Return to Work Corporation of South Australia (Crown Claims Management) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 12 April 2017.)

Mr KNOLL (Schubert) (15:54): I am the lead speaker on this bill and, not to keep the Attorney in any sort of suspense, we will be opposing this bill and I will set out a number of reasons why. It is because we actually believe in a functioning budget, as opposed to the nefarious ulterior motives that I think are the real reason why this bill—and it is certainly the consensus among everybody in this industry—is here.

Possibly the greatest achievement of this parliament, and something that is not reported that much because it was done on a bipartisan basis, was that we amended our Return to Work Act scheme in late 2014. It was something I was extremely proud to be part of and I think an example of good government and good parliamentary work and debate, and a good outcome for South Australians, not only workers but also businesses. Whenever people on the street stop me and say, 'All I hear is you blokes whinging all the time', I say, 'Actually, there are a number of things that we have done. It is just because we agree on them that people tend not to report them.'

The greatest achievement of this parliament was actually to take the worst return-to-work scheme in the country and turn it into the second worst return-to-work scheme in the country, which some would say is maybe not the greatest of achievements, but I think is a pretty good start. What we did together is we knocked off a $1 billion unfunded liability. We have dealt with the thousands of people—I think it is somewhere between 2,500 to 3,000 people—who were long-term claimants on the scheme.

What we managed to do was to reduce the average premium rate from 2.75 per cent to now 1.95 per cent. I will give credit to Greg McCarthy and Rob Cordiner and their teams for getting the scheme down from a 3.34 average premium cost of the scheme down to the 2.75 per cent prior to the introduction of the new bill, but we have managed to go one step further. There is an issue, which certainly I was not aware of at the time, where closed claims have actually been reopened and people taking a subsequent whole person impairment assessment have been assessed and given a second lump sum payment where they had otherwise a closed claim and were back at work.

Those claims have now washed through the system and I would like to thank those law firms that helped to achieve those outcomes for their clients. A number of local businesses came to me questioning this, and it was something that was very much to my surprise, but, having said that, it is what the scheme was doing and so be it. There is some suggestion now that, given the efficacy of the scheme and again with these transitional arrangements washing through, we may be able to go even lower, and who knows, Attorney? We may even be able to get to the third worst scheme in the country—one can only hope.

Interestingly, when we were debating the return-to-work changes, what was very apparent throughout the entire process was that we needed to look at the things that made those who were not on the scheme better performing than those who were on the scheme, and by that I am talking about the self-insureds. That is obviously not only larger businesses that have the opportunity to be self-insured, but it is also the LGA and the Crown, who themselves did not even like their own return-to-work scheme so much that they got their departments to, in essence, self-insure.

I was lucky enough in 2015 to go down to ReturnToWork and have a briefing from the guys there about their data analytics capability, but also the way that they have been able to measure the schemes. I have been rushing around for the past two days trying to find the data, but to no avail. What was extremely apparent throughout the entire presentation was the fact that, whether it be the crown or whether it be the self-insureds, they all performed better than the WorkCover scheme and the return-to-work scheme. Certainly, in every conversation I have had since the introduction of the new arrangements, that still continues to be the case.

There has been no suggestion made by the Attorney, none whatsoever, none in the second reading speech and none in commentary anywhere that suggests that the Crown scheme is performing badly—none. In fact, the only commentary I have heard about it is that the Crown's self-insurance scheme is working as it should and appropriately. To come in here and say that we need these changes has not been borne out by any evidence. It has not been borne out by any rhetoric of the government. It is just something they decided to do.

This is not the first time we have had an anti self-insurance thought bubble from the Attorney. Last year, there was some proposal on the table to increase the thresholds by which businesses can become self-insured. What I found most interesting about that was that even though the change to the new act, which covers all people providing workers compensation insurance in South Australia, even though the scheme had managed to wipe off a billion-dollar unfunded liability, what was suggested was that somehow under the new arrangements, even though, again, it got rid of $1 billion worth of unfunded liability for the scheme, it was somehow going to be more onerous for self-insurers.

Again, that case was never made. I think after three or four months of angst it was quietly withdrawn. In that sense, I think common sense has very much prevailed. Very little rationale has been provided for why this is being done. Normally, when bills come before this place we go to the second reading speech and look at what intense wisdom is in the mind of the mover who seeks, through his or her second reading speech, to put down untold wisdom that we are all to lap up and take as gospel. Attorney, you have given many second reading speeches in this place, but unfortunately I think this has to be one of the worst.

Firstly, the main reason that has been given for why we need to change public sector employees, of which there are about 100,000, in the words of the second reading speech, to:

…bring the Public Service in line with the rest of the state with regard to return-to-work outcomes and services…

and to result in greater consistency and transparency, is to bring the Crown's scheme back on to ReturnToWork's scheme.

The issue I have is that that statement could equally apply to self-insured businesses. It suggests to me that if this is something that has been looked at for the Crown's scheme, is it again being looked at for self-insured industries? There is an inherent inconsistency in our system, and that inconsistency manifests itself in everybody who is not on the scheme doing better than those who are, that somehow consistency is a goal we should be priding ourselves on. But at this stage it is only consistency for public sector workers and not consistency for the broader marketplace.

The second reason, and this is the one I find most interesting, given the sojourn I had at ReturnToWork in 2015, that 'ReturnToWorkSA has a sophisticated data analytics capability, which they use as a risk management tool'. It is fantastic, I have seen it, it works and it is brilliant. If I may digress (which, as lead speaker I can), I have seen that data analytics capability firsthand. In an inquiry of the Economic and Finance Committee looking into the labour hire industry, ReturnToWork came in and showed us what they are doing to crack down on unscrupulous labour hire firms. I know that the member for Colton was also quite amazed when he heard about the good work of the Return To Work Corporation and how they are able—

The Hon. P. Caica: I don't think that's quite accurate.

Mr KNOLL: It is extremely accurate.

The Hon. P. Caica: No.

The DEPUTY SPEAKER: Order!

Mr KNOLL: —how the Return To Work Corporation used that data analytics capability to find the labour hire firms that they believed were most likely to be under-reporting their wages and therefore paying less premium to the scheme than they otherwise should be. It was quite a sophisticated tool that took not only into account the information provided by the labour hire employer but cross-referenced it versus industry-standard costings.

If a labour hire firm's gross turnover was much higher than the stated wages should otherwise have been, especially in relation to wages as a percentage of total turnover, then businesses were investigated. We know that about 80 to 85 per cent of the costs of a labour hire firm is in paying wages to the employees it then hires out to host employers. If we had a business that was turning over, say, $10 million but was only showing $5 million worth of wage turnover to the corporation, then that was worthy of investigation.

ReturnToWork was then pretty swift about how they dealt with those employers. For instance, they would forensically audit them and prosecute labour hire companies for failure to report income. For those phoenixing labour hire companies, which we know is one of the largest issues in industry, ReturnToWork was able to require those firms that had consistent directorship or relationships between directors of the new phoenixed company from the previous company to pay up-front premiums to ensure that, essentially, there was a level of security to make sure that return-to-work obligations were met by those labour hire firms.

This strategy was extremely effective. In fact, of all the agencies that we talked to in relation to regulation and enforcement of regulation around labour hire companies—and we talked to the ATO, SafeWork SA and other government departments—ReturnToWork was by far the most effective at controlling them. In my view, they do such a good job that we actually do not need to license labour hire firms in the first place, but that is an argument that has been won and/or lost, depending on what the Attorney chooses to do in the future.

The reason I talk about this is that I would agree that ReturnToWorkSA's sophisticated data analytics capability is there. What I do not understand is why the Crown scheme needs to go back to being part of the corporation scheme in order for that data analytics service to be utilised. In fact, the presentation that I was given had huge levels of detail that self-insureds give to the corporation, such that that data analytics capability can be readily utilised.

