Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation: Annual Report 2014-15

The Hon. S.W. KEY (Ashford) (11:21): I move:

That the 21^st report of the committee, entitled Annual Report 2014-15, be noted.

I am pleased to present the ninth report of the Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation. This 2014-15 annual report is the 21^st report of the committee and reflects the committee's busiest period since it began in 1996. It also reflects the commitment of the members who have never been remunerated for their contribution, and who have many other—like we all do—commitments and responsibilities.

The committee's primary function is to keep the administration and operation of the legislation affecting occupational health and safety, rehabilitation and compensation under continuous review. It is an important function, and one the committee takes very seriously.

During the 2014-15 reporting period, the committee reviewed the operations and the administration of the Work Health and Safety Act by taking evidence from Mr Stewart-Crompton who had been appointed to undertake a review of the Work Health and Safety Act in accordance with section 277 of that act.

Mr Stewart-Crompton informed the committee that he had consulted widely with industry and employee associations, with Business SA, Self Insurers of South Australia, and SafeWork SA. He acknowledged the achievements of SafeWork SA in reducing serious workplace injuries, but reported that industry bodies and business groups had suggested that SafeWork SA should provide more information, education and support to business groups to assist them to comply with the new legislation. Indeed, witnesses had previously advised the committee in relation to the gap in SafeWork's business model during its inquiry of SafeWork SA responsibilities. It is not surprising that unions expressed an alternative view and advocated for greater enforcement of the Work Health and Safety Act.

The committee received evidence from SafeWork SA, at which time Ms Marie Boland provided information about the reorganisation of the agency to provide greater engagement with industry, business and other stakeholders. The agency's new focus on community engagement, without losing sight of compliance and enforcement functions, demonstrates they have been listening, and it seems that the agency is now delivering a more balanced approach. Time will tell if these changes have the desired result.

We should not forget about the needs of small business in South Australia. There are more than 143,000 registered small businesses in South Australia, the majority of which do not employ staff. A third employ less than 20 workers, while the remainder employ between 20 to 200 workers.

Small business must comply with the Work Health and Safety Act, but their challenges are great. The act regulations and codes of practice amount to over 1,000 pages of compliance documents from which small businesses must pick and choose those areas of legislative framework with which they must comply.

While all small businesses must ensure they have a safe workplace and safe systems of work, not all small businesses are the same, so the risks to workers and their business fortunes differ. The committee heard evidence from the Small Business Commissioner, who said that even though the legislation is a challenge for small business, it is not something to be ignored, because there are now serious consequences for noncompliance. However, comprehending the complexity of the legislation and applying it in real time with limited resources is often beyond the expertise and capability of many small businesses.

The commissioner informed the committee about his role in assisting small businesses to resolve disputes and engage them in addressing legislative challenges. He said that he meets with SafeWork SA to explore ways to engage with small business and provide learning opportunities for them in relation to legislation. The committee looks forward to hearing from the Small Business Commissioner again the future.

The committee kept the administration and operation of the Workers Rehabilitation and Compensation Act under review during the reporting period. The committee's previous inquiry into vocational rehabilitation and return to work identified that the scheme had not been operating effectively. The return-to-work rate was the worst in the nation, and workers compensation claims were costly and protracted. A small number of claims accounted for about 92 per cent of the scheme's costs, resulting in the highest unfunded liability in the nation.

Since the committee's report, the Deputy Premier has announced a review of the scheme and brought about a number of substantial changes. The outcome was, as we all now know, the establishment of ReturnToWorkSA and enactment of the Return to Work Act. Mr McCarthy, who is the CEO of the return-to-work authority, has appeared before the committee on a couple of occasions to explain the changes as they were evolving, and has reported on the scheme's funding ratio, which is now at 100 per cent.

Whilst ReturnToWorkSA has adopted a more proactive approach to claims management, there is still no national definition of 'return to work'. I must say that I find it astounding that, even now, we still do not have a definition for 'return to work'. That means it is not possible to really compare scheme performance on an equal basis across the jurisdictions.

The committee is also concerned about the level of whole-person impairment. In evidence, Mr McCarthy said that there were many people with what was considered to be a 30 per cent whole-person impairment that are able to work and do so, but he has not actually substantiated this claim. We are still waiting to hear about the examples that he mentioned.

