WORKCOVER CORPORATION

The Hon. J.A. DARLEY (14:56): I seek leave to make a brief explanation before asking the Minister of Police, representing the Minister for Industrial Relations, questions in relation to the WorkCover Corporation.

Leave granted.

The Hon. J.A. DARLEY: On 30 March 2006, the WorkCover Corporation issued a media release regarding its funding position. WorkCover's CEO, Julia Davison, stated:

We have made a great deal of progress in the past 12 months in implementing changes needed to turn the scheme around. However, the benefits of those changes will take time to flow into the actuarial assessment and the financial result.

Further, she stated:

We are confident we have the right settings in place to achieve improved service and results in coming years for injured workers and employers who fund the scheme, and we remain on target to achieve full funding by 2012-13.

My questions are:

1. Given the comments made by WorkCover, will the minister advise why there is a need for urgent amendments to the legislation?

2. Does the minister concede that a paradigm shift in the culture of all parties involved in the WorkCover scheme is essential and, if so, what action will be undertaken to ensure this occurs?

The Hon. P. HOLLOWAY (Minister for Police, Minister for Mineral Resources Development, Minister for Urban Development and Planning) (14:57): They are matters for my colleague, the Minister for Industrial Relations. However, I think it should be clear to everybody that the WorkCover Board is ultimately responsible for the management of that scheme and has broad representation from unions and industry—the head of Unions SA and the head of Business SA are both on the board. The honourable member should read the statements they made at the time which clearly indicated that they did not believe that the system was achieving financial or fiscal stability. Obviously, in the 12 months since they made their statement it is clear that the deficit has been increasing rapidly, and that is why the government has taken the action that it has.

In relation to the other opinions the honourable member makes about culture, again, I think all of us who are aware of it would agree that the WorkCover scheme within the state has evolved in a particular way. It does appear to have cultural differences, if you like, that schemes in other states do not.

The bottom line is that the cost to employers is much higher in the state than in any other state, but the return-to-work level is much poorer than in any other state. Of course, those two factors are not unrelated. Obviously, if you have a poor return-to-work record the scheme will cost more. That is why the government is seeking to address it. Whatever one might think about the solutions to that, I would have thought that everybody now would agree that it is not sustainable to have a system that has a liability of—

The Hon. J.M.A. Lensink interjecting:

The Hon. P. HOLLOWAY: 'It wasn't under us,' the honourable member says, but I am mindful that, just before the 2002 election, the previous government dropped the rates.

Members interjecting:

The Hon. P. HOLLOWAY: Just before the election, the board—

Members interjecting:

The Hon. P. HOLLOWAY: That is right; it is a statement of fact. Just before the election it dropped the rates. Clearly, that was not sustainable. What this government will not do is play politics, which is the opposition's history—playing politics. That is historical fact. If the honourable member thinks that the government is going through this WorkCover exercise just because we are masochists or for the fun of it, he can think again. We are doing it for one reason only: the fiscal stability of the scheme is under threat and injured workers deserve a scheme that is sustainable. That is what the government is seeking to achieve.