If there were some gaps between the information that is provided, the Attorney could bring back a different bill that requires greater information and transparency to go between the corporation and the Crown and other self-insured businesses. However, there is also potentially money to be had with ReturnToWork seeking to charge services to self-insureds and the Crown scheme in order to avail them of that data analytics capability. This could be cost effective if, as is stated in the second reading explanation, it is used to 'help with the risk management of current and future claims'. In fact, I am fairly sure that ReturnToWork is already doing something along those lines in terms of exporting the brilliant data that it has. Again, I do not think this is the real reason we are where we are.

Another point that the government makes is that, in terms of consistency, the Attorney would like to see 'a more consistent and transparent return-to-work system throughout South Australia'. This is the idea that everybody needs to be on the scheme so that we can all have the same process, except that that is not entirely what happens. Over the life of this government, we have gone from having one claims agent to having many claims agents to having two claims agents.

Indeed, there is a different approach taken between EML and Gallagher Bassett. I do not want to make any judgements about who does what but, as somebody who talks regularly to businesses, there is a slight difference in approach. If the government was serious about consistency, then why are they not looking at that part of it because, in all seriousness, bringing the Crown back on to the Return To Work Corporation scheme, there is still going to be a level of inconsistency in the way that claims management happens. Again, I do not think that is the real reason that this bill is being brought to this place. A huge number of questions need to be answered if the government in any way wants the opposition to reconsider its position against this bill. We have had very little understanding about what the budget impact is likely to be if this changes.

The Hon. Robert Lucas in the other place is a forensic oracle of information who uses his Budget and Finance Committee to good effect. When he was interviewing Roch Cheroux, CEO of SA Water, Roch gave evidence that he believed that the switching back to the Return to Work Corporation scheme would cost SA Water somewhere in the order of a million bucks. I understand, through the corridors, that maybe they are being carved out, and the point is: if it is going to cost them a million bucks extra and they get to carve out, what makes SA Water different from everyone else?

I also understand that the Courts Administration Authority was before the Budget and Finance Committee on 18 April, and Julie-Anne Burgess from the Courts Administration Authority said, 'I think there is a general sense that there may be increased costs under the new arrangements.' That was said on 18 April and it stands to reason. In fact, I have sat through a number of budget and finance meetings where they express no understanding of the budgetary impacts of this change, but there is a general sense that they all believe that there is going to be an increase in cost.

Secondly, I ask the Attorney: have rates been set for departments? Is there an understanding of what the average premium rate is likely to be, and how does that compare with the costs? Is it the case that departments are going to have different rates set, or is there going to be some sort of department-wide or government-wide average premium rate, and how does that compare to the current costs? We also want to understand whether or not all departments are being moved over and, as the Attorney said, whether or not there is a carve-out for SA Water.

It also appears that there are carve-outs for Minda, the Royal District Nursing Society and the Royal Society for the Blind, and they are likely to have need of a later date of transfer in order to ease their transition. Here we sit, and it is 11 May. Departments are telling us, as recently as a few weeks ago, that they do not understand what the budgetary implications are. As late as a few weeks ago, departments are telling us that they have not had any concrete understanding of what the actual arrangements are likely to be. Is the government even ready to make this move on 1 July 2017 as it would like to?

There are more questions, but we can get to them through the committee process. In the end, I would like to say that every commentator I have talked to in this industry from unions—and, by the way, the PSA has now come out on the record as being against this proposal—says that this has nothing to do with better return-to-work outcomes, which we know are better put where they are. It is not about consistency, it is not about transparency and it is not about reducing cost.

The Hon. J.R. Rau: What is it about?

Mr KNOLL: It is about making the return-to-work scheme look as profitable as it can so that it can be flogged off at a future date. Indeed, in estimates questioning last year, when asked very specifically this question around moves to privatise the return-to-work scheme, the Attorney at best can be described as having been coy, maybe even a little obfuscatory. He has perhaps conducted himself in such a way as to have a high degree of plausible deniability when it comes to this matter, and I think it is only right and proper that, if government is looking to privatise ReturnToWork, it should come clean and at least be honest about what it is seeking to do and about the fact that this move will move us very much in that direction.

The Motor Accident Commission had plenty of headroom when it was sold off, which is why the government is able to yield somewhere over $3 billion for the sale of that asset. Similarly, bringing back into the scheme larger employers—which often have lower average premium rates by virtue of having economies of scale and which are much more likely, especially those that are self-insured, to have specialist in-house return-to-work coordination—will help make the scheme more profitable.

In relation to that, during all the times that ReturnToWork has appeared before various committees, such as estimates, occ health and safety or budget and finance, they seem eager (and, in fact, the Attorney seems eager) that any reduction in the average cost of the scheme be ploughed back in to reduce average premium rates for employers across South Australia. As I said, we have gone from the worst to the second worst and, hopefully, we can get down to, say, 1.7 or 1.75 and have an average scheme.

Under a privatised model, what would happen instead is that that headroom would be turned into profit for the person who buys the book, and I do not think that that is productive for South Australia. If that is the government's intention, they need to come clean about that. Another piece of evidence we obtained through the Bentley-Latham report states:

However, the point remains that there is no evidence in the comparisons that suggest the SA Crown Workers Compensation, taken in its entirety, has been poorly managed in a financial sense. Our general conclusion is that the Crown as a whole has performed well in terms of maintaining control of claim costs. There are no obvious signs of major mismanagement.

It is another piece of evidence to suggest that what is happening here is not being done because we want to improve return-to-work rates or reduce costs. There seems to be another motive. That is where the industry has arrived now. I have also had discussions recently with self-insured employers to understand that, even under the new scheme, which is comparatively more efficient than the older scheme, the self-insured are still able to make savings versus what they would if they went back onto the ReturnToWorkSA scheme.

I know that for the Local Government Association the saving is in the order of $10 million to $14 million a year. In fact, over the journey of their having had their own workers compensation scheme, they have saved somewhere in the order of $250 million to $260 million. That is a huge sum of money. If it works for the LGA, it certainly works for the Crown scheme, that any retrograde step to bring them back under the Return To Work Corporation's banner would result in higher costs.

As an opposition that seeks to become the government in March 2018, we want the books to look as good as they can and we want government departments to be running as efficiently as they can. In that light, it is quite self-evident that the Crown scheme needs to stay in place because, as has happened when it comes to many other government reform measures, without listing off more than Transforming Health, there have been issues. I can see what will happen: 1 July will come and go and the transition will get quite messy, as government departments are not ready and some try to push back and seek deferrals and later dates for transition.

As we can already see, for a number of the groups that I have already identified, it will be a mess that is delayed into the caretaker period post next year's election, and it is a mess that we on this side of the house, sitting on the other side of the house, will have to clean up. Instead of having to clean up that future mess, it is much more prudent for us to stop the mess being created in the first place. We would much prefer to be the fence at the top of the cliff rather than the ambulance at the bottom. We will be opposing this bill. We may seek further illumination on a number of questions during the next process. With those remarks, I will conclude my speech.

The Hon. P. CAICA (Colton) (16:19): It is clear that, with this bill, the Crown will become ReturnToWork's biggest customer, and the government has, I understand, emphasised that we expect exceptional service and dedicated resources from ReturnToWork to ensure the transition is seamless. I would say this, Deputy Speaker: you would be aware that I have had a bit of involvement with WorkCover over the years, as a trade union official, once as an injured worker for a short period of time, and also as a minister for industrial relations for 18 or 20 months, or however long it was. In fact, you might have been at that convention when I talked about some reforms we wanted to bring in to WorkCover, and it was a crowning moment for me. I think I lost that debate 267 to one.

