PARLIAMENTARY COMMITTEE ON OCCUPATIONAL SAFETY, REHABILITATION AND COMPENSATION: SAFEWORK SA

The Hon. G.A. KANDELAARS (20:51): I move:

That the report of the committee, on an inquiry into the occupational health and safety responsibilities of SafeWork SA, be noted.

One of the functions of the Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation is to keep the administration and operation of legislation affecting occupational safety, rehabilitation and compensation under constant review. The committee has a function to examine and recommend to the executive and parliament about proposed regulations, particularly in relation to statutory bodies such as WorkCover.

The committee can also inquire into health and safety and workers rehabilitation and compensation matters on its own resolution or by referral from either house of parliament. To this end, on 12 May 2012 the committee resolved to inquire into the occupational health and safety responsibilities of SafeWork SA and the effectiveness and efficiency of the agency. On 1 January 2013, the new model Work Health and Safety Act and regulations came into effect in South Australia, and this provided the committee with a further incentive to undertake the inquiry.

Historically, there have been several different structural models of occupational health, safety and welfare, now known as Work Health and Safety in South Australia. Following the Stanley review in 2003, all OH&S functions were merged into a new entity—SafeWork SA. This is the first inquiry into the state's health and safety system since the Stanley review.

SafeWork SA has a responsibility to deliver proactive education and enforcement of health and safety programs to all citizens within South Australia regardless of their relationship to WorkCover. This requires SafeWork SA to deliver information, training and education to the community, to students who are getting ready to enter the workforce, to small businesses which are diverse, to volunteers, and many other stakeholder groups.

The Work Health and Safety Act is new legislation with new terminology, new enforcement provisions, and many new codes of practice which need to be understood. SafeWork SA must communicate and consult with businesses and other affected groups regarding implementation, monitoring, enforcement and management accountability. In addition to the challenges of implementing new legislation, in the last 10 to 20 years there have been many changes to the way people work. There are now more contracting, temporary labour hire arrangements, franchising, and small family-run businesses that operate from home.

These business arrangements are varied and complex. When small businesses tender for work with large corporations, they are required to show evidence of an effective safety management system. This is not always easy for small business, which is a major contributor to the state economy.

South Australia achieved a 43.7 per cent improvement in the rate of serious injuries per 1,000 employees between 2008-09 and 2011-12, in comparison to the national average of 27.7 per cent for the same period. Whilst this is a significant achievement, South Australia's record of 10.3 serious injuries per 1,000 workers is only slightly below the national figure of 10.7. SafeWork SA still has a lot of work ahead of it to continue to drive down injury rates in this state.

The committee received a variety of submissions from both employer and employee organisations and appreciated the opportunity to hear evidence from a wide range of witnesses. A number of consistent themes emerged from the evidence. In particular, the lack of medium to long-term strategic planning and resource constraints were identified as an issue that prevents SafeWork SA from effectively delivering prevention programs to the citizens of South Australia.

The committee noted that the lack of resources can easily be claimed as a reason for not undertaking certain activities, but there is a need to be focused on reviewing operational demands to ensure efficiency and effectiveness in the delivery of core business programs. The funding arrangements of SafeWork SA from WorkCover appear arbitrary and at the discretion of WorkCover, with no appeal rights by SafeWork SA. On occasions, WorkCover has delayed decisions about funding for SafeWork SA programs, and this has adversely affected SafeWork SA's ability to implement planned preventative programs. There is a need to review the funding arrangements to ensure that a more effective, efficient and responsive regulatory and preventative service is delivered to South Australian businesses and the community.

A large challenge for all regulators is how they communicate the health and safety messages to small businesses which are both time and resource poor. There is a need for proactive collaboration between SafeWork SA and larger organisations that have a vested interest in improving safety performance. New technologies will also play a part in the role of communication of key initiatives.

There is a large network of independent work health and safety practitioners and businesses, including self-insured employers that have previously been recognised in this place for their good safety performance. This network provides a valuable resource in the education and capacity building of small to medium businesses. SafeWork SA has a responsibility to engage with this network to ensure a consistent approach to the delivery of work health and safety information, education and training.

Another challenge for SafeWork SA is the great demand for their inspectors from the private sector, where salaries are higher. It is important that all inspectors are competent and at the top of their game, which requires training, development and succession planning. The benefit of being an inspector should be promoted. I note that there is a good short video on this very issue available from SafeWork SA's website. The video promotes the benefits and diversity of inspectorate work.

