonder how long the injured workers of South Australia will have to wait until it is fixed. On 13 August 2002, minister Wright said:

We are dealing with financial matters relating to WorkCover and the progress of the review of workers compensation.

However, the government has not tried to fix the problem until this bill nearly six years later. For six years, the ship has being going down steadily, leaking all the time, until reaching this situation. One must ask why it has taken so long.

As I stated in my opening remarks, the Liberals have been continuously warning the government that the unfunded liabilities of the scheme were spiralling out of control, but to no avail. Until recently, when Premier Rann and minister Wright had an epiphany and came to the realisation that the system is not only struggling a little bit but it is absolutely failing to cope and is at risk of severely damaging the South Australian economy. When you have a debt of this magnitude—over $1 billion—it certainly does.

This is the way that the State Bank went. Yes, we can say that it is not the State Bank, but it has every chance of being a mini State Bank from the way it has been going. In this house on 18 September 2003, the now Leader of the Opposition warned the state government and said:

I express my alarm at the minister's mismanagement of WorkCover, the unfunded liability of which has exploded under Labor from $85.98 million to over $400 million, while the health system index for WorkCover has toppled from 116 per cent to 59 per cent.

On the same day, the former member for Morialta (Hon. Joan Hall) said, 'I will also mention the looming disaster that is about to engulf WorkCover.'

Again on 23 June 2005, the then leader of the opposition (Hon. Ian Evans) voiced concerns by saying, 'It is time that South Australia woke up and realised that WorkCover is in trouble.' He went on to say:

To give you an indication of how bad the state government is going, the liability in relation to the Public Service has blown out to $308 million (25 per cent). They (the government) are trying to hide what is a big problem for the state—a $700 million unfunded liability sitting there in WorkCover.

On 27 September 2006, the member for Unley referred to the unfunded liability of WorkCover as 'skyrocketing'. The government has seen this coming for a long time, yet it has failed to act. And how often does it have to be reminded and by whom?

On 30 May last year, the Premier finally acknowledged that there were problems with WorkCover. He said:

The government has recognised, following advice from the board, that there are issues within WorkCover that need to be addressed to make it more competitive.

However, it was not until 26 February this year that Premier Rann and the government acknowledged publicly that there were massive problems with the WorkCover scheme and proposed legislation to fix the problem. Premier Rann said:

WorkCover's unfunded liabilities now stand at $843.5 million and at an average three per cent, its levies are amongst the highest and the most uncompetitive in Australia.

We suspect it is now over $1 billion—a debt of State Bank proportions. Why has it taken a nine months' gestation period for the government to propose legislation to fix WorkCover after it acknowledged in May last year there was a problem. I believe it is a very cynical exercise. I believe it is because of the federal election. It is a very cynical political exercise. Premier Rann was hammering the federal government at the time on WorkChoices, yet in his back pocket he had these reforms which would cause workers much more harm. How hypocritical is that?

One must ask whether Premier Rann is putting people or politics first? This debt has gone so far it needs to be pegged back and the injured workers' payments will have to pay for it. When we were in government the unfunded liability ran between $50 million and $100 million—it moved in a cycle up and down—but to be approaching $1 billion is a disaster of State Bank proportions.

We have a proven track record when it comes to managing WorkCover. The government cannot deny that. As our leader said yesterday, the Clayton report acknowledges that 'the scheme began in 2000 in an apparently healthy position with respect to financial stability and a reputation for forward thinking'.

Our party has decided to spend some time putting together our own WorkCover policy, which will be released within the next couple of years. It will be a proper framework, not a hastily put together bill in an attempt to fix years of mismanagement. We have decided to let the government's bill proceed. It is the mess of members opposite and they have to wear the responsibility to fix it. The government should be ashamed of its attempt to rush through this legislation. It is not for us to propose amendments.

I heard the member for Enfield speak today and I was very interested in what he had to say. He is part of the government and it is their mess. I know the member for Enfield wants us to fix this matter. We will fix it—but in two years, after the next election. In the run-up to the state election in 2010 we will tell people, especially workers in South Australia, how we will return the WorkCover scheme to an efficient system.

We will focus on delivery of service to genuine workers without there being a huge impost on employers and businesses in South Australia—even Business SA that supports this legislation even though it says it is only 60 per cent right. If it is only 60 per cent right, why should we stick out our neck when we think that we have to totally rebuild it. Business SA has spent a lot of money on advertising in relation to this bill, and I am concerned about where it is coming from. It has not supported us and our position.