A lot of the changes being proposed were essentially about improving a system to ensure that its focus is on return to work for injured workers because what we did see, over an extended period of time, was what by default became a pension scheme. There was no emphasis on getting people back to work and, through no fault of their own, injured workers were left to their own devices over an extended period of time to the extent that, after 10 years or 12 years or 15 years or whatever it might have been, they were almost incapable of coming back to work.

As much as the original proposal to change WorkCover as we did back in 2015 came, from my perspective, with some angst—and I still have some misgivings, and I tell them to the Deputy Premier quite often—I also know that when legislation is introduced, if things have not worked exactly how we want them to, those things are called amending legislation. That was one for the future. For the time being, what I say is let us proceed with the proposals for reform that are being put in place that have got off to a pretty good start. There is more work to be done. This is one important component of that ongoing work.

I was interested in the member for Schubert's contribution. He spoke a lot about wanting to get to at least the average, and it seemed to me to be an aim for mediocrity: 'Let's focus on that. That's our objective. At the very least, let's reach a level of mediocrity.' Well, he talked about sitting on this side of the house after the 2018 election, and I can tell you that the people of South Australia will get exactly that if they are on this side of the house—mediocrity. That is all that you will be able to deliver.

I worked with the fire service. They were an exempt employer and operated their own system. I have always thought that all aspects of the Crown's operations ought to be under a single operating organisation, and that is what this is going to do: bring them back or put them under ReturnToWork. I also tried to have a little bit of history, and I know there are people in the chamber who would know a lot more than me about the history of it, but I think it might have been 1985 or 1986 and Frank might have been the relevant minister at the time, when the idea of exempt employers was brought in from the Crown's perspective.

I saw, even during my short time as the minister, an outflow of organisations leaving the WorkCover scheme to become self-insurers or to become Crown-exempt employers. I think that had an adverse impact on the operations of WorkCover and, indeed, on the consistency and the critical mass that are required to have a properly operating scheme in South Australia. I agree with the member for Schubert. I do not often agree with a lot of what he says, but I and the government also understand that there may be some hesitation from both our Crown employees and our agencies in commencing a new way of doing things.

But the government has confidence that, since the decision was made to transfer Crown claims to ReturnToWorkSA, the planning has been comprehensive and inclusive of workers who may be affected. I am certainly heartened by that. Of course, change is always hard and difficult for a lot of people and organisations but, as I said, and I will go back to it again, I believe this is the right and proper thing to do. It is true that the commencement of the Return to Work Act in 2015 marked a new era for work injury insurance in South Australia with the foundation of a new return-to-work scheme.

With it came great challenges as well as tremendous change and, I believe, some significant achievement since that time. I also say that, from my perspective, it is the monitoring of those successes along the way that makes sure we continue to have them, and it is incumbent upon this parliament and all members to make sure that we individually and collectively do that. It is not just a new act, but also a new emphasis on the administration of the scheme, particularly—and this is critically important—a new focus on return-to-work services.

I think the member for Schubert also talked about claims management and some inconsistencies he believed existed with what we are trying to achieve here and the way claims management was being entangled. Well, claims management is claims management, and that needs to be the focus. Return to work is inextricably linked to claims management, but the core responsibility of ReturnToWork has to be the processes by which we manage the injured workers in such a way that the primary focus, not only of ReturnToWork and the organisation from which they come but also the organisation charged with the responsibility for that, is returning those people back to work as soon as possible, and in such a way that they are capable of carrying out the responsibilities they did prior to being injured.

The new scheme has been a great success with improved return-to-work rates, and again that is pleasing. With this bill, we will confer the benefits of this new focus on Crown employees as well. I am not going to bang on about how I think this is the appropriate thing to do because I have said it often enough. A key challenge has been to smoothly implement the new scheme for new claimants whilst also managing the transition of the much larger group of claimants from the old scheme.

For ReturnToWorkSA the activity has been intense, with new laws to learn and the introduction of a comprehensive new service model focused on face-to-face support for employees and workers. In some areas that is quite novel because the injured workers may not have seen anyone for a period of time, and now, one of the first people they will meet will be people who are there to support them, with additional face-to-face support not only for them but also for employers and workers. There is also the implementation of new software and computer systems to support the new scheme, which can always be challenging, and, very importantly, there is assisting claimants from the old scheme adjust to the changed benefits of the new scheme.

I think the government should be rightly proud of ReturnToWorkSA's achievements in moving from administering what I said earlier was a medico-legal scheme, which had really become a default pension scheme, to delivering a new scheme that embraces the health benefits of work, with a strong service ethic. That is what it is all about. The member for Schubert talked about the second reading speech, but I found the Deputy Premier's second reading speech to be succinct and to the point about what the objectives of this change were, and I am sorry that the member for Schubert does not get it.

I am told there was a survey of new claimants and employees, and in that survey the vast majority of respondents rated the service as 'good or higher', far from the 'mediocrity', I think, that the member for Schubert was focusing on. They rated the service as good or higher, and these survey results are reinforced by significant reductions in complaints and disputes lodged by new claimants. That was something symptomatic of the old system, the amount of disputes that were lodged by new claimants, but also the number of disputes that were consistently being lodged by people who were already in the system for an extended period of time.

ReturnToWorkSA has introduced a new, simpler premium scheme for employers that rewards companies with no employees off work with injury or where swift return-to-work opportunities are provided to injured employees. I think that is a great thing. There should be carrots in there that drive performance and reward good performance. That is a good thing; there needs to be that type of incentive. The scheme's reduced average premium rate has saved businesses $180 million per year to spend and invest in South Australia, and if we continue with that form of incentive, one that rewards outstanding achievement, that will further drive up the savings and drive down the costs of the scheme.

The last two years have marked the exciting beginning of a new era for work injury insurance in South Australia. I do not want to overstate it—as I said earlier I still have a few concerns, and I will continue to raise those—but at the moment I have nothing to raise of concern and nothing has been raised with me by my constituents at this point. In fact, the few who have raised issues have been adequately and properly addressed through the processes that have been put in place.

I also highlight that the work has just begun, and to me it is abhorrent that on one hand the member for Schubert congratulates the legislation that was passed as being perhaps his greatest moment in parliament since he has been here—he and his side, through bipartisan support of that legislation, the crowning moment of his career to date—yet he is not going to allow, in a bipartisan way, the government to continue the work that we collectively agreed was the right thing to do. I think that is awfully short-sighted, and I do not know for the life of me why you are doing it. You did not convince me in the contribution that you made that there is any fine or sound reason as to why you should be doing it. As I said, the work has just begun.

A durable injury insurance scheme has to be both desirable for workers and affordable for South Australian employees. For the next three years, those key initiatives that need to be put in place will continue to be introduced that will focus on realising the health benefits of work, as well as ensuring the effective and economic operation of the entire scheme. This can best be done by ensuring that Crown employees transfer through, as well, to ReturnToWorkSA.

By accessing ReturnToWorkSA's data analytics capabilities, data on Crown claims will also be able to be captured quickly, accurately and more consistently to allow the government to identify trending areas of claims and, in turn, focus education prevention programs directly in these areas. Some of you might say, 'Well, isn't that novel?' The reality is it is just the proper and appropriate thing to do. Measure your performance; where your performance is down, make those changes that can be made and ensure that you address emerging trends or areas where there has been less than a satisfactory performance. We can do that best by having those Crown employees transferred back to ReturnToWorkSA—not novel, necessarily, just the right thing to do.

The expected outcome of the transfer of Crown claims management to ReturnToWorkSA, as in the words of the Treasurer in his second reading speech, is greater consistency in service and outcomes for all South Australians and additional levers for the Crown to drive improved performance in relation to work injury claims. I commend the bill to the house.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (16:31): I rise to speak on the Return to Work Corporation of South Australia (Crown Claims Management) Amendment Bill 2017. I am sure the Attorney will be pleased to know that I wish to make a contribution on this matter.

