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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 (resumed on motion).

(Continued from page 2361.)

Dr McFETRIDGE (Morphett) (17:33): I sought leave to continue my remarks before the luncheon break and I was discussing at that stage some of the history of members of the Labor Party and their association with the unions. I was doing that because some of the people in the unions I have been speaking to are a bit upset about the apparent change in attitude by some members opposite.

The number of members opposite who have long associations with unions is quite clear. I certainly do not in any way denigrate that association because the unions are an absolutely vital part of any industrial society, but we should all make sure we retain our memory of our roots and who we represent and, as the Deputy Premier said when he was the member for Hartley in 1995, 'Stand up and be counted' or words to that effect.

The member for Mitchell in his contribution back in 2007 discussed how Workers' Compensation had become a bit of a lottery because of the inexperience and the chaotic delays in the current system. When this bill was introduced, the member for Mitchell had quite a bit to say on it, and I am sure he will have quite a bit more to say on it. From the Liberal Party's point of view, yesterday I received a notification of intent by the member for Mitchell to have amendments drafted and, at my count, there are 37 of them. I am not holding the member for Mitchell to that—we have not seen his amendments yet—but it will be interesting to see the government's attitude towards them.

Talking about amendments, it was a delight in some small way—and we always have a positive attitude on this side towards everything in life—because when you see the possibility for a small increment of improvement in this bill, then you grab it. This morning the Hon. Michael Wright, the Minister for Industrial Relations, issued a press release asserting 'Government to further strengthen WorkCover laws'. I am not so sure about the title—we will leave that up to the spin doctors—but here are 13 government amendments to this bill that the Deputy Premier said this morning is a good piece of legislation. He was almost imploring us to bring in amendments but, as we have said, this is their mess and their legislation; they have to fix it. I can see here from the raft of amendments that they are bringing in that they are going a small way to try to fix the obvious flaws in this legislation; otherwise, if there were no obvious flaws, why would they be introducing these amendments?

I was informed by the minister, a very polite minister who keeps me well informed on what is happening in most cases, that these amendments are being drafted and they will be filed so that the opposition will be able to look at these amendments and consider them on their merits when we discuss them in committee. The good thing I can say about the press release that lists some of these amendments is that I can see some good ones, namely retaining the 7.5 per cent levy cap instead of the proposed 15 per cent, the removal of the psychiatric disability benefit, although I understand that nobody had actually asked for that to be included in the first place.

I am on the record as having said that I did not think that these severe cuts to workers' entitlements were necessary, and I am still of that belief, so another one that was of interest to me was that I have managed to get 10 per cent at least for the workers for another few weeks. Instead of having 100 per cent for 13 weeks, then going down to 80 per cent, they are still being cut to 90 per cent. I think it is still an unsatisfactory outcome for workers in South Australia, but that is the government's call. There has been a bit of movement there. The 80 per cent step down will come after only 26 weeks now. The small movement there shows a little bit of heart, although we are not quite Phar Lap but at least we are on track to see some changes that might end up with something approaching a fair and reasonable outcome.

I will not go through the other amendments now; we will wait until they are filed and we can discuss them then, but certainly streamlining the Workers Compensation Tribunal by removing the arbitration process is another move that had been suggested in a number of the submissions that I had received.

Let's move on to the position the Liberal Party has been presented with in the submissions to this legislation. These amendments do not make a huge difference to the submissions we have received and they do not change our position of making sure that this government bill—this 'good legislation', as the Deputy Premier said—goes through.

On 25 March this year The Australian carried an article entitled 'Union threat over injured workers'. Perhaps that union threat has worked to a small degree with these amendments coming in today. Andrew Faulkner's article states:

Unions will today demand that the Rann Government restore the right of injured workers to sue employers in South Australia as a showdown looms over an attempt to water down compensation entitlements. Hanging over the Government's head is a union threat to convene a special ALP state conference to overturn the legislation if the Government refuses to give ground.

Well, a little bit of ground has been given, and these amendments are just a small movement in that ground—certainly not earth-shattering, but a little bit of movement.

The unions really are very cross about this. I have spoken to a number of senior union officials over the past few days about this, and their anger has not in any way gone down. One chap really has stuck out. I have not spoken to him, but I have been given a copy of an email that is attributed to Mr Les Birch, a workers compensation advocate employed for the past 14 years by the Construction, Forestry and Mining and Energy Union (CFMEU). He is in the Forestry and Furnishing Products Division. Les has been actively involved in workers compensation since 1979, and from April 1987 to June 1994 he was a WorkCover board member. Mr Birch is reported to have said the following in an email given to me:

When Michael Wright was the Opposition spokesperson for Industrial Relations and Workers Compensation prior to the election of the Australian Labor Party...to government in 2002 he was provided with an enormous amount of information from people inside the Trade Union movement and within the WorkCover Corporation that clearly showed the scheme was on a downward slide as a consequence of political decisions that had been taken by the Liberal State Government and the leadership of the Corporation.

I do have some problems with the first paragraph. The rest of it, as you will see as we go through, is probably pretty much on the money. I will refer to page 77 of the Clayton Walsh report just to rebut that actual claim by Mr Birch that it was not that the WorkCover corporation was not on a downward slide. The email continues:

In 2000 and 2001 the WorkCover board and the CEO of the WorkCover Corporation decided not only to reduce the levy rate but also provide a rebate to employers throughout South Australia.

And you can understand why when you see what the figures were at the time. It continues:

In 2000 and 2001 Michael Wright attended at least three meetings at the United Trades and Labor Council's office on South Terrace, Adelaide...On one occasion the Opposition Leader, Mike Rann, accompanied Michael Wright. On each occasion Michael Wright gave an absolute assurance that on the election of the ALP to government, the Workers Rehabilitation and Compensation Act would be improved to benefit injured workers.

On one occasion Michael Wright stated that should the ALP be elected in 2002 he would have a review conducted of the workers compensation scheme within six weeks after being elected and the findings would be introduced through legislative change. The Trade Union representatives involved in workers compensation at the time felt that the time frame was ambitious but the commitment was welcomed.

On being elected, Minister Wright established the Stanley Review and the findings were handed down in mid-2002. However, it was not until 20 December 2002 that Minister Wright officially released the findings. They have gathered dust ever since.

Minister Wright is to be condemned for his failure to honour his commitment to the Trade Union movement and his lack of responsibility in addressing the leadership and management problems within the WorkCover Corporation.

Approximately 18 months ago the Treasurer, Kevin Foley (supported by representatives of the business sector) stated that there was a problem within WorkCover and that it would be fixed. Treasurer Foley and the chairperson of the WorkCover Board, Bruce Carter, decided that the Board would put recommendations to the government to change the WorkCover legislation.

The recommendations that were put forward were extremely draconian. However, Bruce Carter and the majority of the WorkCover Board were so confident that the recommendations that they had put to the government would be introduced that the WorkCover management would establish a Unit within the WorkCover Corporation specifically to assist the government in drafting the necessary legislative changes.