Many witnesses were critical of the lack of inspectorate expertise in high-risk occupations and the failure of SafeWork SA to effectively investigate complex, serious incidents, such as the Spin Dragon ride at the Royal Adelaide Show, which occurred some years ago. SafeWork SA needs to develop a strategy to deal with these types of incidents, such as using other public sector experts, cross-jurisdictional sharing of expertise or the use of consultants, at cost of course.

Witnesses did not support the merging of SafeWork SA responsibilities with WorkCover, because of the potential conflict of interest. Many also thought that WorkCover had its own problems with unfunded liabilities, which were reported to be $1.366 billion, a 63.7 per cent funding ratio, for the 2012-13 financial year. In view of these factors, the committee formed the view that the current arrangements should remain. The committee has made a number of recommendations that aim to address the issues raised in the inquiry.

I would like to express my thanks to all those who made submissions and took time to give evidence to the committee. I would also like to thank the members of the committee—the Hon. Steph Key MP (who is a very able chair of the committee), Mr Alan Sibbons MP, Mr Ivan Venning MP, the Hon. John Darley MLC and the Hon. Rob Lucas MLC—for their contribution and deliberations, as well as the committee staff, in particular Sue Sedivy, who contributed to the preparation of this report during the duration of the inquiry. I conclude my remarks.

The Hon. R.I. LUCAS (21:01): I rise to support the motion. In doing so, there are only three or four of the recommendations that I want to address some brief comments to. It is a comprehensive report. The Hon. Gerry Kandelaars has summarised in greater detail. I join with him in thanking other members and the staff for the work that they have done on the committee.

The recommendations to which I want to address some comments are as follows. The first one is recommendation 8. The Hon. Mr Kandelaars has made some comments in relation to the recommendations in relation to the complicated funding model for SafeWork SA. We have made some general recommendations in relation to this issue, that is that we should ask the minister to review the funding model to ensure that it is transparent for a longer term to allow SafeWork SA to plan strategically and that it be reviewed at least every three years.

The committee finds that it is a complicated process. It certainly does not make good planning sense for SafeWork SA to have to wait year on year to ascertain exactly what its budget is. It needs to have the capacity to plan more strategically, and certainly one would hope at least on a three-year basis. Whether that is done through the current funding arrangement through WorkCover or whether a future government and a future minister can come up with an alternative funding model is entirely an issue for future governments and the minister to look at, but certainly I think the committee was of one mind, that there needed to be a resolution.

It was a genuine issue from SafeWork SA's viewpoint, and putting aside the quantum issue, the issue of having long-term confidence in terms of what your budget is likely to be, or a longer term confidence in terms of what your budget is likely to be, made good sense.

The second issue was recommendation 9. This is an issue on which we took a lot of evidence. This was a criticism from many industry groups, particularly those in the construction industry, that SafeWork SA in recent times had moved away from its old model, where they had specialist people trained in the construction industry doing the inspections in the construction industry. Because they understood the industry, they were able to respond in many cases with advice in terms of how to resolve issues and for the employer and the employee to be able to get on with the business of running their worksites safely, to the benefit of both the workers and to the business as well.

For whatever reason, SafeWork SA, in recent years, has moved to a position where that was not as often the case. Some in the construction industry reported to the committee and to me that they would have people coming to their construction sites with expertise from the retail industry or some other industry. As the construction people said, some of those people with that sort of background were not entirely useful in terms of making sensible judgements about safety issues but, more importantly, giving sensible advice in terms of how to resolve issues in the interests of worker safety and in the interests of the businesses as well.

So, recommendation 9 and all that sits behind it is an important recommendation. I would hope that SafeWork SA and future governments would look at that particular recommendation carefully and place some pressure on SafeWork SA to move closer to the system that used to exist in relation to people with expertise being the people in the position of being inspectors for that particular industry.

The next recommendation is the final recommendation 26. As has been revealed publicly, this term of reference for the committee was my original initiative, in terms of looking at whether or not there was an argument, as occurs in some other states, to merge SafeWork SA and WorkCover. It is fair to say that the majority of the evidence that we took from stakeholders did not support the merger of the two bodies. It is true that a small number of employer organisations did support it, but they were in the minority.

The committee's judgement in the end was that, for those reasons but also making judgements about some recent changes that had been made to the WorkCover board and possible changes to the WorkCover system, now probably was not a sensible time to be looking at a merger of the two organisations. WorkCover certainly has more than enough problems of its own to resolve without having to go through a merger with another body such as SafeWork SA.