In the time that we have both been in the parliament, there has been major reform in respect of what we knew as the WorkCover Corporation because of its dire circumstances under the mismanagement of the government. The reforms that were undertaken in 2013, which were ultimately supported by the opposition, have enabled the government (I think under the good stewardship of Mr McCarthy) to bring the organisation into some form of management, which has seen a significant reduction in the unfunded liability.

I think there has been a general acceptance in the business community that it is an organisation now free of seriously injured personnel and that is now functioning quite well. During estimates last year, we raised some questions about the future of the Return To Work Corporation and how it might now operate, including whether it was going to assume responsibility for any government work.

There are two deficiencies, in my view, in respect of this bill that need to be identified; one is that the government is progressing this bill without release of the Bentley-Latham report (as if I could forget Latham; that is a good Labor name) that had been commissioned. It is a report which has cost us, as taxpayers, over $100,000 and which the Attorney-General's office commissioned at the request of the Attorney, being a review of the management of work injuries within the South Australian government.

I find it astonishing that the government would commission this report, make us pay for it, then not tell us what is in it, and then suggest to us that we are not allowed look at it, as some kind of basis upon which we would support such an initiative as is in this bill. I find it astounding. Nevertheless, the government has the opportunity to show us this report, not keep it secret, and presumably present us a case by which it justifies this move.

As has been clearly outlined by our principal speaker on this bill, on all accounts the operation of the departments in managing their workers compensation claims has been very competitive and effective. A few years ago when there was a proposal to perhaps make it more difficult for people to stay out of the scheme (it was seen by some as an attempt to bring them in to prop up the scheme), the self-insured industry made it very clear that they did not want to come into the scheme, that they were very happy to remain self-insured and that there were significant benefits in their being able to operate their workers compensation.

One of the most significant benefits that has been seen and demonstrated repeatedly is that, because these organisations that are self-insured, like our government departments, have a large workforce and a number of personnel who are specifically given the responsibility to deal with workers compensation, they are able to accommodate the early return—especially the prompt attention to treatment and obviously assessment—and then the quick turnaround of their claims and the return to work in a workforce of which they are commensurate and familiar so that they can bring these people back in. They understand the value of work, they understand the value of prompt return to the workforce and they are able to action it.

Unsurprisingly, the self-insured said, 'Don't put us back into that system in the WorkCover Corporation. We want to stay independent of them and we want to be able to continue operating as we are.' It seems on the face of it that the government departments the government now wants to move into the Return to Work Corporation are also exactly in that position. They have operated quite efficiently and, from the material leaked from this report done by the government, they too have given some credit to their operations.

The second reason, and this is very important, is that it is quite clear on the briefings we have had to date, including from the CEO of WorkCover, that they are only being asked to undertake the workers compensation aspects of the public servants. So, of the 105,000 public servants who are proposed to be transferred, they will only be dealing with the workers compensation claims. Herein lies the difficulty. If a police officer is injured in the course of their duties—say trying to apprehend a criminal—unable to return to work and there is a workers compensation process they need to go through, under the new scheme it appears that that aspect of workers compensation would be under the charge of ReturnToWorkSA and that they would make the appointments for rehabilitation treatment, that they would do the assessments and get the medical reports, etc. They would do all that.

Back in the department, back in SAPOL (or in the Treasury office or somewhere separate to ReturnToWorkSA) they would still need to have a contingent of people to deal with the other benefits and entitlements a police officer is entitled to receive in the event that they are injured. Those benefits and entitlements are under enterprise bargaining agreements and regulations. I am not quite sure what they are in at the moment but they are in other entitlements. For example, you might recall that when SAPOL was striking, holding public rallies outside Parliament House saying, 'Look, unlike most work, we are actually at risk of being shot, injured or severely injured,' a number of those brave police officers came along to those rallies to say, 'It is not fair that we should be restricted to the same rules and restrictions and cut-off times as apply to the average employee. We are like people who are in the Army or the Air Force: we have to go out there and put our lives on the line and we need to have some extra protection.'

The government eventually did make provision for this and, when there were changes to the act, they insisted that they be fixed—and they were. However, that area of provision of compensation, over and above their workers compensation entitlement in the transfer of this new model, would have to still be dealt with back in government. Here is the police officer who has been shot in the neck. He has to go off to ReturnToWorkSA to get treatment in respect of that, with the assessments and the like.

They also have to go off and have meetings with the person back in SAPOL who is going to attend to the entitlements they might have in respect of the regulations. What a mess. How unacceptable is that? So for these reasons—no just cause shown, an opportunity to give us the evidence to support it refused and the splitting of the attention to the injured employee—there are fundamental flaws in us progressing this bill and supporting the government at this time.

Finally, in respect of the reasons not to do this in a hurry, on the information we have been given, the ReturnToWorkSA CEO says, 'If the government say 1 July we have to start then that is what we will have to do, but we have not yet sorted out a premium for what the department is going to do.' Apparently, by the end of this month, in May, they will be able to do that and then there will be some negotiation presumably. Come 1 July, when there is a transfer of management, all will be happy and sweet in paradise and all the public servants who are going to be dealt with will be transferred over and everything is going to be fine.

I have never seen a government department act in such haste ever and I would be surprised if that could be achieved. They are asking us to blindly accept the transfer of this responsibility without just cause when they have not even sorted out the premiums that are going to be paid. There has been no provision, other than an assurance apparently that this is going to be cheaper or better than the current cost to the departments.

The departments that I look after for and on behalf of the opposition include the Attorney-General's Department and the Courts Administration Authority. We are already being told that the Chief Justice, who is the head of the Courts Administration Authority, is not too keen to transfer his employees over to this scheme and they may be granted an exemption. SA Water, which is a statutory corporation of the government that is responsible to the parliament, is also showing some resistance of transfer and the government may well grant them an exemption. If the Crown instrumentalities that are not keen to join up are as big as the Courts Administration Authority and SA Water, and they are already bucking the proposal, then we need to have some clear advice from the others as to whether there is going to be any other benefit.

I will highlight one other feature. I am told there will still be power for the Attorney to grant exemptions. At present, the claims management services for agencies already under the government's watch include the Legal Services Commission, the Lotteries Commission, ReturnToWorkSA itself, the Royal Zoological Society and a few others. I do not need to go through all of them, but I make the point that there are a number of government agencies that are already paying a premium from their annual budgets to ReturnToWorkSA for ReturnToWorkSA to do the service.

One of the things I think that it is important for us to look at is to see how effective that job is being done for those agencies. I think it is fair to say that most of them are relatively small agencies, relative to the big government departments and statutory corporations. I will tell you what really concerns me, and it relates to what is going to happen with the premium that is to be paid, which will ultimately be settled upon in this negotiated arrangement between Treasury and WorkCover.

At present, the remuneration paid by the Legal Services Commission to its staff in the 2015-16 year was $16,419,261. The premium that they pay to ReturnToWorkSA is $135,030.65 and their agent is EML. There is no reason to suggest that they are not provided with quite a good service. As you can imagine, most of the people employed by the Legal Services Commission are there to provide services of a legal nature in advice or court representation in areas under federal and state jurisdictions. They get funding from the federal and state governments.

I think it is fair to say that, perhaps apart from being assaulted by an unhappy client down at the Adelaide Gaol, theirs is mostly not a dangerous occupation. They might break a fingernail, they might slip up when walking to their office or taking an interview, but they are largely employed in circumstances where they are not exposed to the risk of machinery and so on.

