Workers Compensation Premiums

The Hon. H.M. GIROLAMO (15:02): I seek leave to provide a brief explanation before asking the Attorney-General a question about workers compensation premiums.

Leave granted.

The Hon. H.M. GIROLAMO: Last year, this parliament rushed through the legislation relating to the Return to Work (Scheme Sustainability) Amendment Act. The Return to Work scheme has the legislative target to achieve an average premium below 2 per cent. On 23 May this year, via a media release, the Attorney-General announced that the premium fixed for the coming financial year will be set at 1.85 per cent. This represents an increase of 0.05 per cent to the rate. My questions to the Attorney are:

1. The premium has increased to 1.85 per cent in the first year of the revised legislation. Is the Attorney still confident that the target of 2 per cent will be achieved?

2. What is being done to ensure it doesn't go above 2 per cent?

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:03): I thank the honourable member for her question. I've got to say I am loving question time today. Most of these questions could well have been written by members of the Labor Party.

A bit of context here, a little bit of context about return to work and the average premium rate. When the government changed in March of last year, what was being faced was the policy of the former Liberal government, the policy of the Hon. David Speirs, and what the Liberal policy was was to do nothing in relation to the Summerfield decision. What that would have meant, what the advice was that we got—the same advice that David Speirs' cabinet would have got—

The PRESIDENT: The Hon. David Speirs.

The Hon. K.J. MAHER: —the Hon. David Speirs' cabinet would have got—is that nothing being done would have seen the premium rates likely go to 2.2 or above. So the Liberal Party policy was to ensure that there was going to be about $250 million a year of extra costs for businesses across South Australia. That was the Liberal Party policy.

We came to government and got the same advice that the Hon. David Speirs, when in cabinet, and his party had, and it wasn't an easy debate. We spent many hours here, and I got glaring looks from many of the crossbench, and after many hours of debate—a challenging but necessary debate—we made changes to the Return to Work Act. What those changes did was to enshrine in legislation the principle that was at the core of the Summerfield decision for combination injuries.

What it also did was to raise the whole person impairment threshold from 30 to 35 per cent. They were essential changes for a very difficult circumstance we found ourselves in, a circumstance that the Liberal Party didn't want to change. As I said, their view was: let businesses pay a quarter of a billion dollars a year more—a quarter of a billion dollars more every single year. That was the Liberal Party's choice; that's what the Hon. David Speirs wanted for South Australian businesses.

This government, and consequently this chamber and the other chamber, as a parliament, made those changes after many hours of debate and negotiation—sensible compromise changes. At the time I think it was stated, from the actuarial advice that was received, that the changes should be capable of seeing premiums kept to under 1.9 per cent as a result of the changes. What we saw was a decision from the WorkCover board for the average premium rate for the year ahead to be set at 1.85 per cent—under the 1.9 per cent. And do you know what? We are even hearing the Liberal opposition complain about that.

They are complaining that it was kept under 1.9 per cent. It is ridiculous to hear complaints about it being kept under 1.9 per cent when their policy was to see it skyrocket to at least 2.2 per cent. We are very glad that we were able, as a parliament and a government, to handle this in a constructive way that saw changes made that have seen such a low increase to the premium rate and that don't impose that quarter of a billion dollars on businesses that was the Liberal Party policy, while also maintaining an ability to have injuries combined under the Summerfield principles.

Members interjecting:

The PRESIDENT: Order! I want to hear the Hon. Mr Ngo's question.