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

Second Reading

Adjourned debate on second reading.

(Continued from 31 May 2017.)

The Hon. J.A. DARLEY (16:31): This bill will transfer injury management to ReturnToWorkSA for government employees. The minister in his second reading indicated that the impetus for this was consistency. The minister advises that at the moment there are 12 separate operating units undertaking injury management functions for their agencies. They operate differently and the ability to determine the manner in which they manage injuries is limited, as outcomes are measured differently (if at all), statistics are kept differently and it is impossible to compare whether or not these units are operating effectively because the benchmarks are different.

Anecdotally, I understand that there are some schemes that are running very well, but on the other hand there are other schemes that are very bad. Ironically, we do not know what is considered good or bad because there are no benchmarks. I have no problem with moving schemes to ReturnToWorkSA that are not performing well. However, it would not be prudent to move a scheme to ReturnToWorkSA which is operating well where they could be in a system that is worse not only for the injured worker but also for the employer.

The government has not identified to the parliament which organisations are performing well and which are not. I have asked and been advised that they are unable to identify them due to the fact that there are either no or differing measurement benchmarks. The government has not been able to provide any information that this move is necessary or beneficial; instead, it is merely for consistency. In my view, there is no point in being consistent if it means that your standards fall from where they currently are.

No injury management or workers compensation scheme is perfect. However, there is no secret that ReturnToWorkSA's predecessor, WorkCover, was plagued with problems. It was one of the worst schemes in the country and at one stage it had a whopping $1 billion unfunded liability. The government has been lauding the success of ReturnToWorkSA since the changes were made a few years ago. However, I believe it is still too early to tell. The government put many of the current complaints down to people transitioning from the old scheme to the new scheme. However, I believe there are many cases where there are genuine grounds for complaint.

People who are injured but do not meet the 30 per cent whole person impairment threshold are cut off after two years. People who face a lifetime of medical expenses will have to cover these costs themselves after three years. I am not sure if it is coincidental, but there seem to be many people out there whose injury is only 28 per cent or 29 per cent WPI. This makes them ineligible to be a seriously injured worker and limits the compensation payable to them.

I am particularly concerned about transferring emergency services workers to a scheme that does not allow for psychiatric injuries to be included unless it is 'the significant contributing cause of the injury'. Emergency services workers are exposed to many horrific situations that play an enormous part on the psyche. A person who may have a physical injury that is 29 per cent WPI and a psychological injury that is 28 per cent WPI would not meet the 30 per cent threshold.

To be refused compensation because psychiatric injuries are not the contributing cause of the injury would be devastating and detrimental to psychological health. It has been put to me that this is merely a step in the government's move to sell ReturnToWorkSA to a private provider. In a letter to me dated 29 May, the minister stated:

This is not an attempt to 'fatten' ReturnToWorkSA in preparation for privatisation. There are no such plans. There is no plan to fold private self-insured employers into the registered scheme under ReturnToWorkSA. It is not contemplated in this model that there will be cross-subsidisation across the public sector and private employers. The premium pools will be kept separate. There is no secret plan. It is what it is.

Whilst I am heartened to hear this and am thankful to the minister for providing this information to me in writing, I am still sceptical. This minister may not have plans to sell, but this transfer would make it an attractive golden goose for other ministers in the future.

If there are no plans to sell ReturnToWorkSA and the government is truly doing this just for consistency, unfortunately the information they have provided is still lacking and I am unable to support the bill. I oppose the second reading but acknowledge that, with the opposition's support, the bill is likely to reach the third reading after going through the committee. This matter has been brought on in a bit of a hurry.

I have requested information from the government and am still waiting on it. Ideally, this matter would not be progressing today; however, I do not want to hold up the parliament. Given this, I reserve my right to change my position on the bill following the debate in committee.

The Hon. P. MALINAUSKAS (Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (16:37): I would like to thank honourable members for their contributions. I would also like to emphasise that these reforms are not about privatisation and not about savings. There is no conspiracy here. These reforms are simply about a better workers compensation scheme for South Australia, which will benefit everybody.

ReturnToWorkSA has made significant improvements in the outcomes for injured workers in this state. They provide high-quality claims management and return-to-work services to over 50,000 registered employers. It makes sense to have the insurer for the state manage the public sector work injury claims also. The ReturnToWorkSA service delivery model has many benefits for injured workers, including access to telephone claim reporting, mobile claims management services, and access to established and effective reskilling and retraining programs.

ReturnToWorkSA also has highly developed IT systems and data analytics, which would be of huge benefit to the Crown in identifying and managing risks. This level of data capability is currently unavailable within the Crown. The bill will also strengthen the support for workers who are unable to return to their pre-injury role in finding something suitable for them in another government agency. Currently, it can be challenging for agencies to have line of sight over other employment opportunities for workers across government. Government agencies will not be impacted financially.

There has been extensive work undertaken by ReturnToWorkSA and the Department of Treasury and Finance to ensure the reforms will be financially cost neutral. A key point is that the arrangements for government agencies will operate separately from the current registered scheme. There will be no effect on the premium for the current registered scheme for private employers as a result of the proposed reforms.

ReturnToWorkSA will recover the costs of the government's workers compensation claims and its own administration costs in managing those claims. It will generate no profit or loss, nor will it improve or deteriorate its net asset position as a result of these reforms. The intent is to transfer the management of the government's workers compensation claims to ReturnToWorkSA and to achieve a neutral financial outcome for both ReturnToWorkSA and government agencies in the first instance.

As is the case now, the factor that will dictate financial outcomes for the government is the incidence of workplace injury and the effectiveness of claims management and the achievement of return-to-work outcomes. The reforms will provide an opportunity to all Crown agencies to focus on risk management and prevention strategies, and make a real difference in the prevention of work injuries within their workplaces.

This should be the focus of all agencies. Work injury claims management is not core business for agencies and having ReturnToWorkSA as the specialist agency undertaking claims management makes sense. There has been extensive engagement and consultation with key parties regarding the implementation of the transition.

Public sector employees have been provided with a number of written communications from the Commissioner for Public Sector Employment as well as face-to-face information. There have also been eight workshops run by the Office for the Public Sector for public sector injury management staff. The Office for the Public Sector website provides information on the changes as well as the opportunity for public sector injury employees to ask any questions and raise issues.

Public sector injury management staff have also been assured that there will be no reduction in the injury management workforce over the next 12 months due to the transition. The Commissioner for Public Sector Employment issued a communication in May 2017 to all agency chief executives reinforcing this assurance. Public sector injury management staff will continue to be required to manage the current claims, as only claims with a date of injury on or after 1 July 2017 will be managed by ReturnToWorkSA.

Some of these claims may require management for up to three years, inclusive of medical entitlements. In addition, there will also be the requirement for agencies to have return-to-work coordinators in accordance with section 26 of the Return to Work Act 2014 to work with ReturnToWorkSA to support their injured employees in their recovery and return to work.

I hope members appreciate that the overwhelming motivation in this case is to deliver consistent return-to-work services to all state government employees. The state has an obligation under the Return to Work Act to act in the best interests of all its employees. We have a particular government agency, ReturnToWorkSA, which is a high-performing agency.

ReturnToWorkSA is delivering good service to all registered employers in the state and it makes sense for the government to take advantage of the best of service available in South Australia and that happens to be our own supplier of the service. It is simply a better way for the state government to look after its injured employees and I genuinely believe that this will improve the delivery of service to employees and achieve better outcomes. To me, it all makes perfect sense and I ask members for their support and endorsement of the bill.

Bill read a second time.