If I look at ReturnToWorkSA as an agency, they have a remuneration package of $30,525,166 for the 2015-16 year, and their premium for the same year was $114,390.90. It is the same agent, too, EML. I do not understand why, in a remuneration package which is nearly double that of the Legal Services Commission, the Legal Services Commission is paying an annual premium of $20,000 a year more. I do not understand that. It does not make sense to me. It would make sense if the Legal Service Commission employees were doing some dangerous activity and they needed to have extra cover because of the nature of their employment, such as if they were driving tractors, working machinery or operating fishing boats—anything that is a more dangerous activity than doing a desk job.

There are a lot of questions that we on this side of the house would have just looking at the disparate premium arrangements of those government agencies that are already under the scheme. Of course, using those two as an example, it could be that ReturnToWorkSA wants to keep its premium low, so it has negotiated a good deal for itself, but every other poor bunny that is in the system has to carry the excess. I do not know the answer to that, but I certainly want some answers before we consider this bill being approved by the parliament.

I suggest that the worst interpretation of what the government is doing with this proposal is that it is fattening the pig for market day, and I am not the first to make this observation. The government has consistently said to us in the last 15 years, 'No, we are not going to do this,' then we find a couple of budgets down the track that they run out of money and they do exactly that.

With the Motor Accident Commission, the government said, 'We need to strip down the entitlements of people who have injuries arising out of motor vehicle accidents.' Why? Mr Snelling, the then minister of the day, said, 'Because we want to reduce your premiums.' We received a reduction of premiums for one year and then, of course, they went skyrocketing the following year. What did they do in the meantime? They packaged up the Motor Accident Commission for sale. They stripped it of a number of its assets and then they flogged it off.

We are alert to the government's promises, which evaporate when it wants to change its mind. It would be logical, if the government did want to sell the WorkCover Corporation, that it would do just that: transfer as much as they could to make it a more attractive package for anyone who wanted to acquire it. Again, we have assurances from the government that that is simply not the case and that they have no intention of doing that. We have heard all of that before, so we are not satisfied that there is any justification for doing this, other than if the government wanted to say to a prospective purchaser, 'Here are 105,000 extra customers with potential claimants who would be securely under your control,' which would make this a more healthy asset to purchase.

With that, I look forward to listening to the intensive questioning that will be done by our lead speaker and getting some very clear answers. Frankly, I would also like to see the disclosure of the reports that the government has relied on before it asks us to proceed with this proposal, to its folly.

Sitting extended beyond 17:00 on motion of Hon. J.R. Rau.

Mr WILLIAMS (MacKillop) (16:50): I hesitate to say that I will not hold the house for long, but I have got myself into trouble on numerous occasions for making that comment previously. In my experience in this place, there has been no greater sin perpetrated on the people of South Australia than has been the case under this government's management of workers compensation, up until very recent times.

The Hon. J.R. Rau interjecting:

Mr WILLIAMS: Yes, I am going to give you some kudos, minister, because I lived through times when this government remained in denial year after year and brought forward major amendments to our WorkCover legislation, as it was then called, only to see failure upon failure and cost upon cost burden to South Australian businesses. With the advent of the return-to-work legislation, the government claimed that it was going to save South Australian businesses $180 million a year. I am not too sure what the figure has been.

The Hon. J.R. Rau: It has.

Mr WILLIAMS: The minister is suggesting that that has been realised.

The Hon. J.R. Rau: Exceeded.

Mr WILLIAMS: 'Exceeded,' he says, and I am delighted if that is the case. Despite the opposition's protests about various measures that happened over many years, my concern is that the government sat on its hands for in excess of 10 years. What has happened more recently is that the government has fully acknowledged that it was costing South Australian businesses in excess of $180 million a year. That was a travesty. When we look at the situation of the economy of this state at the moment, one of the key factors, in my opinion, was the mismanagement of workers compensation for many years by this government.

I want to point out to the house that this government has a very poor record over a very long period when it comes to workers compensation and the management of workers compensation in this state, apart from the most recent period under the current minister. I recall when I was the shadow minister that the current minister and I spoke to a group of labour lawyers down at the Town Hall. I talked to somebody only this afternoon about that time when the minister and I could have made each other's speeches. I think we both agreed on the major principles of what had to be done to bring the WorkCover system under control and to lift the incredible burden off South Australian businesses. That has been done to a large extent, which I am delighted about.

Notwithstanding the minister indicating that the $180 million target has been exceeded, I believe that South Australian businesses are still suffering a greater cost impost for workers compensation measures than their interstate counterparts, so I believe there is still work to be done. I am delighted that the minister is nodding in agreement. We have come a long way, though, and I acknowledge that. I congratulate the minister, as I think I have previously, on the work he has done in this area.

My concern with this piece of legislation is that the opposition really has not been given any reason for going down this path. I have just reread the minister's second reading explanation when he introduced the bill and I have not seen any analysis. The minister said that there are 12 separate administrative units performing this function within the public sector, but he has not given any information to the house that there are various levels of efficiency or indeed that none of those units is providing a level of efficiency anywhere near that provided by ReturnToWorkSA.

I would have thought that, in bringing this matter to the house, that would be the first job—to present to the house how we are going to provide a better service to the people employed in the public sector in South Australia and how that is going to benefit not only those workers, that workforce, but the taxpayer of South Australia in general. We have not been given that. In fact, what we have been given is this, and I will read from the minister's second reading explanation:

The arrangement provided for in this Bill will lead to improvements over time, given workplace injury insurance is ReturnToWorkSA's core business.

The rationale is that, because this is ReturnToWorkSA's core business, they are going to do it better than anybody else. That is why I gave a little bit of background earlier in my contribution. WorkCover's core business was to provide these sorts of services to injured workers and to industry in South Australia, but we saw for years and years and years that, notwithstanding that that was their core business, the outcomes and the results they achieved were abysmal, particularly when you compared them with the results of the self-insured sector, which was acting under the same legislation and the same regulations but were achieving a much better outcome.

I find it rather amusing that the minister would come to the house and say, 'Please accept this because this must be better because this is ReturnToWorkSA's core business,' with no data, no analysis and no figures to show that, on average, the return-to-work outcomes are superior and/or the cost is more efficient. I have serious concerns. When one finds a lack of suitable motivation for this, one's mind wanders and tries to come up with what rationale is driving the government. Something else this government has shown us very clearly over a long period is that, because it is totally inept at managing the state's finances, it has adopted a policy of continuing to sell everything it can to raise cash.

The forests in the South-East were flogged off, not to pay down debt but to build the new Adelaide Oval. I can assure the house that the people in the South-East do not think it was a good deal. Indeed, if we look at the activity in those forests and the return that has been gained by the new owners, it was a dog of a deal for the taxpayers of South Australia. There was the Lotteries Commission and the Motor Accident Commission. Now we see the government about to sell off the records used in the Lands Titles Office and the functionality there—everything it can possibly use to raise a few extra dollars.

As I pointed out to the house last night, the budget handed down by the federal government the evening before will see the state government receive another $700 million from the federal government in the next financial year, yet the government will continue to sell everything it possibly can. I do not think there is any sensible rationale for selling WorkCover, or ReturnToWorkSA, other than to try to paper over an inept government, to paper over the fact that this government has failed and continues to fail to manage the state's finances. I can see no worthwhile reason for selling off the functionality and the records held by the Lands Titles Office, just as I cannot see any sense in selling off the state's forests. I have grave concerns.

I wonder what will happen to the return-to-work services provided by the other self insurers and what the government is going to do there, because a significant number of South Australian employers' workforces are protected under a self-insured scheme, not the least being the Local Government Association and the local councils throughout the state. If the government is arguing that its public sector should be brought within ReturnToWork's management, how can it not make the same case that the local government sector should be brought within the same realm, and how can it not argue that other businesses should not be?