In mid-2007 I and another Union official were invited to Minister Wright's office to discuss our concerns that the Corporation was outsourcing their responsibilities under section 58B and 58C of the Act to Employers Mutual which is like putting Dracula in charge of the blood bank. The Minister stated that he shared our concerns but was powerless to do anything about it as it was a WorkCover board decision.

During our discussion I raised with Minister Wright the Trade Union movement's concerns that the Corporation was working on amendments to the legislation that were draconian. He gave his undertaking that while he was the minister responsible for workers compensation in South Australia he would not introduce legislation that was detrimental to injured workers.

History has now shown that Minister Wright has reneged on that undertaking, just as he reneged on his promise in relation to the Stanley review in 2002.

Minister Wright however is not the primary architect behind the proposed legislation that will have dramatic adverse effects on injured workers in this state and undermines the conditions and protection for workers that Unions have fought for. Treasurer Kevin Foley has played the leading role in promoting the proposed changes to the legislation and is working hand-in-hand with the business community to ensure their passage through parliament.

In the email, Mr Birch goes on to say:

This is the man that masquerades as a Laborite but in reality is more conservative than his counterparts in the Liberal Party. This is the man who got it wrong in the Nicole Cornes saga, the Port Adelaide bridges and the Victoria Park corporate grandstand and considers South Australians as whingers. His philosophy is more directed at looking after and protecting the business interest of his corporate mates in the business sector than the average working person in this State.

Foley's cohort, Pat Conlon—purported to be the leader of the left wing of the Labor Party—is another that deserves to be condemned for his involvement in this sorry saga. This fellow espoused working-class socialist left principles for years before he got into parliament. Once elected, however, his ideology changed. If he had voiced his opposition to the proposed legislative changes and used his influence with Rann & Foley, injured workers would not be confronted with the harsh and unjust legislation that is currently up for debate in the parliament.

Rann, Foley and Conlon claim that even with the proposed legislative changes, the South Australian workers' compensation scheme will still be the best in Australia. The reality is that, if it is passed by parliament, the proposed legislation will be extremely detrimental to injured workers and their families, and only the business sector will benefit.

This contribution by a representative of the CFMEU is quite an indictment. The bottom line is that the job of the opposition in this place is to ensure that any legislation put through here is consulted on and is workable legislation. However, as we have already said a number of times, this measure is an absolute mess.

I will continue to look at the evidence. The government may complain that it wants an oration from the shadow minister, but I am presenting and relaying to the house, and to those who want to read Hansard, the evidence that has been put before me about the condition of workers compensation in South Australia and about the judgments that have been made about the scheme. I am also relaying the submissions that have been put to us, as elected members of parliament, to have this legislation improved.

So, I make no apology for the extensive notes, reports and submissions I refer to; I make no apology for that whatsoever. If members opposite do not want to listen, they are welcome to leave the chamber, but I will continue to put on record the true facts and history of workers compensation in South Australia and the fact that the legislation being introduced into this place, which will be discussed at length, will be shown to be flawed. If you want evidence that what has been talked about, built up and introduced as good legislation by those in government is not good legislation, look at the 13 amendments the government introduced today.

I turn now to the Clayton Walsh report, which is the bible for this legislation. At a community forum held at Regency Park a few weeks ago, Alan Clayton addressed about 100 people, some of whom were injured workers. I remember his words very distinctly: 'This is my report, but this is not my legislation.' Let us consider the report and some of the things in it. It is worth looking at the introduction in the executive summary on pages 1 and 2. I will not read it all, but we should ensure that some parts are on the record. The introduction commences:

There is one issue concerning the current South Australian workers' compensation system upon which there is widespread agreement. That is the judgment that the scheme is failing to fulfil a number of the objectives of the Workers Compensation and Rehabilitation Act 1986 as enumerated in section 2 of that Act. In particular, and most relevant to this Review, there is the failure of the scheme created by the WRCA to provide 'for the effective rehabilitation of disabled workers and their early return to work' (section 2(a)(ii).

The consequences of this is that the scheme has been deficient in reducing the 'overall social and economic cost to the community of employment-related disabilities' (section 2(a)(iv)) and in ensuring 'that employers' costs are contained within reasonable limits so that the impact of employment-related disabilities on South Australian business is minimised' (section 2(a)(v))...In terms of structure, the South Australian system is a publicly underwritten scheme, with outsourced claims management (to a monopoly provider). It is predominantly a periodic benefit scheme for income support. On this basis, the most comparable schemes to that of South Australia would seem to be those of New South Wales and Victoria; while there are significant differences between these three schemes...

The big difference at present between the three schemes is the premiums being paid. At page 3 of the Clayton Walsh report, it shows that the New South Wales average premium in 2007-08 was 1.86 per cent; I understand that has gone down to 1.77 per cent. In Victoria the average premium is 1.46 per cent, Queensland is 1.15 per cent, and South Australia is sitting on 3 per cent.

There is a significant difference between them. If the government's aims are fulfilled, what we are expecting to see is a reduction of 0.25 per cent, so we still will be at 2.75 per cent. There are some optimistic claims that the levies may go down to 2 per cent but we should remember that in 2006 when the press release was issued, there was a new board, a new CEO and a new claims agent. The whole unfunded liability was going to disappear and we were going to ensure that the whole system was working well.

We need to look at the recurring theme of claims management in the Clayton Walsh report. We know that Employers Mutual was taken on as the single claims agent after four claims agents were used in the past. I do not know the full history of EML in New South Wales. It is supposed to have extensive experience in the management of workers compensation issues. As a result of anecdotal evidence I am hearing in South Australia and the continuing blow-out in the unfunded liability, its results do not match the expectations. At page 5 the Clayton Walsh report talks about claims management. It states:

The schemes of South Australia, New South Wales and Victoria all outsource their functions of claim management to 'claims agents'—in the case of New South Wales and Victoria (and until recently South Australia) there are multiple agents. As from 1 July 2006 (and earlier in relation to one former claims agent), South Australia has a monopoly claims agent, Employers Mutual (EML). The South Australian system of claim agent remuneration is structurally similar to those of NSW and Victoria.

However the main differences expose the scheme to not achieve improvements in very important areas. In particular, the main components of Performance Fee and Outcome Fee are available for improvement in claims more than one year in duration. In theory a rational approach to claims management would be to focus on short term claims management in order to achieve longer term outcomes—and so this issue would 'take care of itself'. From the perspective of the review, it may have been more effective to place greater direct performance measures on short term claim outcomes such as return to work...Finally, in both New South Wales and Victoria the major successes of the schemes in recent years have stemmed from active agent management by the central authority.

I assume that is the equivalent of our WorkCover authority. It continues:

While the contract between the WorkCover Corporation and Employers Mutual does appear to have powerful rights of intervention, including step-in rights, it remains to be seen how these arrangements will be given operational form in the future.