I also note the comments made by the member for Davenport. Members may think that the member was Davenport was thinking outside the square. He said several times that it was not Liberal Party policy. I will not say that it will never be our policy, because on this side of the house we will debate this issue over the next two years. We will leave no stone unturned in order to get the most efficient service for the workers in South Australia and also the employers who have to pay the costs.

I think the answer lies between comments such as those from the member for Enfield and the member for Davenport. I believe that private enterprise could run this scheme if it wanted to do so. If private insurance companies want to take the risk, they should be allowed to do so. Governments do some things well, but I do not believe they administer schemes such as this very well.

It should never have administered such a scheme because there is too much indirection in there. I have employed people over many years. I, too, have been injured. When you go to the doctor you are asked whether it is a work claim or a private claim. If a person says that it is WorkCover, everyone knows what happens. The costs just pile on. If it is not a WorkCover claim it is a different figure; if it is for a self-employed person it is a different figure.

It has been a wasteful, sad saga which is costing genuine people a lot of hardship. There are workers for whom I grieve. I know several people who have been injured in a workplace by a problem which was not their fault. Someone needs to look after them. What will this legislation do for them? It will cause them and their family a lot of heartache because they have been genuinely injured; and that is why the system has been there.

Finally, I want to say it is a sad day. I do not believe governments should be in institutions such as this. Nowadays governments do not have the checks and balances they used to have, whether it be in relation to building roads or whatever. The government outsources many things these days. I am not saying that the government should not be building roads—because I think it should. The government should be watching everything it does, but in overseeing projects I am happy that the government is there as a watchdog. In relation to delivery of service and the taking of risk, I do not believe the government should be in there. Who will worry because the government will pick up the tab and there are often huge blow-outs?

I congratulate the shadow minister. It has not been easy for him because he is a very compassionate person. All of us on this side feel for the victims, that is, the injured workers. I wish we were not in this mess. The government is making a big effort to fix it—well, I wish them the best of luck. The bottom line is that it is the government's mess and it has to fix it. We await the amendments. I understand the government has amendments for us next week; so we will go home for the weekend—

The Hon. M.J. Wright: They are filed.

Mr VENNING: Well, we will consider them on Tuesday. Let us hope that in the end we all bring in a system which is not costing taxpayers millions of dollars but which does cover the core reason for having WorkCover; that is, to protect injured workers. I congratulate the shadow minister and my colleagues on their input. We will await the outcomes of the bill. I warn the house that over the next two years this will be a live issue for members of the opposition. With the shadow minister we will be going through the whole issue again so that in 2010 we can put to the people a new regime of a workers compensation scheme for South Australia, whether it be private, government or a mixture of both. I think we need to look outside the square and where we have come from over the last 50 years in relation to workers compensation and put together a package that actually works, covers the workers and does not cost the taxpayers millions of dollars.

Mr PEDERICK (Hammond) (17:37): I rise today to join my esteemed colleagues and add my contribution to this debate. It is horrifying that after six years the Labor government has WorkCover in such a terrible situation. The only thing it has achieved in six years is to build a tramway that blocks access to this place for us and everyone who works in it and everyone else who wants to access King William Street and North Terrace. We have a water supply that has just about dried up, so I am sure they are investigating emergency desalination procedures for Adelaide—

Mrs Geraghty: Sorry; which bill are you talking on?

Mr PEDERICK: No; I am just doing a few general comments. But I will—

The Hon. R.G. Kerin: I suppose you can talk about the State Bank.

Mr PEDERICK: Yes; I can go back further and get onto the State Bank if you like, and that was the last major debacle that Labor presided over. I would like to get back to the WorkCover debate, and the unfunded liability at 30 June 2007 was around $844 million. This is at 30 June 2007: I would hate to see where it is now, and I am sure it is well over the billion dollar mark. This was after a loss that year of $149 million. The unfunded liability when the Liberals were last in office was only $56 million. I think those figures speak for themselves.

Scheme funding ratios across the country on 30 June 2007 were: 64.5 per cent for South Australia, 103.5 per cent for New South Wales, 134 per cent for Victoria; and 178 per cent for Queensland. These figures were provided by the WorkCover Board, and this shows just how out of step South Australia is in handling workers compensation. The average levy rate is 3 per cent, but many businesses pay up to the present cap rate of 7.5 per cent depending on their industry and work safety record. In regard to average levy premiums, as at the end of June 2007, the New South Wales average levy was 1.77 per cent, Victoria was 1.46 per cent and Queensland was 1.15 per cent. All are well under the average figure in South Australia.