There are many more unanswered questions than answered questions on this. As the previous speaker said, they look forward to maybe getting some answers at least when we get to the committee stage of this bill. However, I have serious concerns mainly based on the fact that very little real information and rationale have been given to the parliament and the fact that this government's record of managing workers' rights has been abysmal, and its record of flogging off the state's assets is there for everybody to see.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide) (17:01): Can I thank the contributors, two of whom were unexpected. One of the unexpected ones was most welcome. Thank you very much, I say to the last speaker, because he was kind enough to acknowledge the work that my staff in particular have been doing to try to get this scheme back in shape, and that was very significant, I think.

On the subject of ReturnToWorkSA, although this may have a tinge of immodesty about it, I think I come into this chamber with some credibility on this topic. I have stuck my neck out on this topic. I stuck it out before a state election. I persuaded my colleagues to take into a tightly contested state election a policy to reform ReturnToWork. We set a fairly aggressive set of targets for ourselves. We set a target of between 1.5 per cent and 2 per cent premium. I can tell you that that was a reasonably difficult process.

Nonetheless, we did take that to the election, and immediately following the election we spent a lot of time drafting legislation. I pay due credit to the opposition. The current Leader of the Opposition said to me that he wished to work in a constructive way about these things and, by and large, the opposition did. Let's take all the rubbish out of this and just report the facts as they are. Those are the facts.

Yes, we had the good fortune to have an excellent team in there—Greg McCarthy and his mob—and they did an extraordinary job of changing the culture inside the old organisation. We now have a new culture in the organisation and we have a new legislative framework, and the proof of that is in the pudding. We have seen $1.3 billion or $1.4 billion unfunded liability completely wiped out. The legislation passed at the end of 2014, if I remember correctly, and it came into operation on 1 July 2015. In that time, the average premium has gone from 3.34 per cent, or whatever it was at the time—although we were only charging 2.75 per cent—to a point where it is now below 2 per cent.

Yes, the $180 million minimum return per annum to South Australian small and medium-size businesses has been delivered. I have some information about this topic that I can share with the parliament. This is something I have spent a lot of time working on and I can say to the parliament that I would not be trying to sully my reputation as a person who genuinely has a commitment to reform in this area by doing something stupid or doing something dodgy. I can assure members that this is neither of those things: it is not stupid and it is not dodgy.

I have a few more home truths because the member for MacKillop addressed a number of home truths in his remarks. I differentiate his from other contributions, but let us focus on his because I am a 'glass half full' sort of chap. The contribution from the member for MacKillop talked about the old scheme. The fact is that the old scheme—and I made no secret about this either—was buggered. It was not functional. There was a whole bunch of reasons for that: it was cultural, it was systemic, it was architectural, it was personnel, it was everything. There was a whole bunch of reasons.

I can assure the member for MacKillop that, if we still had that scheme in operation, I would not be bringing this to the parliament because I would not have confidence that the management of ReturnToWorkSA—WorkCover as they then were—would have delivered a superior outcome, or even an equal outcome, to the outcome that is being delivered by these agencies paddling their own canoes. But times have changed, and we do not have the old rickety show running there anymore. We have a far more sophisticated and a far more highly tuned management.

The proof of the pudding is in the eating. If you look at what has been going on in terms of the small to medium-size businesses that are actually paying premiums to this new outfit, they are getting better results, and they are getting lower premiums, and they are getting really great return-to-work services delivered to their places of work, and they are getting highly skilled risk management services delivered to them as well. They are getting good results.

There are a few things I need to make clear because a few conspiracy theories were floated. I know the member for Schubert likes a bit of a flourish. I was wondering when he was going to get to the moon landing being filmed at Universal Studios, and Roswell and Area 51, and the weapons of mass destruction that Saddam Hussein had. He was in all that space. I was waiting for the bit about Elvis actually still being alive and living in Hawaii, but we never got to that. What we got to was: 'The government has got a secret plan.'

The Hon. S.W. Key: He's too young.

The Hon. J.R. RAU: He's too young to remember Elvis. That's probably true.

Mr Knoll: What?

The Hon. J.R. RAU: You're too young to remember Elvis. Perhaps if we go more contemporary, George Michael is still alive and is living in Hawaii. He is probably not a good example; let's stick with Elvis. I would rather stick with Elvis, because I recall—

The DEPUTY SPEAKER: Because you like sequins.

The Hon. J.R. RAU: I like sequins. I also liked his return concert in 1969 when he had the leather on as well. That was pretty good, but I only heard about that from my grandparents, of course.

Mr Knoll: And you're whingeing about our guys speaking.

The Hon. J.R. RAU: Okay, sorry. The point I was going to make is that this bogus stuff you run up the flagpole about privatising ReturnToWorkSA—answer: no, not even contemplated. The other bogus one that was floated was: are we going to tell all the self-insureds out there, the Woolworths and Coles of this world, that they should be jumping in? No. They are perfectly happy doing what they are doing. We are perfectly happy having them doing what they are doing. The third point on that that is probably worth mentioning is this notion of fattening the pig for market. I have already said that there is no market and there is no pig.

I make this point: the way this is contemplated to be done, in accounting terms, is that the mixing of the moneys that would come from the public sector, as opposed to the small and medium-size enterprises that are presently paying premiums in the scheme, would be kept separate. There would not be cross-subsidisation of one for the other. The other fantasy point—and this is the one that sits out there with Elvis—is that we would be dropping the cost. Using this whole big cohort of 100,000 really low-risk workers, we would be dropping the average cost to the scheme, to make it a big, fat pig to sell. Well, wrong on every count. It is not contemplated in this model that there will be cross-subsidisation across the two cohorts of premium payers.

As to the question about how much it is going to cost people, the contemplated position is this: for the next couple of years each agency will be paying what they are paying now. They are not going to be facing a big increase in fees or anything of that nature. What is contemplated is that for the next couple of years they will be paying what they are paying now, and during that time we will get to the point where we can build up a claims history in respect of that agency. We—and when I say 'we' I am talking about ReturnToWorkSA—would have a period of claims management for a couple of years, which they would then be able to use as a claims management basis for assessing whether the transitional premium is higher than it should be or lower than it should be.

In effect, we are going to have a completely smooth transition in terms of cost for the agency but, as time goes by, the agency's performance will continue to be monitored. If the performance of the agency over due course demonstrates that the agency is performing very well, that premium will go down. If the performance of the agency is not so good, that premium will go up. That is entirely within the control of the agency to manage.

The other important thing is that we would have the risk management skills of ReturnToWorkSA being employed and deployed in that agency. We would have the return-to-work mobile case management model being deployed in that agency to get people back to work as soon as possible and we would actually be saying, 'We are trying to offer the best service the public sector has available to it on a universal offer-type proposition to all public sector employees.'

That is it. There is no point in lifting up the carpet and peering in the letterbox and doing these other things looking for the secret bit. There is no secret bit. That is it. It is a simple as that. We want to be in a position where we can actually say, 'Why is it that there is a particular business unit of government where we have administrative or clerical workers who should have a risk profile of X demonstrating an injury record of 2X? Why is that happening?'

At the moment, we have each individual business unit doing their own thing. Even if they are doing their own thing very well, they do not have a horizontal line of sight across government. They might have a vertical line of sight within their agency, but they are not looking across government and comparing their performance with other people who are doing similar activity.

Mr Williams: Have you looked at them like that?

The Hon. J.R. RAU: A good question. We did, as many people have mentioned, ask people to take a bit of a look at what is going on around government, and it is the case—and I will not take it any farther than this—that different bits do different things differently, let us put it that way. I think it would be terrific if we had a clear line of sight across the whole of government where you can actually compare apples with apples everywhere.

The other point that nobody has mentioned so far, and it only occurred to me in the course of this debate, is that under the new scheme (as opposed to the old one) we have a cohort of people—fortunately not a great number—who are the seriously injured people. These are the people who wind up with a whole person impairment in excess of 30 per cent. Under the new scheme, they basically have lifetime care offered by the scheme.

