WORKCOVER CORPORATION

The Hon. I.K. HUNTER (15:22): My question is to the Minister for Industrial Relations. Will he advise members of WorkCover SA's financial performance and the progress of the review into the Workers Rehabilitation and Compensation Scheme Review Amendment Act 2008?

The Hon. B.V. FINNIGAN (Minister for Industrial Relations, Minister for State/Local Government Relations, Minister for Gambling) (15:22): I thank the Hon. Mr Hunter for his question. The Chairman of the WorkCover board, Mr Philip Bentley, released WorkCover's midyear results on 24 March, and I am pleased to advise the house that WorkCover has reported profits of $117 million for the six months to 31 December 2010, which has resulted in a significant reduction in the scheme's unfunded liability.

WorkCover has delivered a claims result that was better than projected, and this influenced results by $73 million. This is the main factor under its control that affects WorkCover's results. Additionally, strong investment returns and changes in economic assumptions have contributed positively to the results. It should be noted that this is the sixth consecutive half-year period in which a positive improvement in claims management liability has been achieved. These are good indications that the scheme is consolidating its improved financial performance. The unfunded liability now sits at $865 million compared with $982 million at 30 June 2010, with the scheme funding ratio increasing from 61.5 per cent to 65.9 per cent.

The WorkCover board takes into account a range of factors in setting the levy rate, and it decided that it was prudent to keep the rate steady at 2.75 per cent for 2011-12 for the average levy rate. The chairman of the WorkCover board has said that, while the financial performance of the scheme is improving, it is still early days, and until WorkCover can consolidate a continued long-term improvement it is best to keep the average levy rate as is. Supporting injured workers to stay at or return to work remains the fundamental guiding principle of the scheme. WorkCover will continue to work with injured workers and their employers to improve return-to-work rates.

I was also asked about the independent WorkCover review. As I advised the house on a previous occasion, the government has appointed Mr Bill Cossey AM and Mr Chris Latham to conduct a review, as required by the 2008 amending act. It is worth noting again that the terms of reference for that review are in relation to the amendments made in 2008, not an overall review of the scheme.

I have been advised that the review has received 34 submissions from various parties, employer groups, unions and others, and the independent reviewers are currently reviewing the submissions. I am advised that they expect to be able to provide their final report to me by 24 May which will, of course, subsequently be tabled in parliament. I look forward to updating the chamber about the review and its conclusions in due course.