The final recommendations that I want to address some comment to were recommendations 21 and 22. Recommendation 22 recommends that SafeWork SA undertake an independent evaluation of research programs to improve work health safety outcomes, and recommendation 21 talks also about the research effort. I wanted to address some comments to this because it was really only in the last 48 hours, literally, that we got some information which we have included in an appendix. We have left the recommendations as they were but, as this was something which I had a keen interest in, I wanted to place some comments on the record.

Because I had some criticism of the research grant program of SafeWork SA given the so many other needs in terms of needs for additional trained inspectors trained in their areas of expertise and a range of other requests for simplified information and explanatory information for employers and subbies, in particular, of the new work health safety legislation and codes and the inevitable budget pressures, I had asked earlier in the committee inquiry of SafeWork SA whether some of the criticism I was getting of the money that SafeWork SA was spending on research programs was valid or not, and whether or not here was an area where money could be reduced and money actually go into the inspection training regime and also in providing information to subbies and others on the complicated new work health safety legislation and codes of practice, etc.

We received some answers from SafeWork SA which are included in the appendix. Members can make their own judgements. We do not get enough detail about the nature of some of the research projects, but certainly on the surface of it there are a number of those that I wonder as to the value of the information that is being provided. Inevitably any information is useful, but you have competing priorities and my argument would be that some of these might only have minimal usefulness in terms of improving work health and safety outcomes, whereas spending the same amount of money on training and inspectors or information for subbies or a range of other initiatives would probably, in my humble judgement, have greater work health safety outcomes.

There are a number, as I said, that have been highlighted to me: 'Hey Presto! I'm a self-employed contractor! What's OHS?' Also, $50,000 was given to the Office of the Employee Ombudsman. There are a number of others that, as I said, unless you get to see the detail of them, you cannot make a final judgement about the worthiness of them or not.

It seemed to indicate that SafeWork SA was only spending in the last year about $900,000 early on in the earlier years and it was only about $85,000 in the last year. I had separate information given to me that there were very large grants being given to unions by SafeWork SA and we went back in the last 48 hours to say, 'How do they match the answers they have given to us and the information that I had been provided with?' Anyway, what came back was a more detailed response in relation to the research program which I think, in the end, was about $600,000 or $700,000 a year, although I am not entirely clear of exactly the response from SafeWork SA on that. I just do not have it with me, but certainly in the documents that are tabled there was detail of how much was being spent.

I had been provided with a program which was separately called Health and Safety Partnerships Program, and they advised us:

The program is different to the WHS grants program and was a three-year program commencing in 2007-08, delivered through registered employee associations to improve the level of WHS training, resources and information available to employees and industries with high levels of workplace injuries and compensation. Under this program the funding, which totalled $1 million per annum, was divided evenly. An independent grants assessment panel was established to review the applications against the funding criteria and make recommendations on project funding.

In the first three or four years the recipients of the grants were: the Independent Education Union; the ASU; Liquor, Hospitality and Miscellaneous Workers Union; Communications, Electrical, Plumbing and Allied Services Union; Australian Manufacturing Workers Union; Australian Workers Union, Textile, Clothing and Footwear Union of Australia; National Union of Workers; the SDA; Australian Meat Industry Employees Union; Construction, Forestry, Mining and Energy Union; and the construction and general division of the TWU. In 2011, the government authorised a three-year continuation—

I note the words from the SafeWork SA advice that the government authorised a three-year continuation of the program, they do not say they are SafeWork SA—

$1 million for each of the financial years 2010-11, 2011-12 and 2012-13.

Recipients of the grants were the ASU, the IEU, AMWU, the CFMEU, the NUW, the AWU, the SDA, and SA Unions. All grant recipients must report on the financial acquittal of the funding provided, detailing the outcomes of WHS training, resources and information provided as part of their contract conditions.

It would appear over about seven years that $6 million or $7 million has been provided to unions under this Health and Safety Partnerships Program. I think it would be useful for not only SafeWork SA but any government post March 2014 to look closely at the value of the million dollars per year going into the union movement here in terms of improvements in work health and safety outcomes.

Whilst the recommendations of the report are in relation to the research grants, as I said, given the fact that this information about the Health and Safety Partnerships Program only arrived in the last 48 hours, can I indicate that at least as one member of the committee my purpose for recommendation 22 and also the argument for it was partly driven by this information in relation to this partnerships program.

It would certainly be my personal recommendation to an incoming government that SafeWork SA should conduct an independent evaluation not only of the research programs but also of these partnership programs to see what improvements in work health safety outcomes are being achieved by the $1 million per year.

Motion carried.