Once this legislation is through, what will we see? It will be interesting to see what the minister has to say about that. Let us see what Mr Walsh has in his report about the history of WorkCover in South Australia. Mr Birch from the CFMEU said that it was going downhill in the 1990s. In his own words, at the bottom of page 8 of the Clayton Walsh report under the heading 'The scheme in historical perspective. The South Australian Experience', Mr Walsh states:

The WorkCover scheme was reasonably stable during the late 1990s, with the availability of redemptions, and their strategic implementation, successfully extinguishing significant amounts of tail liability.

That will all change. The report continues:

At the same time reported claim numbers continued to reduce, especially after the increase of employer liability for short term income maintenance. During the same period claim payments were very well controlled, reducing in real terms throughout the five year period. The average levy rate stayed at 2.86 per cent of wages during this period, allowing a gradual erosion of the deficit such that the scheme achieved a high-point funding ratio of 97 per cent as at 30 June 2000, representing a deficit of $22 million.

That is a long way from the $1 billion we see today. A 97 per cent funding ratio is a long way from the 67 or 65 per cent we see today. It will be interesting to see what the liability and the funding ratio will be in the next few days. The report continues:

The scheme began the 2000s in an apparently healthy position with respect to both financial stability and reputation for forward thinking as represented at various seminars and conferences.

At page 78 of the review, Mr Walsh states:

The 2000-2001 financial year led to investment losses for all schemes with exposure to growth assets...

We are seeing that now. We heard the Treasurer today talk about losses for some of the investments of state finances. We also heard that the superannuation funds have had their worst returns for 20 years. A similar sort of thing happened in a smaller way in 2000-01. I repeat:

The 2000-2001 financial year led to investment losses for all schemes with exposure to growth assets in virtually all of Australia's accident compensation schemes. Nevertheless, as at 30 June 2001, South Australia still led the relative funding positions of all three schemes:

New South Wales: unfunded liability about $3 billion, funding ratio 65 per cent;

Victoria: unfunded liability nearly $1 billion, funding ratio 87 per cent;

South Australia: [this is 2000-01] unfunded liability $56 million, funding ratio 93 per cent.

Would we not love to have 93 per cent now? It is really one of those things that, properly managed, we probably could have. If we are to believe WorkCover and the board's predictions with EML, we would be well and truly on our way to having a fully-funded scheme by 2012. At page 12 Mr Clayton continues talking about the management of the scheme and states:

As with the Victorian scheme, the New South Wales turnaround has not been the result of a sudden reduction in weekly benefit entitlements.

So, it is not about slashing workers' entitlements. The report continues:

Rather it has been led by a fundamental cultural change amongst all scheme stakeholders including a more proactive management role for WorkCover, facilitated by a major reduction in the availability of lump sum compensation and associated disputes.

So, it is management of redemptions not elimination of redemptions. The bottom line is that there is no way you can rewrite history and say that the WorkCover scheme this government inherited was in a poor state. It was not. At page 78, the Clayton Walsh report states that in the 2000-01 financial year South Australia's unfunded liability was $56 million with a funding ratio of 93 per cent.


[Sitting suspended from 18:00 to 19:30]


Dr McFETRIDGE: I continue my contribution to this bill highlighting what Clayton said in his report. I remind the house that, at the public forum, Alan Clayton said that this was his report but not his legislation. So far, we have looked at the premiums that have been paid, the claims management, the history and the fact that South Australia was in good shape—and I will talk more about that in relation to the SARC review. Let us look at the step-downs that were talked about by Alan Clayton. Certainly it is good to see that the government has looked at the step-downs and put forward some proposed changes.

I understand from reading the Adelaide Now website that Mr Wright said that the government's changes were final and made as a result of negotiations following the introduction of the bill. The website also states:

Unions SA secretary Janet Giles said the move would not end union action against the bill...This is obviously an attempt to stop the campaign rather than any real attempt to address the issues that were raised. If Mr Wright thinks this will satisfy unions or injured workers then he has another think coming.

We will see what will happen on that front. I certainly encourage the unions to keep the pressure on the government because, as will become clear when I talk about the step-downs, South Australia does have a good system now.

In my speech this morning, I talked about the fact that, when the former Liberal government cut back payments to workers, it was nothing like what is proposed now, yet we were heavily criticised by both the Premier and Deputy Premier in their roles in opposition in 1995. The Adelaide Now website further states:

WorkCover chief executive officer Julia Davison said: 'Some of today's amendments...may have some impact on the delivery of expected outcomes.'

A number of weeks ago on FIVEaa, minister Wright said that the step-downs were going to save about $20 million. Why would you have this sort of argument for $20 million on the broken backs of workers, as Mike Rann said in his press release in 1995?

Let us look at what the step-downs really mean to this scheme. It is interesting to see that South Australian workers are being expected to go to work every day and, if they get injured, they are then expected to exist on partial payments in a very short time, even with the change from the 80 per cent to 90 per cent at 13 weeks, which, I understand, is being proposed by the government. The current benefits for South Australian workers are 100 per cent for the first 52 weeks, then a step down to 80 per cent after that. My understanding is the vast majority of workers are well and truly back at work in that first 52 weeks. In fact, they are back at work within the first 13 weeks.

However, because of the pressures on the medical system in South Australia, not all workers have seen their specialists and many workers are still undertaking rehabilitation or medical treatment in that first 26 weeks. Compare South Australia's scheme with the ComCare scheme where 100 per cent is paid to 45 weeks. Compare the New South Wales scheme where 100 per cent is paid to 26 weeks—and overtime is not excluded. We then have both WorkCover and the Clayton review saying that South Australia should be in line with the Victorian scheme which has been cut to 95 per cent at zero to 13 weeks and 75 per cent at 14 to 26 weeks.

Okay, the government is being a tiny bit more generous: it was going to stick at 100 per cent for 13 weeks and 80 per cent after that. In Victoria, where it has been cut to 95 per cent at zero to 13 weeks and then to 75 per cent at 14 to 26 weeks, I am told that the unions and employer groups have come to an agreement and there are top ups for injured workers. So, they are basically getting 100 per cent whilst they are injured; they are still getting some payments from their employer.

That is what I am told; if I am wrong, I would be interested to see what the actual situation is. I have been told by senior union officials that the Victorian scheme is not quite what it appears at face value (that is, 95 per cent for 13 weeks, and then 75 per cent for the 14 to 26 weeks); it is better than that. The South Australian scheme is generous, but generosity does not equate to overpayment. South Australian workers deserve the best. We have record low unemployment figures in South Australia and a booming economy. Why can we not afford this?

I want to make one quick comparison to the self-insured scheme here. Over 40 per cent of workers in South Australia are under the self-insured scheme, which is able to manage its workers with the same legislation and with the same range of cases without having to go into the unfunded liability blow-outs we are seeing with the WorkCover scheme. There is really quite a contrast between the two halves—and it is almost two halves: 60 per cent are under the WorkCover scheme and the other 40 per cent are under the self-insured scheme. So, it is not inconceivable that a better managed scheme could produce much better results.