There were 5,040 WorkCover income maintenance claims in the preceding financial year. Active income maintenance claims with a duration of 10 years or more have significantly increased from a figure of 100 in June 2002 to over 400 in June 2007. Long-term claims (injured workers who have been receiving income maintenance payments for longer than three years) account for 28 per cent of all WorkCover claims and approximately 48 per cent of WorkCover claims liability.

Another issue with the management of WorkCover is that there is only a sole claims agent, Employers Mutual, so we have a monopoly interest handling the claims, and I think we would be much better off if we had multiple bodies handling the claims. It is the same with legal services. Minter Ellison Lawyers is the sole provider of legal services. I think there should be freedom of choice there so that we get better outcomes as far as legal requirements are concerned for both employers and employees.

South Australia, as a point of interest, has the lowest return-to-work rates of all Australian states. Under the State Strategic Plan South Australia has fallen well short of achieving the state's strategic plan targets for injury reduction. Joint performance targets have not been met. There was a target of a 4 per cent annual reduction in total new claims for all employers, a 4 per cent annual reduction in income claims per million dollars for remuneration for all employers, and a 4 per cent annual reduction in income claims per million dollars for remuneration for registered employers. In fact, there was a 0.5 per cent increase for all employers to March 2006, which is a figure of new income claims per million dollars in remuneration.

In a press release, as quoted by the member for Schubert, when Mike Rann (the present Premier) was Leader of the Opposition, on 6 February 1995, he commented, 'Liberals must recognise the human cost of their WorkCover cuts.' The then state opposition leader Mike Rann also said, 'The Liberals must recognise the human toll of their draconian WorkCover bill which will be debated when parliament returns this week.' I wonder what the Premier is thinking now when he is proposing draconian laws for the workers of this state.

It is interesting to look at what SA Unions is saying about the proposed legislation, and we all know where a lot of the funding for the South Australian Labor Party and the Labor Party as a whole across this country comes from. I will read from comments on an SA Unions website. 'Defend injured workers' rights' is the call, and it states:

Mike Rann has put a law into parliament that attacks the pay and rights of injured worker. At the same time he wants to give a cut to employer costs. This law will mean that:

Injured workers will have to live on 80 per cent of their wage after only 13 weeks.

Most workers will be kicked off the scheme after 2½ years.

Injured workers will be financially penalised if they want to complain about a decision about their claim.

The amount injured workers receive for loss of a limb or body function will be less and always at the discretion of the WorkCover board.

The unions call for help to keep a fair workers compensation scheme in South Australia, and they acknowledge that they want workers to get back to work safely and fairly and for the finances of the scheme to improve. They have called on their union members to email the Premier and talk to their local member. The unions have launched another WorkCover public campaign, with the launch of radio advertising featuring the human effect on families.

Another press release of 4 March 2008 on the union website regarding the WorkCover bill referred to hidden nasties. SA Unions said that its reading of the WorkCover bill before parliament shows that it contains some hidden nasties. SA Unions secretary, Janet Giles, said that she has taken the time to read the bill and give it careful consideration. She stated:

Despite what the Premier says, it is our understanding that it is in fact retrospective for many workers. It means that, if this bill gets through in its current form, any worker injured for more than 2½ years would instantly have their support cut off. It is our opinion that this bill goes far further than the recommendations in the Clayton report. We are concerned by suggestions that this issue is being run by Deputy Premier Kevin Foley, the Chair of WorkCover, Bruce Carter, and a tranche of WorkCover lawyers, and that Premier Mike Rann may not have been properly debriefed.

Another quote from Janet Giles is as follows:

The bill should be delayed in order for proper analysis, including the impact of any changes on injured workers. It is untenable that such a huge piece of detailed legislation is passed through the parliament without members of parliament, including the Premier, really understanding its implications.

We have heard all the cries of angst from the people on the other side who Ms Giles supports, and who supposedly represent union supporters. A press release in which outraged unions allege that 'Rann pulls a Howard on hurt workers' states:

Premier Mike Rann has abandoned any pretence of fairness and decency in sacrificing the rights of injured workers in order to prop up business profits.