Out of 159 active claimants who had an assessment of whole-person impairment at 30 per cent or greater, only seven were working full-time (so, that is 4 per cent) while 38 were being managed by the Serious Injury Unit. He reported that a further 58 claimants with a whole-person impairment assessment of 30 per cent or greater were inactive, and only eight of these had been working full-time when their income maintenance ceased. The whole-person impairment assessment of claimants with a psychiatric disability at 30 per cent is a very high bar indeed, particularly when it must be assessed separately to the physical impairment.

The house referred the Workers Rehabilitation and Compensation (SACFS) Amendment Bill to the committee for a report and recommendations. The committee undertook a comprehensive historical review of the bill and the issues, following which a report was tabled that supported the Deputy Premier's decision to provide presumptive protection for 12 known cancer risks to which the SA CFS volunteer firefighters may be exposed as a consequence of their work. I know a number of members in this house were very pleased to see that change happen. I know that I strongly supported that this matter of equity be addressed.

As well as undertaking the extensive work I have just cited, the committee is also undertaking two inquiries. The first relates to work-related mental health and suicide prevention, while the other relates to South Australia's ageing workforce. In this area I must pay tribute to the Hon. John Dawkins, a member of our committee, who has done some tremendous work, along with other members, to make this area one of prominence where we can try to make some changes.

The committee has received many submissions and heard evidence from a wide range of witnesses in relation to the mental health and suicide inquiry and expects to be able to report on the committee's findings in early 2016. The workforce ageing inquiry is progressing more slowly, probably more slowly than we are ageing, but it is likely to be finalised in 2016. I see this as a major area that we really do need to come to terms with.

Finally, I would like to briefly talk about the committee's inaugural trip to the beautiful Barossa Valley where we were hosted by the member for Schubert and undertook three site visits. It was a privilege to tour Pernod-Ricard Wineries, Vinpac International and Barossa Enterprises which are all outstanding businesses with a focus on the health, safety and wellbeing of their staff.

I would also like to this opportunity to thank all of those who have contributed to the inquiries undertaken by the committee. I thank all those people who took the time and made the effort to prepare submissions for the committee and also speak to the committee. I also thank the businesses in the Barossa who were so welcoming and provided a valuable insight into the work and life in the region. Again, I thank the member for Schubert for his organisation, along with our executive officer.

I extend my sincere thanks to the members of the committee: the member for Schubert, the member for Fisher and, in the other place, the Hon. Gerry Kandelaars, the Hon. John Darley and the Hon. John Dawkins. My thanks go to our excellent committee executive officer Ms Sue Sedivy.

Mr KNOLL (Schubert) (11:32): I rise with gusto to speak to the annual report of the Occupational Safety, Rehabilitation and Compensation Committee. May I say from the outset that this is not necessarily an area from which most people would derive enjoyment and pleasure. It is quite a complex area and a detailed area of legislation and one that deals with some pretty tough circumstances, but I love it; I love the work of the committee. I note that the member for Ashford always puts on the record the fact that our committee is not remunerated and that is how you know that our love and affection for this committee is genuine and heartfelt. Maybe next year others may feel that same love for their committees.

It was really good to hear from a whole range of speakers, as we did over the course of this year, whether it was Mark Carroll from the Police Association, John Chapman the Small Business Commissioner, Martin O'Malley from the Mining and Quarrying Occupational Health and Safety Committee (MAQOHSC), and a really good cross-section of people who gave some pretty heartfelt and in-depth answers. They come from a position of understanding their industry extremely well. It is obviously the committee's work to help politicians become smarter in certain areas and this committee has certainly availed itself of that opportunity. I feel I have a much greater understanding of the issues surrounding the area of occupational health and safety within the business community.

Over the past 12 months we have passed the return-to-work legislation, and that came into force on 1 July this year. It was beautiful to see that for the first time since 2002—because the scheme was heading pretty close towards being fully funded under the previous Liberal government—we are in a situation where the scheme is now back to being fully funded. In fact, it is overfunded and had a one-off surplus of about $300 million.

That is, in large part, due to the changes that were made to the Return to Work Act last year. The evidence we heard from Greg McCarthy, the CEO of ReturnToWork and a man for whom I have a huge amount of respect, is that, contrary to the government's assertions over a long period of time, he was actually able to get the scheme back to being fully funded under the old legislation.

