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House of Assembly - Fifty-First Parliament, Second Session (51-2)
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WORKERS REHABILITATION AND COMPENSATION (SCHEME REVIEW) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 28 February 2008. Page 2332.)

Mr HAMILTON-SMITH (Waite—Leader of the Opposition) (11:03): I rise to speak on this most important bill, which is necessary as a result of WorkCover's $1.3 billion black hole, which is a legacy of the Labor government. How disappointing it is that on the day we are to debate this most important issue the government has chosen to bring on another very important issue—the Mullighan inquiry. How much better it would have been if we could have dealt with one and then the other. I think it is obvious why it has been done that way.

For six years the Premier and his minister have fiddled with this scheme while its financial performance has worsened. Mr Speaker, I point out that, although I am speaking first, I am not the lead speaker on this bill. Labor changed the WorkCover Board to make it in its own image, but it will not accept responsibility for outcomes under the management of that board. In November 2006, when confronted with the need for legislative change, state Labor chose politics above performance and delayed until after the federal election. State Labor spent all of 2007 bemoaning the federal government's WorkChoices legislation while secretly planning to cut the entitlements of workers. It is a disgrace, and it is a Labor disgrace! Premier Rann now claims that the only way to fix the WorkCover problem is to proceed with the Labor Party's plans to cut payments to workers. The problem is that this is the third time that this state Labor government under this state Premier has claimed that it will fix WorkCover. It claimed shortly after it was elected in 2002 that replacing the board and replacing senior management would result in better performance.

It claimed 18 months ago that changing claims management from a multiprovider model to a monopoly would fix the return to work problems that had beset the scheme—neither of these claims has come to fruition. So, here we are again, with the government claiming that it has a solution. But before we talk about solutions let us talk about and understand the problem. Where are they? We have this most important bit of legislation this year and where is the Premier? Where is his front bench? Where are the backbenchers who meekly went along with this? No-one is here—just three members, quietly sulking in their chairs. The Minister for Industrial Relations claims that the problems that have beset WorkCover have their origins in decisions made by the Liberal government in 1994 and 1997. What a load of arrant nonsense.

What did Alan Clayton make of that outrageous claim? At page 8 of his report, Mr Clayton said:

...the WorkCover scheme was reasonably stable during the late 1990s with the availability of redemptions successfully extinguishing significant amounts of tail liability. At the same time reported claim numbers continued to reduce. During the same period claim payments were well controlled, reducing in real terms throughout the five-year period. The average levy rate stayed at 2.86 per cent of wages, allowing a gradual erosion of the deficit such that the scheme achieved a high point funding ratio of 97 per cent as at June 2000. The scheme began the 2000s in an apparently healthy position with respect to both financial stability and reputation for forward thinking.

I think that the statement 'the scheme began the 2000s in an apparently healthy position' is worth repeating. Since the Rann government fell into power in 2002 WorkCover has become a disaster. It now threatens the state's financial reputation and credit rating to the tune of $1.3 billion. We all remember the day that Standard and Poor's delivered the state's first AAA credit rating since the dark days of the State Bank—a rating delivered on the back of reforms made by Liberal governments to fix their mess. The rating report made it clear that the economic decisions of the Olsen government were the reasons for that AAA rating, but what Liberal governments make Labor governments taketh away.

The economic decisions of this government—in the best of times, I add—have managed to place us in a position where, again, we face the problems of debts and unfunded liabilities. Here they go again! The Labor government has tried several times to undo the damage it has done to WorkCover, but when the government ran out of ideas it commissioned Alan Clayton to come up with a set of solutions. His recommendations have now been hastily pulled together into two bills before this house, but will it fix the problem? The opposition believes that these bills contain serious errors.

The bills contain errors that will have an adverse effect on the scheme's performance. They contain errors that will have an adverse impact on injured workers who have no immediate prospect of returning to work. They contain errors that will have an adverse impact on older workers, on apprentices, on trainees and on small business. But, worse than that, the ongoing poor performance of WorkCover and its minister has not only an economic cost but also a social cost.

This bill is so fundamentally flawed that a swag of amendments would do nothing more than shift the responsibility for this ugly mess from the government to others. To make changes to this bill would be similar to putting the best possible wheels on the tyres of a dodgy second-hand car. It would be like putting a fast train on a poorly maintained rail line, or building a bigger dam to hold non-existent water. This bill is the latest example of a government full of bad ideas.

Let us look at some of the key proposals in this legislation package and pose the question: why do they think it will work? I refer, first, to reducing worker payments after 13 weeks on the scheme. Where is the economic modelling that says that this will have an impact on return to work rates? Where is the modelling that shows the difference between a step down at 13 weeks compared with 26 weeks?