The Premier's WorkCover legislation introduced this week will cut entitlements to those in need.

Meanwhile, instead of measures to ensure business takes responsibility for reducing workplace injuries, it will be rewarded for its ineptitude with a reduction in WorkCover levies.

That is according to SA Unions. SA Unions Secretary, Janet Giles, said, 'This is a travesty.' I think they have read the impact on employers quite broadly where there is a threat of increased premiums to 15 per cent. The following is a telling comment by Janet Giles:

Mike Rann risks being compared to John Howard by workers. He's stripping away their rights in order to appease the business lobby.

He has entirely reneged on his public commitment of last week. On 18 February he told the ABC that 'We basically want to fix WorkCover, we are going to fix WorkCover and we're going to do it in a way that's generous to workers...'

Stripping worker entitlements is the opposite of generous. The clear message from Mike Rann to workers is 'if you get hurt, don't expect this government to help'. What's more, workers will have no legal recourse. He has hung them out to dry.

As I said before, the government's legislation, if not amended, will cut workers' take-home pay by 20 per cent after 13 weeks if they are injured. It will cut workers completely off the scheme after 2½ years unless they are totally incapacitated, and it will significantly reduce lump sum payments for serious injury and missing limbs. There will be a compulsory review of injured workers' incomes every 12 weeks if they challenge WorkCover, and there is no access to common law rights as exists in other states.

The unions actually surveyed 400 people about their concerns and, obviously, like all of us, they were concerned for the workers. Two out of three people opposed cuts to entitlements in order to reduce the cost to business. People were asked: 'Do you think injured workers deserve (a) more support (b) about the same level of support, or (c) less support?' The result showed that 37 per cent want more support and 44 per cent want about the same level of support. That is over 80 per cent of people who recognise the importance of supporting injured workers to rehabilitate and safely return to productive roles in the workplace. Only 1 per cent wanted less support, and the remaining 18 per cent said they did not know. The following is a telling comment by Janet Giles from SA Unions:

This government risks alienating all South Australians who rely on WorkCover as an insurance against workplace injury. The people of South Australia want and deserve the best workplace protection in Australia, not the worst. Mike Rann must think again.

This is the same Janet Giles who has made this tough call representing the unions, but for what? The unions, through Janet Giles, have already admitted that they are so tough that they will still tip millions of dollars into Labor Party coffers to boost their election campaigns. So, what a lot of noise, and for what? Why do they care? Their own party is not even supporting them in this house. That is the whole point.

People condemn the Liberal Party because it is alleged that we are just here for the business community. At least we know who we represent—but we also represent people out there, the workers. We all must realise that employers need a fair go in this, because if employers do not pay low levy rates they just cannot hire employees, obviously. It just gets too hard. It is just another impediment to small business, and there are enough impediments.

If you employ someone who is paying child support, you get constant calls such as, 'When did you write the last cheque?', especially if you only have seasonal payments, like in the farming community. There is no incentive these days for anyone in a small to medium business to employ someone. So, high WorkCover levies is another point that will put people off employing staff. In closing, I would like to say that the union workers of the state need to think about where their membership dues are going, because they are not being represented in this place.

The Hon. M.J. WRIGHT: I move:

That the sitting of the house be extended beyond 6pm.

Motion carried.

The ACTING SPEAKER (Hon. P.L. White): The member for Frome.

The Hon. R.G. KERIN (Frome) (17:52): You look very good in that chair, madam. It fits extremely well. I think that the current Speaker needs to perform well to keep you out of the chair full time. We are here today, as the previous speakers have touched on, to speak about the debacle of WorkCover. I think that it is a very sad day and, as others have said, I think that we certainly should not be here today. It really shows a history of government lack of action, a government which has been in a state of denial over WorkCover, and that has resulted in injured workers having to pay for that government inaction, incompetence and ignorance with the obvious deterioration of the SA WorkCover scheme during the time that the Rann government has been in power in South Australia.

Personally, I am very disappointed that it has come to this. In the period from late 2002 until 2006, I actually asked dozens of questions which should have alerted the government to a whole range of issues regarding the problems which were growing during that period of time within the WorkCover scheme and with the way that WorkCover itself was being managed.

Those questions are documented in Hansard in both question time and estimates committees, and I think that the Labor Party would be pretty happy that I do not have time to read all of those out, because I think that there are some huge reminders there of warnings that were given and warnings which were ignored. Many of those questions came directly from the WorkCover quarterly reports.