As things presently stand, if we do nothing it will mean that the Department of Health, business unit X, has one or two lifetime care customers; the education department has one or two lifetime care customers, etc. These people will be sprinkled like confetti across government agencies. It should be common sense to everybody that all government employees who have been injured at work, and have got to the point where they are seriously injured people, should be managed and provided services of a uniform quality and of a uniform nature. ReturnToWorkSA has a capacity to do that because they have to provide that service for the private sector small to medium-size business enterprises, which are insured with them anyway.

The big people, such as Coles and Woolworths, have to do this now as well. I am saying that it makes sense that, given the government is one employer—it might have people with different insignias on their letterbox, but it is one employer—surely the one employer should manage its one workforce in a uniform way, process their claims in a uniform way, deliver uniform assessment of claims management practice and deliver uniform opportunity for people to get return-to-work services, and, if they are sufficiently badly injured, uniform delivery of serious injury services. For those people who are looking for the jack-in-the-box—

The DEPUTY SPEAKER: The pig.

The Hon. J.R. RAU: The pig—this is not the one. Private members' time is really the place to look for that sort of thing. But not this place, not this one. This one is nothing more or less than what it says. I have not come in here saying, 'The government will save a gazillion dollars if we do this.' I do not have the bike pump on this, pumping the thing up, trying to fill it up with helium so that it can float around the place and look better than it is. I am not putting any lipstick on the pig. It is what it is. I know that is disappointing, especially for the member for Bragg, who loves that sort of thing. This is not that sort of thing. This is very straightforward.

I hope members appreciate that the overwhelming motivation in this case is to deliver better return-to-work services to state government employees. The state has an obligation under the Return to Work Act to be the best employer it possibly can be for all of its employees. We have a particular government agency now, which is a high performing agency. I accept the member for MacKillop's criticism that it was not, and I totally agree with him—it was not, and if this were a few years ago I would not be doing this in a month of Sundays.

Because that agency is now an efficient good operation, and because it is a government agency and because it is delivering a good service to all the small and medium-size enterprises that are out there paying premiums to this agency, it is reasonable for the government to take advantage of the best service available in South Australia for this type of need, and that happens to be our own supplier of the service.

That will mean that all our employees, wherever they are, get decent, fair, skilled treatment in circumstances where their particular injuries can contribute to overall improvements in safety across government. It also contributes to another thing; that is, under the Return to Work Act the employer has obligations to make alternative employment available to an individual worker. This is an important point, and I think the member for MacKillop might find this interesting.

Under the new legislation, each employer has an obligation to find alternative work for an employee who has been injured at work if they are not for some reason connected with that injury unable to return to their previous work. The way that plays out with people like Coles and Woolworths, which are big employers, is, 'You used to work in the storeroom. You've hurt your back and you can't work in the storeroom anymore,' and they find you a job where you go around with a clipboard and look at barcodes or whatever it might be, but they find another job for you. They have to find a job; that is their responsibility.

Mr Knoll interjecting:

The Hon. J.R. RAU: Except if you are seriously injured. Although, I have to say that seriously injured people under the new scheme are making quite seriously outstanding improvements, but do not sidetrack me on that.

The other point is this. I would like to see every government employee who is injured, and who for whatever reason cannot return to their present place of work, be in a position where the government genuinely does behave as one employer. Just because you were injured in Health, for example, and Health say, 'Sorry, we can't find anywhere for you,' that is a lot harder to do and a lot harder to dodge when the government has one complete line of sight across the whole of government to try to find that person a place to go back to.

At the moment, we have silos across government, a dozen of them or whatever there are. Again, I am being very frank today. I always am, but today I am being particularly frank. There are some agencies that are not very good at finding spots for their injured people to go back to.

Mr Williams: Name them.

The Hon. J.R. RAU: No, I don't think that is productive. There is nothing more to the motivation for my bringing this bill to the parliament than I have just described. As I said, I have not come in here all-singing all-dancing, saying, 'It's going to be this. It's going to deliver that. We're going to save a gazillion dollars and everybody is going to feel great in the morning.' I have not said any of those crazy things. I have pitched it exactly at what it is. It is what it is. It is nothing more or nothing less. It is a better way for the state government to look after its employees—that is it.

The DEPUTY SPEAKER: No porkies.

The Hon. J.R. RAU: No porkies. Hopefully, members appreciate that I always do my best to be frank and informative, but in this particular case I got a little bit lengthy because it is a matter about which I care a great deal. I would not be bringing this here if I did not genuinely believe that this was a sensible move to improve the delivery of service to employees. It will not create the fat pig. It will not put lipstick on the pig. It will not do any of those things.

Mr Knoll: You actually don't look fat to me.

The Hon. J.R. RAU: No fat pig.

Mr Knoll interjecting:

The Hon. J.R. RAU: Well, I defer to an expert.

The DEPUTY SPEAKER: Is the pig injured?

The Hon. J.R. RAU: As I said, no pig, no lipstick on the pig. Nothing is for sale.

The DEPUTY SPEAKER: Are you finished?

The Hon. J.R. RAU: I think I have.

The house divided on the second reading:

Ayes 19

Noes 14

Majority 5

Second reading thus carried.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr KNOLL: Deputy Premier, I appreciate that you have ruled out any sort of privatisation, which is a much more direct and definitive response than you provided in estimates last year, so at least that has been cleared up. In fact, had you provided a more definitive answer in estimates last year, maybe the conspiracy theories that abound in the absence of any information would have been quelled.

I want to understand more deeply the way the cost is going to be transposed. I accept the fact that you have said that it is going to be like for like, but I assume at the moment that each department, being their own self-insured agency, essentially just pays for the direct and indirect costs of their claims and under the new act pays the ongoing costs of any payouts, redemptions and/or ongoing support for seriously injured workers. That adds up to a cost divided by the total number of employees and you get an average premium rate.

ReturnToWork is going to have to work out some way to charge departments, and it cannot be just a lump sum cost because there are going to be fluctuations in the number of people in those departments. My question is: how will the levy rate be set? Will it be an agency-wide rate? Will it take into account different classifications of worker? Is it going to be C (the total cost now) equals A plus B plus C plus D plus whatever the different classifications of workers are?

The Hon. J.R. RAU: It is a good question and I will start with the easy bit. The advice I have is that the way we intend to proceed with this would ensure that the premium will be based on estimated costs for post-July 2017 claims each year, which will be informed by an actuarial projection. Because the premium is based on actual claim costs, it is intended to be cost neutral for agencies, with costs building up over time, depending on the agency's costs and performance.

As I explained before, in terms of the accounting units, or the reporting units, each one presently is reporting an amount it is paying in respect of costs associated with return-to-work expense, whether that is wages or whatever it might be. The intention is that, whatever those costs presently are, they will continue to be, in effect, set aside as the premium for the next two or three years, to enable the assessment as to whether or not those are in fact costs that are in line with the performance of the agency. We are not making them take a jump into the unknown to start off with. They are just going to move into a situation where—

The CHAIR: A known unknown.

The Hon. J.R. RAU: A known unknown. Yes, indeed. There is no jump into the unknown at the transition point. There is no cost shock one way or the other. If you need further details between the houses, I am happy to see if we can get further fundamental breakdowns. For example, when you ask me, as you did in your question, 'Are we going to actually take each individual little element within the agency and add them up, or what are we doing?', I would prefer to try to give you that sort of detail between the houses.

The Hon. S.W. KEY: A lot of the constituent issues that I have been dealing with under the return-to-work scheme have been to do with transitional arrangements. I want to know what sort of discretion will be made available to the departments to manage some of the cases where medical expenses, for example, have been ongoing after the period that they are not to be there.