In relation to the step-downs that are talked about in the Clayton review, under the review's recommended approaches at page 13, Mr Clayton says:

The issue of the incentive effects of benefit levels on claims duration is complex. Most workers return to work as soon as their injuries have been healed, regardless of any issue of economic incentive articulated through the benefits system. The approach adopted by this review is similar to that advanced by the Royal Commission on Workers' Compensation in British Columbia in 1995, namely—

and I assume that this is quoting from the report—

'The commission recognizes that not all workers require the return-to-work incentive created by a replacement rate of less than 100% of net average earnings. At the same time, the studies noted earlier cannot be totally ignored, although they should be interpreted cautiously. In light of these factors, the commission concludes that if a replacement rate adjusted downward to reflect the need for return-to-work incentives is to be adopted, it should be a modest one.'

Mr Clayton continues:

The empirical record, exemplified in reviews such as the Michigan Disability Study, emphatically demonstrate that the strongest correlate to early and durable return-to-work outcomes is a positive and sustaining workplace culture.

There are number of principles involved here, the first of which is the equity principle, that is, trying to restore the losses brought about by a compensatable injury or illness. The Clayton report, at the bottom of page 13, continues:

...the review recommends that weekly payments of compensation should be paid at the rate of the worker's pre-injury weekly earnings..for a period of 13 weeks from the commencement of the claim.

To me, that is an unusual thing to conclude, particularly after it has been said that it is a complex issue. As I have already said, Clayton has also said that it is not the incentive that is often put up as a way of getting workers back to work.

The other schemes in New South Wales and Victoria, particularly the ComCare scheme, where 100 per cent is paid for much longer than the proposed time here (the 13 per cent and then stepping down to 90 per cent now) is something we really need to reconsider. When you consider the relatively small savings to the scheme offered by this, I think what Janet Giles has been quoted as saying on the Adelaide Now website tonight might be the case, that is, that the move would not end union action against the bill. So, I will be interested to see what they actually do and what response the government gets. The need to recognise the fact that step-downs are an accepted part of any workers compensation scheme is something that I think is still open for discussion.

Let us now have a look at the average weekly earnings in South Australia. The lowest level of unemployment on record in South Australia is something that we need to be aware of when we are looking at capping average weekly earnings, particularly now with the mining boom and with the defence contracts being pushed by this government. It is an interesting position to be in.

We have an economy that is absolutely booming and we have a mining boom. When I was up at Prominent Hill last week I was told about the extremely high wages being paid there. I was told about one young girl who has taken a gap year off after year 12. She is on the stop and go, the lollipop, receiving a fantastic wage of $40 an hour just for doing that. There are huge wages going to be paid in this state.

Let us look at the wages being paid in this state in 2007. The average weekly earnings as of May 2007 in the mining area were $1,761 and in manufacturing, $1,016. I am more than happy to keep reading in all of these figures if government members wish. Let us see what Alan Clayton has to say in his report. He notes on page 105 that 'the coming mining boom in South Australia and developments elsewhere in South Australian industry such as those related to the defence industry contracts', will ensure that there is a need to be aware of the impost on an inappropriate cap on weekly payments.

Members interjecting:

Dr McFETRIDGE: If government members want me to continue to read every bit of evidence that has been given to the opposition, I am more than happy to do so. However, I suggest that they do not interrupt. I am sorry that they did not consult more thoroughly on this bill before it was introduced in this place and that I am having to do their work for them. I am having to present the facts that have been presented to the Liberal party and the facts that have been presented in the Clayton report, which apparently have been overlooked by the government. But I will continue on because my job in this place is to make sure that we present the evidence in a balanced form for all people to be able to look at.

It is interesting that the government appears not to want to listen to what is being put up by various employer groups and by Mr Clayton himself. I am sure that it has not read the details, otherwise we would not have this piece of legislation now before us. In fact, it is legislation that now contains 13 amendments, and perhaps they are only the first of the amendments.

The next area where there is some concern—and I will read some of the submissions from various employer groups—is medical panels, about which some legal groups have serious concerns. We had medical panels in the earlier legislation which were taken out. I do not completely understand the reason for that, but certainly the recommendation by Clayton is that medical panels be reintroduced. As he points out in his report:

A significant proportion of disputes in the South Australian workers compensation scheme involve medical questions and such disputes can often become protracted with significant delays.

So, the review supports the establishment of medical panels as a means of focusing decision-making on medical issues at a more evidence-based level and limiting the negative impact, in both social and economic terms, of a plethora of unproductive medical reports. The need to make sure that these medical panels are not put in an untenable position where they are deciding on points of law is really something of which the government must be aware, and I want to hear what the government's response to these questions is, because they are being raised not only by me but by a number of groups.

The submission, which I will continue to read into this debate, will highlight this. As I have said, I am more than happy to continue to read all of these issues into the record, because obviously the government has not listened to the numbers of groups out there; they were not consulted with.

We have been presented with this piece of legislation, which is already being amended by the government. We heard the Treasurer in here this morning almost pleading with us to amend his own legislation. The pleasing thing that I have seen in the amendments proposed by the government—because it certainly was a concern for me and it was a concern for many of the employer groups that we approached—concerned the doubling of the cap on the levies.

Under the current scheme, South Australian employers are paying some of the highest levies in Australia, at an average of 3 per cent—much higher than the 1.77 per cent in New South Wales and way above the 1.46 per cent (I think it is) in Victoria. I will stand corrected on that if it is wrong. The bottom line is that South Australian employers have been paying the highest levies. Under the former Liberal government, it got down to 2.46 per cent, I think, at one stage. It is not good enough. If we want to be competitive, we really need to be thinking about getting it down around the 2 per cent or high 1 per cent mark.

The mere fact that the government was going to double the cap on the levy was an alarming decision to make. I am glad the government has gone back on that, because you have to remember that, when you pay the levy, it is calculated on the industry averages and there is a 50 per cent penalty payable on that. You can be paying over 11 per cent already on your levy but, under what was proposed (and fortunately has been pulled back), it was to go up to a 15 per cent cap; then if you add a 50 per cent levy on top of that, you could have been paying 22 per cent. I am very pleased to see that the government has changed that.

I was quite alarmed, though, during discussion with a number of the stakeholders, that some of them were actually prepared to wear that as a means of just getting this legislation through, and they were prepared to then pass on this cost to their customers. Not every industry could do that, but there were some industries we spoke to that were prepared to wear that and they were going to pass it on to their customers. That now is a moot point, but it is still the case that some employers can be paying 11.5 per cent under this scheme—a no-fault compensation scheme. There are still some issues that need to be worked out to ensure that a significant number of employers are not paying that top end levy, because they are.

Certainly, I know that when I look at the range of levies that are paid under the WorkCover regulations—and I cannot seem to find them just at the moment—shipbuilding, for example, has a 7.5 per cent levy, whereas submarine construction has about a 2.5 per cent levy. I do not know what is going on there; obviously the people who build submarines have a very effective way of making sure that their workplaces are extremely safe.