I found these reports very interesting, very informative and, really, they rang enormous alarm bells as to what was actually happening to the WorkCover scheme and what was happening with return-to-work rates and a whole range of things, such as workers' consciousness of workplace safety. For instance, in June 2002 for some reason, as a sort of cut, workplace safety ads were pulled, and you can track in the quarterly reports after the pulling of those ads the drop in worker consciousness of workplace safety, and that has then started showing in some of the accident rates.

Really, if people within the government had spent more time reading those reports, then perhaps they would have taken some notice of the questions being asked. They would have been on top of what was actually happening with WorkCover itself, and perhaps we would not be here today having to punish injured workers for the government's lack of action.

Very generously, I shared those warnings with the government at many question times. The response we got was really denial after denial. There was talk about the WorkCover scheme being a mess, and they were going to sort it out and whatever else. Its own report recently showed that WorkCover had actually performed very well up to the period of time when the government changed, and certainly the deterioration has come since the change of government.

As I said, the quarterly reports should have been invaluable. They really did show that there were multiple and severe problems coming about. It really showed that the funding of the scheme was in trouble. As I said, behind that were a whole range of other issues, which were reported in those quarterly reports. There were goals that were supposed to be met. Time and time again nothing went near those goals, and a lot of the time when there were, say, 11 goals to be met, there were eight or nine that they would miss on in a quarter and, really, there were alarm bells ringing loud and clear.

Perhaps to say that there was no response is a bit cynical, because there was one reaction. The government imposed censorship, and the information in the quarterly reports was seriously cut. Those quarterly reports were doing a damned good job of tracking the problems that were occurring. All of a sudden—I am not too sure whether it was to cut my fodder for question time or whether it was to make sure that they did not have to be alerted to what was happening within WorkCover—for some reason the amount of information that was coming in those quarterly reports was seriously cut. It made it a little bit harder: I had to find a few other sources to get information from. It should also have made it a lot harder for the government. Why on earth you would have a system in place which was giving you good tracking of the performance of WorkCover and all of a sudden cut that is beyond belief. I think that it showed that the government did not want to know about it.

As much effort should have been put into fixing the problem as was put into investigating how I was getting information beyond what was actually in the quarterly reports. I had quite a bit of feedback about the number of questions and the amount of investigation as to who within WorkCover might have been talking to me and giving me information. It was not all that hard, because WorkCover was in absolute turmoil at the time.

One of the major reasons for that, and the reason why WorkCover did go off the rails, was the fact that the government made sure that the former CEO, Keith Brown, did not reapply to have his contract extended. It was made clear that that would not be successful, but what followed from there was really part of the problem which has now occurred. What we saw in WorkCover was that it did not have leadership.

We had an acting CEO, and acting CEOs are not really empowered to make the sort of changes that were needed at the time. We had a stand-off as to the appointment of a new CEO, and the delay that we saw actually very much coincides with where I believe that things went well and truly off the rails. I think that is really one of the issues. If you trace the history of this debacle, the fact that we lost a CEO who was running the scheme well, and all of a sudden we did not have a CEO appointed for a long period of time—a ridiculous period of time, actually—really did see the problems exacerbated.

I am very aware of the range of issues associated with this debate, but I will not use privilege to put details of some of the things I have been told on the record. Whilst that would record a messy situation, it would not help the current situation, and basically what we are trying to do here is fix the mess and get back to where we have a funded WorkCover which will look after workers into the future. I am also aware of a range of relationship issues between the minister and the former board which contributed to the problems.

I note that the minister has recently been referring to putting in a new board to fix the problems. Well, the board has now been there for, I think, 4½ years so we can stop calling it a new board. The 'new board' terminology does not take in the reality that the board has now been there for quite some time, and the only real change is that a couple of people have left.

It is very sad that all the denial, mismanagement and incompetence is now to be worn by injured workers. There is no doubt that the government must fix this mess, and I apologise to those who would love the opposition to heavily amend or defeat this legislation. The government has created a situation, through its own denial mismanagement, that must now be fixed for us to have a statutory WorkCover scheme that delivers what we need for South Australia. Whilst I have reservations on some of the measures, I also believe that the government should be given the opportunity to fix the stuff-up it has made, sad as that is. The government's arrogant denials have brought this scheme to its knees and it must be fixed. If amendments come left, right and centre we will finish up with legislation that is enormously compromised, and doing it piecemeal does not provide the opportunity for something to be fixed. Unfortunately for the workers, that is the reality and the government must now be given the opportunity to fix the scheme.