We had a situation where average premium rates were 2.75 per cent but the average cost of the scheme was about 3.34 per cent. He was able to bring 3.34 per cent back to 2.75 per cent in terms of costs, so that the premiums being charged to businesses actually equated with the cost of running the scheme. So even under the old scheme, we would have had a cost-neutral, fully-funded scheme—again, not necessarily what we have been hearing since 2002.

The reason he has been able to do that is that he used and enforced the legislation that was already there but also changed the focus. This is something I have been delving into quite deeply. I have seen it happening in New South Wales, especially with their new finance minister, Don Perrottet, and I see it happening in New Zealand. The focus has been on getting out there and, at the early stages of claims, being aggressive in the way those claims are being managed.

ReturnToWork now has a whole host of mobile case managers—and I will not give a number because I do not have it off the top of my head—who go out and visit workplaces as soon as an injury occurs or very soon after the injury occurs, so that that claim can be actively managed in order to get that person back to work as quickly as possible.

They do that by ensuring that all the appropriate medical care is given and that the claim is not just sitting in a pile of paperwork gathering dust. That early, active, aggressive case management has done wonders in helping people get back to work. It comes from a place of providing better service, and I find that quite exciting. If that is something that can be replicated across a whole host of government service provision areas, therein lies the key to containing budget blowouts and containing the cost of government more generally. That was really quite exciting.

Obviously in the Return to Work Act changes, we have been able to make a step change from a 2.755 per cent average premium rate now down to 1.95 per cent, which is a pretty good step and will save the business community about $200 million. It will also save the government and self-insured people as well. Essentially we still have a scheme at 1.95 per cent that is getting close to average, but is still above average in terms of cost.

From talking to Greg and hearing his evidence, we are certainly on track for the 1.95 per cent but he believes that, as we build some history into the scheme going forward and as the actuaries who calculate the liabilities within the scheme become more comfortable that there is some way to control the costs within the scheme for the first time since the act was introduced in 1986, we should be able to further reduce the average premium rate.

I know that will be great news for business in South Australia and will, hopefully, encourage them to invest and hire more people and create more jobs. Again, if it is done through a system of providing better up-front service, then I think that is an extremely good thing.

We also heard from Marie Boland from SafeWork SA. They are also looking at ways to improve their service provision and I found it quite exciting that they have separated the functions of SafeWork into the different areas of community engagement and enforcement. The reason they do that is that they are trying not to come in waving a big stick around and being punitive. What they want to do is work with businesses to make them safer, and they do that by sending people into work places who come from a completely different mindset.

I know from some businesses I have talked to in my electorate and more broadly that they are quite positive with some of the recent experiences they have had with SafeWork because, instead of just coming through and writing expiation notices or improvement notices, they have come in and said, 'Let's sit down and let's work together. Let's help make your business safer, but let's work together to do it.' They have not necessarily just come in, as I said, waving the stick.

The good thing about that is that, in taking that approach, SafeWork is helping businesses to help themselves. If the outcome of a safer workplace is fewer people getting injured, that is a fantastic outcome from the point of view of people feeling safe and actually being safe when they go to work. It also has the added benefit of making the cost of doing business better and cheaper. Again, that has to be a good thing. Anything that SafeWork SA can do to improve in that area will have flow-on effects for the whole South Australian economy. It is a win-win situation because we get safer workplaces that are ultimately cheaper to run. It is a fantastic outcome if we can continue down that path.

In summing up, I had a ball with this committee and I am certainly very happy to have hosted them in the Barossa. The committee has helped us to unlock a few doors to get in to look at a few businesses that we otherwise would not have got to see and really see what best practice looks like. The commitment that each of the businesses we visited had to safety was remarkable.

We sit in here legislating for minimum requirements, but Pernod Ricard especially, at Rowland Flat, has won awards for their commitment to safety. They really do go above and beyond because they see the benefits for staff morale, for productivity and for wellness within their community with their provision of gym services and the like. That commitment delivers dividends for them and is a win-win situation for everybody. I am very happy to commend this report and I look forward to serving on this committee for many years to come.

The Hon. S.W. KEY (Ashford) (11:42): I am very pleased to ask that this report be noted. Both the member for Schubert and I mentioned the very positive field trip we had to the Barossa. In the next reporting period, we have a couple of visits, and there is one to the Riverland coming up shortly. We are very much trying to make sure that we are actually going out to workplaces and not just receiving information at Parliament House, as useful as the witnesses and the presentations have been. We are trying to change the culture of our particular committee and I think it is working well. I commend the report to the house.

Motion carried.