Let us just hope that when the air warfare destroyers are being built the companies involved are not being hit with a straight up 7.5 per cent levy. Let us hope that SafeWork SA, the government and the WorkCover Corporation get together and ensure that the levies will be reduced down to as low a premium as possible. It is really good to see the government actually has listened in that case, but I certainly was very concerned that some of the employer groups, in their desperation to see some change come through in WorkCover, were going to actually cope with the doubling of that cap. I have not yet seen the amendment from the government, but it will certainly be very interesting to look at.

Alan Clayton talks about the future for the scheme and what is to be done, and he talks about the building blocks for the new scheme. One of the things he does emphasise there is the poor return to work rate, and that has been recognised as a continuing factor—particularly the long-term poor return to work rate—in contributing towards the unfunded liability, particularly the tail end of that.

I have just been handed the amendments proposed for the legislation, and I will certainly have a look at those later this evening and will come back to the government on those. It is good to see that at least now it is doing something about recognising that there are issues out there rather than just bringing a piece of legislation into this place without any announcement and without any discussion with the various stakeholders.

We need to make sure that we do not ignore the Clayton review. The government has adopted some of it. In his summation, Mr Clayton said that, unless this is adopted in its entirety, it may not work. I think that the funding projections that he talks about in the back of the report certainly offer some hope for the future, but we should really read the results on page 203, as follows:

The review terms of reference require reduction in liability of $250 million and inscheme underlying costs of .75 per cent to extinguish the unfunded liability in around five to six years.

We were promised that in 2006 by the current WorkCover Board with its new case managers, but that does not seem to have happened. So, let us hope that, if Alan Clayton's predictions are right, we will get that. It continues:

The review terms of reference require a reduction in liability of $250 million while at the same time allowing a reduction and an average levy rate to 2.75 per cent from 1 July 2009 and 2.5 per cent from 1 July 2010.

So, we are still way ahead compared to the interstate schemes. New South Wales has just dropped down to 1.77 per cent, and I understand that it is actually increasing benefits to workers. The important thing that Mr Clayton says in summing up this part is as follows:

It expects the review recommendations to satisfy the review terms of reference provided initiatives are undertaken and applied as recommended, that is allowing a reduction in levy rates to the range 2.25 per cent to 2.75 per cent from 1 July 2009…Should the initiatives be more successful than PWC projected, the unfunded liability will be extinguished sooner, and/or the levy rates can be reduced more quickly.

He finishes off by saying:

Of course the opposite situation could also emerge.

Mr Clayton has put up a very good report. I was there when he spoke to the committee forum at Enfield, and I will again remind the house that this is Mr Clayton's review, but this legislation is not his legislation.

It is interesting to note the SARC report of 2005, and I will just read some of the funding history from this report. These figures are a little bit older now, but I just want to get on the record what was actually happening. In 1995, the funding ratio was 70.7 per cent with an unfunded liability of $250 million. In 1996, that had improved slightly, with the funding ratio at 75.1 per cent with an unfunded liability of $207 million. In 1998, the funding ratio was 89.2 per cent with an unfunded liability of $78.9 million. In 1999, the unfunded liability was $29 million and the funding ratio was 96.9 per cent. The best figure was in 2000 when the unfunded liability was $22.3 million with a funding ratio of 97.3 per cent. That is a terrific figure.

There was a slight dip in 2001 but, as I have said before, there were some changes in the investment market, but the funding ratio was still 91 per cent with an unfunded liability of $55 million—a long way from the billion-dollar figure we are about to see in this place. In March 2002, the funding ratio was 90.1 per cent, in June it was 79.7 per cent and, in December, it was 67.2 per cent.

In March 2003 it was 64.4 per cent; in April, 65 per cent; in June, 55 per cent; in December, 58.9 per cent; and the latest figure in the SARC report is that in June 2004 the unfunded liability was $572 million (over half a billion) with an outstanding claims liability of $1.444 million and a funding ratio of 60.4 per cent. At the moment, I understand that the funding ratio is about 65 per cent and the unfunded liability is about $1 billion. The need to get this system fixed is imperative—it is not hard to see that—so, we need to make sure that whatever is going to be put up by the government will find the solution.

To find the solution, not only have we looked at the legislation and read the reports, but also we have gone out and spoken to a lot of people about what is proposed by the government. Certainly, there has been a lot of pressure on us on this side to make sure that we do not get in the way of this legislation. Let me tell you that we will not get in the way of this legislation because this is the government's answer to fixing up the government's mess.

I do not understand why Business SA and other associated groups—namely, the Engineering Employers Association, the Australian Housing Association, the Master Builders Association, the MTA, the Property Council, SACOME and the Aged Care Association of South Australia—spent $20,000 on a series of advertisements. I think it was about $100,000 in total that they spent on these advertisements. The advert states: 'Pass the workers compensation bill NOW'. They want this legislation through; they do not want any delay. The text of the advert states:

South Australia currently has the worst performing and most expensive workers compensation scheme in the nation. This underperforming scheme not only makes our state uncompetitive but, importantly, it has a detrimental impact on the whole of the South Australian community. The Rann government has recently introduced legislative changes into the state parliament, which will deliver to our workers a state compensation scheme that provides support for injured workers, a streamlined administration and the safest, earliest possible return to work by injured workers.

If that was the case, I do not think you would need to be having these adverts. The advert continues:

Whilst supportive overall of the package, South Australia's industry associations, representing thousands of businesses, employing hundreds of thousands of workers, acknowledge that elements of it will impose additional burdens on business.

Some of those burdens actually have been relieved today because some of the 13 amendments that have been introduced will certainly make a small change for business. At the bottom, the advert states:

What we need now is for the government's proposals to be implemented without delay and that means getting the House of Assembly and the Legislative Council to pass the bill as a matter of urgency.

That is understandable because there is an urgent need to tidy up the WorkCover legislation and make sure that the scheme is working, that the cases are being managed well and that the board and the minister are in control. So, to do that, WorkCover was good enough to suggest to the government back in January 2007, through 'Workers compensation: a program for reform in South Australia', a raft of suggestions that were not taken up by the government in this legislation.

But it was a surprise to me to have land in my pigeonhole in this place yesterday 13 amendments that have been proposed by Business SA to insert in this legislation. Some of these amendments reflect a lot of the amendments that are proposed by a number of employer groups. It mentions here that the scheme's critical changes in relation to WorkCover's rehabilitation procedure must not be amended. It talks about the step-downs, medical panels, the removal of income maintenance payments during the period of dispute, and the removal of redemptions.

Not all of Business SA's members agree with that, because the self-insurers do not agree with that. They are a group to be reckoned with. They are able to produce figures which show that their average levies are around 1.6 per cent. I do not have the Local Government Association's final position on this, but I understand that they did not support the step-downs. I think they worked with the Australian Services Union and another union and they are more than happy with the way they work.