I note that the Clayton report makes comparisons of the state's step down levels and return to work, but that is not genuine modelling of the case load here. Why is it that claims numbers and duration were able to be controlled in the period 1994 to 2002 without making cuts to payment levels? Has the government considered whether a step down at 13 weeks could have the impact of forcing workers back to work before they are ready and possibly placing them at further risk? The opposition is not convinced that the 13 weeks step down provision will have the impact the government believes it will have. We will see.

Secondly, the legislation changes the definition of average weekly earnings and also sets a cap on that figure. The industries more likely to have injured workers are traditionally highly paid industries. The Premier likes to talk up the mining boom, but it should be remembered that he opposed Roxby Downs. He said that it was a mirage in the desert, but nowadays he likes to talk it up. However, the legislation penalises the highly paid mine workers.

I was at Prominent Hill last week where a dump truck driver earns around $2,000 a week, but if he or she is injured they drop down to 95 per cent of $1,190, and after 13 weeks to 75 per cent of $1,190. In cases of genuine injury we are penalising workers. It is very likely in these cases that workers will return to work before they should, thereby making the workplace more dangerous. That is just irresponsible.

The Treasurer—the champion of the bill—is shaking his head. Well he might shake his head, because there are a lot of people in the Labor Party shaking their head about this bill and his role in it. The raft of recommendations will be dealt with in detail by my colleague the member for Morphett, but I will dwell on one issue that shows just how desperate is this government, how irresponsible is this government.

The legislation proposes that WorkCover levies be paid by small businesses in advance. This is just plain nonsense. Employers currently pay superannuation, income tax, direct debits and WorkCover levies, with or after the payment of wages. Many small businesses are working close to the edge at the moment due to rising interest rates, a stalling economy and an exorbitant increase in state taxation in the six-year life of this government.

In many cases, these businesses could be tipped over the edge if they have to pay a double whammy of the current levies due and future levies payable in advance. I know these days the Labor Party likes to cuddle up to big business, but just remember most of the businesses affected by this bill are small employers. They are mums and dads; they are family businesses. Funny about that. The next time you are cuddling up to big business at a lunch, just ask them whether they are representing the small guys. When these small business go under, workers lose their jobs. This proposal has nothing to do with return to work rates, nothing to do with rehabilitation and nothing to do with efficiency. It is a grab for cash. The legislation before the house is bad law. It is punitive. It is inefficient. It is not the solution the government so desperately needs.

The Hon. K.O. Foley: What's the answer?

Mr HAMILTON-SMITH: We will tell you in the fullness of time. Unions have found more than 30 points of contention with this bill. Business groups have also raised 17 parts of the bill that need change. Curiously, these same groups have spent a lot of money advertising their position that the bills before the house should be passed (as they are) without delay. Their view is that the perilous state of WorkCover delivered by this Premier, this Treasurer and this minister is so bad that a bad fix is better than no fix at all. Strikingly reminiscent of the mess they delivered last time—this Premier and this Treasurer—with the State Bank.

The union and business viewpoints show the widespread frustration with this latest Labor state government disaster. Here they go again. In line with the now established tradition of Liberal governments fixing the financial mistakes of Labor governments, we will develop our own WorkCover model and bring it to the house well before the next election—and it will be one that works. In the meantime, we will allow the government's bill to proceed without amendment. The Labor government is incapable of running our WorkCover scheme competently. So workers are to suffer and small business is to suffer. This is your stinking mess and your messy solution to your stinking mess.

Labor's solution to its mismanagement of WorkCover is to cut workers' rights, make life more difficult for small business and cast off long-term claimants onto commonwealth welfare—not what these members of parliament were saying back in the 1990s when they debated similar legislation. My, the shifting sands of principles within the state Labor parliamentary party. It is the greatest economic cop-out since it used poker machines to solve its State Bank cash flow crisis. It needs to be made very clear to the people of South Australia that this is a Labor problem and a Labor solution, and it is a mess.

From here until the next election, we will hold the government to account for this mess and its messy solution. We will hold it accountable for the fiscal disaster it has delivered and the mistakes it has made over the last six years, and we will hold it accountable for the mess we are sure it will continue to deliver from now until March 2010, when, hopefully, the good people of South Australia will see an end to this silly and ineffective government. What a shame the government has chosen to bring forward the important matter of the Mullighan inquiry today. This WorkCover law is Labor's law. The voters of this state will not forget you for what you have done.

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (11:20): I think what we have witnessed today is the stripping bare of an opposition leader who has no credibility and no substance.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: I hope not just the media of this state but also all decent thinking people realise the political web that the Leader of the Opposition is attempting to weave. We have had nearly 20 minutes—

Mrs Redmond interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: We have had nearly 20 minutes of the Leader of the Opposition telling this parliament how bad Labor's law changes to WorkCover are, how terrible they are for working people, how terrible they are for small business, and how this will deliver ruin to the economy and the social fabric of South Australia. Then, at the very end, he says, 'Oh, but, by the way, we are going to put our hand up and support it without amendment.' Mr Speaker, this day will go down as one of the most politically cynical days that an opposition leader has ever presented himself in this parliament.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Mr Speaker, never before in my 14 years in this parliament have I witnessed a time when an opposition leader has spent 18 minutes telling us what Alan Clayton, John Walsh, the WorkCover Board, the chairman—

Mrs Redmond: What about the workers?