In fairness I must add that, sadly, the Labor Party is not the only one that would not listen to those early warnings. Over a long period of time I was often surprised at media comment made to me that WorkCover was not a story; it was not sexy and was not really of interest to the general public. I am sure many injured workers would not agree with those sentiments, but many in the media did not see WorkCover as worth looking at or running stories on. I raise this issue, and my growing concerns with a range of industry organisations, and must say that I have always found their acceptance of the government's denials at the time somewhat frustrating. For a long time the opposition was pretty much on its own in trying to highlight the problems it saw with WorkCover.

As I said, we should not be here debating why it is necessary to punish injured workers for the lack of competence of the Labor government. Some will ask what is the difference between the parties if the Liberal Party supports this bill, and my answer to that is in two parts. First, the Labor Party is the government; it has presided over this mess and it must now be given both the responsibility and opportunity of fixing it. As I said, that is not normally brought about by legislation which is full of compromise.

You need an holistic approach to resolve these problems and, whilst I am not totally convinced that what is in the bill (or what is not in the bill), backed by management within the corporation, is the best way, it is also very important to try to get this thing back on the rails. At the end of the day it is the government's responsibility, and I do not think it should be frustrated by others in how it goes about trying to fix that. As I said, it is the government's responsibility to fix it; it should be accountable for our current situation and it should be accountable for ensuring that it does everything possible to fix the scheme at the minimum expense of injured workers.

Secondly, a Liberal government would never have allowed this to happen. In opposition, with few resources, we were able to constantly track the deterioration of WorkCover and alert the parliament regarding what was happening. For the life of me I cannot understand why some people in the government could not see exactly same thing happening and, forgetting politics for a moment, follow what was in those quarterly reports, what was in the annual reports over that period of time, what was happening with all the rates within WorkCover and return to work, and whatever. For a long time it was obvious that what was needed was some pretty major surgery to fix the situation, yet nothing was done and we now have the situation we see today.

It appals me that it has taken six years to get to this stage and it is now injured workers—those whom Labor's rhetoric would always embrace—who have to pay dearly for the incompetence and denial of the Labor government over the last six years. Others have given many figures which have demonstrated the deterioration of the scheme, and others have outlined the concerns of those most affected. Since 2002 Hansard records dozens of questions from me and my colleagues, and anyone who wants to go back and look at how all this occurred will see that it is heavily documented in those questions—the problems identified and the denials given. While that is important for history's sake, there is not enough time to read them all—in fact, I will not even quote any of those because I think that, in itself, is a pretty sad recording of what has happened over the last six years.

The quarterly reports are also now historic documents tracking the demise of the scheme, and the reduction of available information within those reports is also an historic record of government censorship of the information available on WorkCover. The more information available on a scheme such as WorkCover the more chance there is of keeping it on track, and I think the censorship of some of that information is, again, a contributor to the sad situation we have today.

None of this is of much comfort to the injured workers. As I said, it is a real pity that what we now have is legislation that, basically, aims to fix the fact that nothing has been done for six years. I feel very sad for the workers who will suffer from that, but we face a situation where, if we are to have a workable WorkCover scheme, we must give the government the opportunity to fix it to ensure that in the future injured workers are looked after. As I said, it is a pity that we are here debating this at all. I believe earlier action would certainly have meant that nothing like this would have been needed to get the scheme back on track.

We also face a situation at the moment, because of what has happened in the share market with a range of investments, whereby, if in fact if there was no action now—say this legislation was defeated—when the actuaries came in again to look at this scheme, and bearing in mind what has happened to the value of and the returns on their investments, the $800-odd million of unfunded liability in the commercial WorkCover side of it would probably blow out enormously. I think that we would be looking at a figure of well over $1 billion because of what has happened to investments.

Beyond mismanagement of the scheme, we would be confronting a figure that would be absolutely scary, and that is why action needs to be taken promptly, otherwise we really will face a very serious situation. Having had a good look at the bill, I am aware of the pain that it will cause some people, but I point out that we are not the government on this side. The government has the responsibility, and I think it has the right to try to fix it. I hope that the measures that are brought in, along with some reform of management within WorkCover itself, will see the scheme return to one that is good for both South Australian workers and the South Australian economy.