The Local Government Association is a self-insurer, insuring over 8,000 workers. It is able to manage a workers compensation scheme that is actually paying redemptions and also paying bonuses back to local government bodies around South Australia. It is able to manage it well. I am not sure whether the Local Government Association is a member of Business SA, but certainly I know it is a self-insurer. I have been told that some of the LGA's people are members of Business SA but they do not agree with all of what Business SA is saying. It is interesting, though, that Business SA waited as long as it did to give us its particular group of amendments. However, as I said, there is a raft of them: 13 that should be made; some that must be made; and some that should be considered.

The government will have seen the amendments and I look forward to hearing the minister's response to them, that is, why he will not adopt them or, if the government is to adopt them, why it will adopt them at this stage of the bill. There is a need to recognise the fact that groups like Business SA do have some concerns with the bill and that is something the opposition is very concerned about and that is why we spoke with them. I can tell the house that Business SA gave this legislation 6½ out of 10—that is all. However, it was prepared to put out adverts saying, 'Pass this legislation now.'

It is important to recognise that there are people out there who have concerns with this bill, and that is why I will be reading to the house tonight a number of submissions, to make sure that the government is at least aware of and cannot ignore the fact that people have concerns and that these concerns need to be at least noted, even if the government is not going to act on them. The fact is that the government has not spoken to these people (or certainly there is no recognition of it), and the people I have spoken to certainly do not have much regard for the government's level of consultation on this, and that is an indictment of the bad management of this whole scheme.

The WorkCover Board issued its report in November 2006 and made a number of recommendations. There was a supplementary report in June 2007. The board's recommendations were considered by Clayton and, in his report, he compares and contrasts some of the things that he was talking about. The WorkCover Board recommended the doubling of the cap to 15 per cent. It talked about far more onerous step-downs, raising the step-down to 95 per cent from day one, and then a further step-down in weekly payments to 75 per cent at week 13, and capping the average weekly earnings at $1,190. That was to be indexed but it is certainly not double the average wage. In many people's opinion, some of the things being proposed by the WorkCover Board were punitive.

The WorkCover Board knew exactly how the system had been working or, should I say, had not been working, so I am not surprised that the changes it proposed were seen as punitive, in some people's eyes, as they seemed to be at first reading. The need to ensure that the recommendations and concerns of all groups covered by workers compensation in this state are heard is vital, and that is why I will tonight continue to read out some of the concerns and submissions I have received. I will read out some of the advice verbatim, because it is from people for whom I have a lot of respect; they are workers compensation lawyers with a lot of experience, and for me to portray their opinions and their evidence in only a partial fashion would not be a fair representation.

So, members of the government can sit there and complain, but I will continue to read this material here because it is very important to put on the record a full, fair and frank representation of the current state of workers compensation in South Australia, and the concerns held by employer groups and other groups out there about the way it is heading.

The WorkCover Board sent a letter to the industrial relations portfolio committee of the Liberal opposition, and I will read some of that letter into Hansard. It was from Mr Bruce Carter, the chair of the board, who said:

The board believes that the reforms will deliver a fair and balanced scheme for injured workers and will provide the tools necessary to improve the state's return-to-work rates, which should in turn result in a more affordable and sustainable scheme.

He went on to say:

The WorkCover Board is encouraged by the commentary in the Clayton-Walsh review that the implementation of the recommendations will deliver a fair and balanced scheme for injured workers...The board is also encouraged by the PricewaterhouseCoopers funding projections which, if realised, would achieve the review's terms of reference and achieve ongoing cost savings, reductions in claim liabilities and full funding in five to six years. The board is, however, aware that the Clayton-Walsh review findings do constitute a weakening of the original board proposal in some areas. The board would be concerned at any further erosion of the reform package that may undermine the expected benefits of the scheme.

Certainly, we read what Julia Davison said in the Adelaide Now website tonight. She is concerned that the benefits may not be there now; I think she may be wrong on that one, particularly if claims management and rehabilitation issues are taken up. The letter from Mr Carter of WorkCover continues:

Notwithstanding the general position of support the package, the board agree to make a further representation to the government on areas that have been included or omitted from the amendments bill which remain a significant concern to the board. In the interests of transparency I believe it is appropriate to also raise these matters with the…opposition…

That is why I am raising them here. I want to put on record the fact that even the WorkCover Board has had some concerns with this legislation. It has forwarded those on to us, and I assume they have also been forwarded on to government, so there is no need to read all those into the Hansard record tonight. However, it is interesting to see that the WorkCover Board itself does have some concerns about this legislation.

The other major group with whom I have had a number of discussions, and which has been very helpful in allowing me to get a grasp of the history and consequences of this legislation, is the self-insurers in South Australia. These people have bent over backwards to help me get a complete understanding of what they are all about, and how they are able to manage their scheme with a much greater efficiency than WorkCover has ever been able to.

The average levy self-insurers are now paying is about 1.6 per cent and, as I said before, some of those who are self-insuring (including self-insuring government departments, although they do not seem to be in as good a position as the private organisations) are able to manage the scheme so that they are getting workers back to work and are not having to grapple with unfunded liabilities. The percentage of their wages that they have to put aside as levies is about half that which the WorkCover Corporation is paying.

The other thing that the self-insurers have said to me is that they are not going to die in the ditch over redemptions going out but they are certainly very concerned about the fact that the use of redemptions will be greatly restricted. Many of them do use redemptions as an effective tool for managing some of their long-term injuries, or workers with injuries who, clearly, will not be able to return to work.

The self-insurers certainly do have a lot more flexibility than some under the workers compensation scheme in providing alternative employment within their own workplace. Sure; I admit that, but at the same time there needs to be recognition that the general management of the current legislation by self-insurers has been much better in the past, and I am sure they will continue to manage it in a much more efficient fashion than WorkCover will ever be able to. Why that is so I do not understand. In their preliminary comments the self-insurers state:

It is SISA's understanding that the weekly payment provisions that rely on work capacity reviews will not take effect until the medical panel arrangements on which they depend are in place and are operational. This is likely to be up to a year. In effect, this means that the 130 week reviews will not begin until around 1 July 2009, meaning that the scheme's tail will remain unaffected until after that date.

If the minister can answer that question it would be a significant piece of information for the house to have before it. I am more than happy to give the minister a copy of SISA's comments about this. I am sure that he already has them. The second comment that SISA makes is:

The limitations on redemption should not be made to affect self insurers. Redemptions have been used sparingly but effectively by self insurers.

I was talking to a self-insurer who manages over 8,000 employees in 700 sites around Australia. They acknowledge that their costs in South Australia are the highest of any state. They use redemptions as early as three months. They get in there very early and very quickly. I will read from one of their submissions to illustrate the fact that this group is able to manage its issues in a much more efficient way. SISA states:

We have some ongoing potential concerns about the section 58B changes. While we recognise the purpose of the changes we are still analysing them in terms of their interaction with the rest of the amended act and will provide further advice in due course.