The Hon. K.O. FOLEY: If the opposition—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: If the opposition wants to be taken seriously as a strong alternative leadership of this state, why will it not oppose the bill? If it thinks—

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: If the opposition thinks that it can cutely get away with saying that this is bad law—

Mr Hamilton-Smith: You watch!

The Hon. K.O. FOLEY: I think the people of this state are starting to realise that this leader will say anything and do anything to get a headline. The Leader of the Opposition is attempting to cutely walk both sides of the street. He wants to tell the workers that he is the workers' friend. Then he tells business when they come to see him that he is the friend of business. He wants to be able to say that he will support no change to benefits—and, as his shadow minister has said, there will be no changes. But then he says, on the other hand, 'We are going to let the law pass.' If the Leader of the Opposition has any conviction and any moral strength on WorkCover, he should oppose the bill, and he should oppose it in the upper house, because he can block it.

Members interjecting:

The Hon. K.O. FOLEY: No, hang on.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: If you say it is bad law and it will ruin the state, how can you in all good conscience stand in this place and say you will support it? You know it is good law and you know it is the answer. You have been telling business you will support it. The leader has been out there telling business he will support it. He is telling anyone from business who has rung him to lobby him on their behalf that he will support it. But he wants to walk two sides of the street. He wants to be the friend of the worker but he tells business in private discussion that he is going to support it. He is a shallow leader. He is a leader with no substance. He is a leader who will say anything and do anything to get the popular vote.

Governing the state is difficult. Governments have to be competent and make hard decisions when hard decisions are necessary. Opposition leaders such as Mr Hamilton-Smith want to play politics with every decision. Today's decision by Mr Hamilton-Smith is the most hypocritical political move that any opposition leader has ever made. I think today is the beginning of the end of the leadership of Martin Hamilton-Smith.

Members interjecting:

The Hon. K.O. FOLEY: I will say that again, Mr Speaker. Today is the beginning of the end of the leadership of the Liberal Party of Martin Hamilton-Smith, because he will say whatever it takes. He will say anything and do anything to get the popular vote. He has said today that he wants to be the workers' friend, but he will support the bill. He says one thing and does another.

This reminds me of what Joe Rossi (the former Liberal member for Lee) did one day. He could not make up his mind whether he supported or opposed something the government did. It was just before lunch time, so he had his meat pie on his plate. He came in for the division, and he did not know whether to support or oppose the government, so he stood in the middle with his meat pie and sauce. Today, the Leader of the Opposition has sat in the middle of this place with his meat pie and sauce, because he cannot make a decision.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: Martin Hamilton-Smith is too tricky by half. He wants to be the angry man. The Leader of the Opposition is the angry opposition leader. Well, the angry opposition leader's leadership today has stumbled at the most important—

Mr Pengilly: Get out the front and tell the truth—

The SPEAKER: Order!

The Hon. K.O. FOLEY: The Leader of the Opposition's political future and fortunes have started to nosedive from today on, because he has demonstrated that he does not have the political or administrative capability to run this state. Sometimes you have to make hard decisions in government; that is what people elect us to do. You cannot come in here and say that you oppose the bill because it is bad law: 'I am the friend of the worker but, by the way, we will let the bill pass without delay and without amendment.' I think that South Australians and the trade union movement will see through that.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: There was a suggestion that the government cuddles up to big business. What a ridiculous remark. The Liberal Party is the party of big business; we all know it. However, we will demonstrate that we have the capability and capacity to work with business and trade unions to get the balance right. This is good law. It is controversial and it is not without pain, but it is good law, and it has the support of a large number of objective people who have analysed this bill.

Mr Pengilly: Go out the front and tell the unions.

The SPEAKER: Order!

Mr Pengilly: Go out the front—

The SPEAKER: Order!

Mr Pengilly: Have a go—

The SPEAKER: Order! I warn the member for Finniss. I should not have to call him to order more than once.

The Hon. K.O. FOLEY: If the Leader of the Opposition is sincere in his convictions, he should go out in front of the trade union movement today and state his case: that he thinks it is bad law, but he will support it. If he has the courage—if the Leader of the Opposition is more than just an angry man in this place and on television—he should walk out and tell the union movement that he thinks it is bad law, and he is with them, but he will support it without amendment. Then let us see the reaction from the trade union movement. I seek leave to continue my remarks at a later time.

Leave granted; debate adjourned.

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