We received evidence this morning from the self-insured employers group and from the Local Government Association that talked about the merits of their having some discretion to be able to look at the worker. Obviously, there is the point that you were making about placing them in suitable alternative work, maybe training or whatever, and I know that that is one of the aims you have. I am just wondering whether there will be the discretion that currently exists in the state public sector to look after people, say, with regard to medical support and services.

The Hon. J.R. RAU: It is a good question. I think that the answer is that the public sector really, as a matter of law, should not be dispensing public funds other than for a lawful purpose. If the purpose is an authorised purpose by some means or another, then there is no reason why that should stop. If the only basis upon which the funds could be dispensed to an individual is an entitlement under the Return To Work Act, then either that entitlement exists under the act or it does not, and that would be the answer to that question.

It may be that some employees, by reason of other things associated with their employment, have some other opportunity to be reimbursed by the employer independent of the Return To Work Act; if that is the case, that would obviously continue. The Return To Work Act would be the guidance upon which the disbursing of public moneys to injured workers would be taking place.

The Hon. S.W. KEY: There is one thing I would like to clarify. You said in your second reading speech that this would probably take a couple of years to finalise; is that correct?

The Hon. J.R. RAU: The reason I say that is that at the moment the statistics we have suggest that within two years 97 per cent of claims, or thereabouts, have been resolved. If we take the starting date for this, assuming it goes through, as 1 July, and bearing in mind that the runoff of the old claims will continue to be managed by the existing people, we would expect that within two years at least 97 per cent of them, or thereabouts, would have flushed through the system; therefore, by that time we will have a very good idea how each agency is going.

The Hon. S.W. KEY: Following on from that, we are expecting this bill to get through and be passed and that it will have an operative date of, say, 1 July. If a worker gets injured in the public sector who is covered by this legislation in August of the same year, who will be their case manager?

The Hon. J.R. RAU: Who will be their case manager? The answer is: I do not know. The claim would be managed by ReturnToWorkSA. How exactly they determine to manage the claim I guess would be a matter for them, and I expect that it would vary from agency to agency and claim to claim. If what you are asking is whether it is possible that one of the current claims agents they use might be involved in the claim, then the answer is that it is possible, yes.

Mr KNOLL: On the same line of questioning, obviously now we have EML and GB. They are going to continue to be the claims agents when things switch.

The Hon. J.R. RAU: In the not too distant past, there was an extension of the current arrangements whereby there are two agents that are providing services to ReturnToWork—

Mr Knoll interjecting:

The Hon. J.R. RAU: Yes. We are not disturbing that. That has just happened anyway, independent of this.

Mr KNOLL: I want to pick up on the other point the member for Ashford made. So, essentially, if you are injured on the 30 June you stay with the agency, and if you are injured on 1 July you go with ReturnToWork and EML or GB?

The Hon. J.R. RAU: Yes.

Mr KNOLL: I understand, Attorney, that potentially this was just going to happen as an administrative stroke of the pen, per se. You have obviously received advice that this bill is necessary to pass in order for these changes to be made.

The Hon. J.R. RAU: Yes. I originally contemplated that it would be a simple matter for the state to determine how it used its own agencies to provide services to itself. That turned out to be a slightly oversimplified version of what is required. For that reason, we have introduced this bill.

Mr KNOLL: Given the fact that it is 11 May and this bill is likely to wind its way through a recalcitrant Legislative Council and sit there indeterminate for months while they have lunch at the Adelaide Club, what happens if this bill does sit in the other house?

The Hon. J.R. RAU: As I said before, I am a glass half full sort of person. I hope that they will look at it, read the contributions that we have all made here and say, 'On reflection, it all makes perfect sense,' and give it a tick. If that does not happen, I guess I will be asking the government representatives in the other place to prioritise this bill in an attempt to have it dealt with before that date. If it is not dealt with before that date, we will just have to manage with whatever we are given.

The Hon. S.W. KEY: Assuming this bill does eventually get through the Legislative Council and become law, what will the status of enterprise agreements and industrial provisions that currently exist be? Will any adjustments need to be made to them? I am particularly thinking of people who have the age-old problem of being injured or becoming ill as a result of their work and then are all of a sudden made redundant, sacked or whatever else. There are obviously industrial provisions that look at those issues, but how do those vehicles operate? Is there anything that needs to be renegotiated with the employee representatives who are a party to those industrial agreements, for example?

The Hon. J.R. RAU: That is a very good question. The answer to that question is that the substantive rights of the employees are not being affected in any way. It is the method by which those rights are being delivered to them that is changing, inasmuch as those rights refer to return-to-work matters. One benefit of this to those workers is that, because for the first time there will be a line of sight horizontally across government, I am very optimistic that we will have a better opportunity of being able to re-engage injured workers who, for whatever reason, cannot go back to their home place of employment.

We will have a better chance of being able to look across government to find a place to put them back in to. Particularly for returning workers who have trouble going back to what they were doing before, this should mean that the option of the government providing a suitable alternative is enhanced.

Mr KNOLL: I want to respond to the member for Colton, who made two mistakes in his contribution. First, I love WorkCover. I love ReturnToWork and I think the scheme is doing a great job. I was a fan of Greg's, and I am a fan of Rob, Matthew Francis and the whole team. I think they are doing sterling work, so I do not want anyone to suggest that I am not as big a fan and groupie as they come, to the extent that one can be.

Secondly, the member for Colton made some extraneous remarks trying to suggest that somehow those who were on the scheme had different sets of conditions—that those were self-insured when, in all seriousness, it is the same scheme and the same act and regulation; it is just about which bucket they sit in. To try to suggest that somehow by transitioning a different set of regulations will apply to help bring down cost and improve performance is wrong.

Notwithstanding that, have any departments—and, if so, can you advise me of them—asked not to be included in the move, other than the ones that have already been talked about, that is, SA Water, the RDNS and RSB?

The Hon. J.R. RAU: To my knowledge, at the present time there are four. We put in here a carve-out opportunity so that if in due course it turns out there is a good reason for a carve-out to occur, we have the capacity to do that. But at the moment, the four are SA Water, the RDNS (Silver Chain), the Royal Society for the Blind and Minda. In respect of each of those, we have given them clear assurances that we will work out a way so that they are not in any way inconvenienced.

Mr KNOLL: So, the Courts Administration Authority and SAPOL are coming across?

The Hon. J.R. RAU: As far as I know. I heard by way of remarks made today in the chamber that Julie-Anne Burgess had made some comments at Budget and Finance. Those have not been expressed to me, personally, and I am not aware of them being drawn to others' attention either.

Mr KNOLL: I would say that you take the positive, 'glass half full' Attorney approach to life. Are departments ready to move by 1 July?

The Hon. J.R. RAU: It is not so much the departments moving it is the question of whether ReturnToWorkSA is ready to undertake the claims as they start rolling through. The departments will have an existing structure which is working off the tail, if you like, of their existing claims. That will just be a gradual wind down for them, so I do not think that will be a big deal for them. I have received assurances that when we start ReturnToWorkSA we will be able to hit the ground running.

Mr KNOLL: By way of a final question, Attorney, will the detail that you are going to provide between the houses in relation to cost identify reasonably specifically the formula by which the numbers are going to be made?

The Hon. J.R. RAU: I will arrange for a briefing for the member for Schubert so that he can sit down with those who know these details and satisfy himself as much as he needs to and ask whatever questions he needs to ask. I am not trying to be in any way—

An honourable member interjecting:

The Hon. J.R. RAU: No, I am not hiding the pig.

Clause passed.

Remaining clauses (2 to 4) and title passed.

Bill reported without amendment.

Third Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide) (17:48): I move:

That this bill be now read a third time.

Bill read a third time and passed.