Mr PENGILLY (Finniss) (18:08): Listening to the member for Frome (a former premier of South Australia), I cannot help thinking about how irresponsible this current government is, bearing in mind the shocking manner in which this matter has been dealt with. Quite frankly, it is a total bugger's muddle. Why on earth we should be having to deal with this matter of the government's trying to fix up this mess is beyond me. There is just a total lack of responsibility and accountability from the minister. If he were a minister in South America, he would have been shot by now.

It is almost as if we are descending into some sort of state of Zimbabwe. You really wonder where we are going. As many speakers have noted, numerous questions on this matter have been asked in the house by the opposition since 2002, yet nothing has been done, and we have now descended into absolute chaos, with the government having to introduce this legislation to try to fix up its own mess. I cannot understand how this sort of mess has been allowed to happen; it is just incredible to me.

If we ran our own businesses this way, we would be out of business in about two minutes flat. Instead, we have this arrogant Rann government just totally disregarding everyone, letting this debt blow out, and we have a lack of Westminster tradition and ministerial accountability. They blame everybody else; they do not blame the minister. I am starting to wonder whether the government is indeed full of scoundrels and blackguards, quite frankly; it is a disgrace.

I feel desperately sorry for the workers of this state who will have to endure the pain and suffering that will come out of this. I was flabbergasted yesterday, when the unions held a demonstration at the front of Parliament House, and we had the government in here trying to defend a rather pathetic position. The gallery has been full of union people during the past couple of days. Indeed, we had the Hon. Bob Sneath and the Hon. John Gazzola from another place out there with the unions yesterday. They showed the courage of their convictions; they had a bit of guts and determination, and they stood out there and were counted.

Who knows where we go from here today? I understand that the government has a list of amendments that its caucus has not even seen yet. Well, isn't that going to be a bugger 's muddle next week when they have a Caucus meeting!

Members interjecting:

Mr PENGILLY: All right; I stand corrected. I read in the paper this morning the report about Bob Sneath being out there yesterday. I do not know Bob very well, but he is an honest toiler. Like Bob, I have worked in the shearing sheds for years. I still employ shearers, and I still do a couple of days in the shearing shed whenever I can. I know what it is like to be in the shearing industry, and I know where Bob Sneath is coming from, and there are a few others who have done it as well. I take my hat off to Bob for having the courage of his convictions and getting out there yesterday.

How some of these people who have come up through that hard union background, working in shearing sheds and such industries, can suffer this sort of nonsense, I do not know. It is an embarrassment for them. You only had to look on the other side of the chamber at members ducking for cover to know how they felt; they did not like it. We were picking up the vibes around the house about how Labor Party members felt, and I do not blame them for feeling pretty aggro about it. I think that they have been treated very shoddily. The reality is that the workers of this state are the ones who are being treated very shoddily—disgustingly badly.

Mr O'Brien: He doesn't know what he's talking about; he just wants to have a whinge.

Mr PENGILLY: Well, if the member for Springfield wants to get up and say a few words, go your hardest. I know what it is like. Out of all this mess I do hope that we get some semblance of order and that WorkCover is fixed up. Once again, I think it is an appalling situation when the parliament has to spend hours and hours fixing up a mess created by an incompetent government.

Mr O'Brien: You think your contribution is fixing up such issues; you just want to have a whinge.

Mr PENGILLY: Well, if the honourable member wants to have a go, he can get up here and have a crack at it. I have not heard anything on this bill from the member for Napier. I invite you to get up after me and go for it. Take your full 20 minutes and tell us how your government stuffed it up. Come on! I defy you! You get up after me. I will sit down and let you go in a minute.

I say to the house once again that it is a mess and it has to be fixed. Our lead speaker has covered in dramatic form what has taken place in this chamber over a long time. He has taken a lot of points. One only has to look at the figures with respect to the unfunded liability of $844 million as at 30 June last year, and the loss of $149 million. We are now in the situation where the unfunded liability of the Public Service, I understand, is well over $1 billion. Welcome back to State Bank mark 2! They have messed it up, they have stuffed it up, and they have left it for everyone else to fix it up. I hope that it works for their sake, because the working people of South Australia will not forget this mess, and the unions will not forget. I do not think they have even started on you yet. I hope they stick it right up you.

Debate adjourned on motion of Mrs Geraghty.

At 18:16 the house adjourned until Thursday 3 April 2008 at 10:30.