SISA has six main issues which I will read into Hansard so that everybody can be made aware of what the Self Insurers Association—which is using the system very well at the moment—is concerned about. The fourth issue, as I understand it—and I have not read all the amendments yet, but as I read in the press release—of concern to the self-insurers has actually been eliminated, and that was the inclusion of psychiatric conditions in the amended section 43, which was opposed by virtually every interested party.

It is quite true that people were not able to fathom why this was included in the first place, because nobody really asked for it. Certainly, the government has recognised the fact that it is not required and will not add any considerable benefit to injured workers out there, and it has been withdrawn. Other concerns that the self-insurers have noted include:

The success or otherwise of the revised lump sum and new medical panel arrangements will be determined by the workability and robustness of the regulations that underpin them.

Of course, we will not know what the transition arrangements or regulations are until later on. The final point that the self-insurers make is:

The medical panels will only be as successful as the quality and objectivity of the experts that serve on them. The general shortage of GPs and many types of specialists along with a long history of tension between the scheme and some elements of the medical profession will make the fee levels being offered and the selection process absolutely crucial.

I hear that they will have to have fly-in, fly-out specialists and members of the panel come in there. It is an issue that I certainly will be watching, and the Self Insurers Association is very concerned about it. In terms of the association's particular comments about all the sections of the bill, I will not go through them clause by clause; I am sure the government has already seen them. The association disagrees strongly with section 42(2)(e), a new subsection limiting the ability of redeemed working payments and medicals. The self-insurers have an established history of the wise use of redemptions. They state:

It is a key element of our ability to settle claims quickly and efficiently. 36 per cent of the scheme is to be penalised because the other 64 per cent could not manage redemptions properly. These limitations could be imposed administratively, eg via ministerial direction, that does not affect the self-insurers. In any case, the provisions are likely to be bypassed by placitum (iii) and swamp the Workers Compensation Tribunal with applications.

This is one of its significant concerns. The entire bill is outlined in a 43-page document, which I will not read into Hansard tonight but which I assume the government has seen; if not, I am more than happy to give the minister a copy because it contains some significant concerns for self-insurers, who should be held up as examples of how the scheme can work well.

Another group we have heard a lot about (in fact, we have read a lot on the Adelaide Now website) is SA Unions. Janet Giles has been talking about the changes and, as I said before, she has stated that the move to introduce amendments by the government would not end action against the bill. She has also said, 'This is obviously an attempt to stop the campaign, rather than any real attempt to address the issues we have raised.' Let us look at some of those issues.

The first thing to note about SA Unions is that Janet Giles was on the board of WorkCover. Certainly, when the legislation was planned (in fact, I think that it was just after it had been introduced), it was stated in the news of 18 February that Janet Giles had quit the board to defend injured workers. You have to admire her for getting out there and putting her position as clearly as she has done, and I have certainly spoken to Janet Giles about some of their issues. They hope to continue to negotiate with the government, but whether or not that will be a factor I am not so sure.

I refer now to a report of the parliamentary research library, written by Dr Zoë Gill, entitled 'The Workers Compensation (Scheme Review) Amendment Bill 2008: A Summary of the Various Stakeholder Positions'. I recommend this report to all members of parliament; it should have been emailed to all members, and it is certainly a document worth reading. Page 9 outlines the position of SA Unions quite clearly but, for those who have not read it, I will read it now into Hansard, as follows:

SA Unions, and its affiliates, have been vocal critics of the Government’s Bill and of the framing of the review of WorkCover more generally. Their approach is summarised in their submission to the Review, Submission from SA Unions to the Review into the South Australian Workers Rehabilitation and Compensation Scheme, dated November 2007 and a further document on their website authored by Kevin Purse, Getting WorkCover Back On Track—a discussion paper, which is undated. Further, SA Unions Secretary Janet Giles was a signatory to the minority WorkCover Board submission.

SA Unions' submission to the review primarily argues that the poor performance of the WorkCover scheme is a result of poor claims management. It identifies the 1994 changes to the scheme which outsourced claims management to nine agents, changed the Board structure, and introduced redemptions into the system as the beginning of this poor performance.

I cannot agree with that, when you read what Alan Clayton has said. The scheme was in good shape, so why people keep rewriting history I do not know. However, the main aim of reading this into Hansard is to ensure that people are at least aware of this submission and can follow it up and read the detail.

SA Unions is trying to ensure that all South Australian workers are represented, and certainly its position on the changes to the Workers Rehabilitation and Compensation Scheme, along with other positions, is quite clearly laid out in this excellent document put together by Dr Zoë Gill of the parliamentary research library.

The other significant group that has come out and really been quite vocal about the changes to the legislation is an interesting group because they are actually one of the biggest groups of employees in this state and they are actually employed by the government. It is the government that is doing something about changing this legislation and it is the government that is the employer of these thousands and thousands of public servants who are going to be affected by this legislation. None of these workers go to work—whether they are in the government, or whether they are in private industry—expecting to get injured. Certainly there is the common complaint that is recognised throughout all these submissions that the workers are not being treated fairly when they do get injured.

This legislation does need to be improved, and certainly the Liberal Party will come back with a much better position on this, although we recognise the fact that something has to be done now. While this legislation may not offer all the answers, it does offer some and we will watch this position very carefully.

The Public Service Association's comments on the proposed changes to the WorkCover Act are really quite interesting to read and, because there are thousands and thousands of these workers out there, I will ensure we do read this one into Hansard; it is only two pages. It will not take me long to read it and we will ensure that the concerns of the Public Service Association are put on the record.

Before starting, I refer to a letter from Warren McCann, the Chief Executive of the Department of the Premier and Cabinet. I wrote to him as the shadow minister for industrial relations, asking him to give evidence to the opposition's Industrial Relations Portfolio Advisory Committee, and Mr McCann declined, but he did send me a letter in which he said:

I do not consider it appropriate that I should appear and therefore respectfully decline your kind invitation. Nonetheless, I would like to take this opportunity to draw your attention to the following information from the Department of Premier and Cabinet Annual Report 2006-07, outlined at page 14.

It states:

Most public sector agencies are self-insured Crown exempt employers under the Workers Rehabilitation and Compensation Act 1986 and as such, are liable for associated costs and ongoing liability for claims. Actuarial valuations of the provision for workers compensation liability for all Crown exempted employer agencies have been performed as at 30 June 2007.

A summary of the estimated outstanding liability estimates for the past three years is as follows: 30 June 2005, $338.7 million; 30 June 2006, $344.2 million; and 30 June 2007, $358.2 million. It was only recently that the chair of the Economic Development Board told the Press Club that the current liability was about $400 million. If you put that on top of the billion dollars that we expect to see tomorrow, it is a significant figure that the taxpayers of South Australia are going to be—

Mr Bignell interjecting:

Dr McFETRIDGE: The member for Mawson wants to know what the chair of the Economic Development Board said to me privately.

An honourable member interjecting:

Dr McFETRIDGE: I will respond to this interjection, which of course I know is out of order. Publicly he encouraged the Liberal Party to support this legislation, although when I spoke to him afterwards there were some issues, and that has been seen in Business SA and also in The Insider. I am not going to reveal everything that was said to me privately, because it is an interesting position that businesses have out there and certainly it was interesting to see that the major push is to get this legislation through. The point I am making at the moment is that the unfunded liability has been focused mainly on the WorkCover portion, but if you add in the liability that is there in relation to the self-insured Crown exempt employers, it is about $400 million, amounting to a liability of about a $1.4 billion that this state is faced with.

Sure, you have to do something about it, but if you are going to do it, let's make sure it is done properly, That is why it is very important tonight that I do ensure that the government is aware of all the submissions that have been put to us and the issues that have been raised. If they are aware of them already, I do not think reiterating the concerns is going to be a bad thing for the small amount of time it will take in this place to do that, compared with the final outcomes that could be achieved if the scheme is brought back under control. The Public Service Association comments on the proposed changes to the WorkCover Act are interesting and I will read them into Hansard and ask members to digest them and consider them. I hope some of its concerns will be reflected in some of the amendments put up by the government. I understand some of the Independent members have a significant number of amendments they want to move to change this bill, but let us hear what the PSA has to say:

The premise of the proposed change is to assist in reducing the unfunded liability of WorkCover. The fact is that more than 40% of the total scheme is self-insured and has no unfunded liability, this includes state government, and at least one or more are in surplus, as well as having lower levies. They operate with exactly the same act and have exactly the same workers' entitlements. Injured workers from these employers who do not have an unfunded liability issue will have to suffer these severe cuts because of the actions of the WorkCover Board and its management.

It is unfortunate that, as qualified as they are, WorkCover Corporation Board members and general management team have not managed the scheme effectively. The continuous budget tightening while building buckets of unfunded liability shows a lack of experience regarding the scheme. The scheme is not inherently unworkable, changing the way it is administered can assist with many of the challenges currently facing WorkCover without having to resort to changing legislation or slashing and burning workers' entitlement.

The current scheme can be reformed without ensuring injured workers bear the brunt of the changes. Changes need to be implemented now rather than a quick superficial change, which will hurt workers and not bring about the desired changes in the long term. It is time to use compassion and not turn our backs on those who are injured just because it is a quick, easy solution.

For the long-term benefit of the state, measures need to be put in place to effectively lead to positive changes. The proposed bill is importing all bad sanctions against the workers, as introduced by Jeff Kennett in Victoria—

the Victorians are doing quite nicely, as I understand it—

but without common law, which is the only incentive for the employers to do the right thing and the only relief for those injured through negligence to pursue compensation in the form of damages, which they will not have access to under this proposed system.

There are a number of steps which can be taken to improve the WorkCover scheme (registered employers):

1. Return to work financial incentives for the employers if they return injured workers for two years or more without an aggravation. (This should be for pre-injury employer and the new employer.) This incentive cannot be available to the employer who has injured employees without offer of employment.

2. Differential levies for claims where the injured worker goes for job seeking. The employers with 50 or less employees should be exempt from this. Financially this will fund the above incentive.

3. Remove the two-year window levy for the employers and implement three-year window levy.

4. The claims management within EML should immediately be restructured to have specialist case managers to deal with likely long-term cases, which would easily be identified by a claims profile, for example, substance abuse/addiction, mental illness or any other severe illness. These cases require proactive management from day one rather than waiting until they are long-term cases. The rehabilitation officers should be accepted as experts in rehabilitation and only a rehabilitation adviser should be able to override or change a rehabilitation return to work plan or rehabilitation program. Case managers are not experts in rehabilitation and EML case management model is badly flawed as it centres rehabilitation on case manager, not rehabilitation officer.

5. The EML should restructure so it creates claims groups by industries, not by the time workers have off, which is current. That way the case managers could build (if EML can keep them long enough) industry knowledge to assist safe, durable and effective return to work.

6. Sections 58B and 58C must have an appeal right by the worker where the employer does not provide suitable employment. Section 58B should not be watered down the way the bill proposes as it is going to be further undermining return to work.

7. RISE scheme should be enhanced by increasing slightly but making it over a longer period of time to allow workers opportunity to settle in the new employment.

8. Retraining must be always a priority for the injured worker rather than waiting until they are a long-term claimant and depressed which never brings any outcomes to the worker or the system.

9. The board and general management team should be placed on the performance-based payment.

10. Return to work inspectorate is not in the proposed bill, contrary to Alan Clayton's report.

11. Ability for the insurer for the insurer to terminate provisional liability without any notice or explanation and without the rights of appeal. Rights of Appeal have been withheld, section 58B being watered down. Section 40 annual leave accumulative period, which is particularly bad for self-insured including government sector (PSA members) is an attack on an injured worker without any benefits to the scheme whatsoever.

12. Proposal is structured in a way that a handful of very seriously injured members are going to be better off and everybody else is going to be much worse off than they are in the current system.

13. The tone of the bill is anti-worker and weighted with a distrust of injured workers, except for the handful who are seriously injured.

14. This is only a short-term answer. What is going to happen is workers will be forced back to work prematurely, returning to the system with further and more severe injuries. It will be a revolving door of injured workers, adding further costs to the scheme and to the community both in human and dollar terms.

That last point is an important point. In the Clayton Walsh report there is a discussion about return to work rates and how bad they are in South Australia. The report also talks about return to work rates where workers do get a job but do not last long in the job and are back on the scheme quickly or out of a job. That is something which should be considered.

It is worth noting the Public Service Association's concerns. Certainly, self-insured groups are all working under the same legislation but some of them are managing more efficiently than others. How do you tell a corrections officer who has been beaten up by a mental patient locked up in one of the prisons, 'Sorry mate, you have to have your wages cut after 13 weeks'—even though it is now down to 90 per cent—'even though you cannot get into a specialist to have your injuries fixed.' It is a tough thing. People do not go to work to get injured. Certainly, this is where we must have compassion for injured workers.

The range of people covered under the self-insured sector, the public sector employed by this government, is quite amazing. The range of employees in this sector should be looked at by the government. If the self-insurers, as part of the government, can manage their scheme really well, perhaps it is not the legislation but, rather, the way in which the cases are managed. I put on the record that EML is a self-insurer. I would be interested to see how it manages its own workers.

Other groups have been making submissions with significant enthusiasm, including a group which represents lawyers in South Australia. The Law Society of South Australia has made a submission to the opposition, and it is important that the government is aware of its concerns. I have a copy of a letter dated Monday 1 April that was sent to the Hon. Patrick Conlon by the Australian Lawyers Alliance, which is looking for the inclusion of common law rights to sue. Is that an indication that it thinks the legislation is flawed and there needs to be recourse to common law? I am not sure that is something anyone, other than some of the unions and the Australian Lawyers Alliance, would support.

The Law Society, however, came and sat down with us, and its submission makes very interesting reading. I will not read it verbatim, but I will certainly pick out the points that are salient and need to be noted by the government. Section 4 pertains to average weekly earnings and provides that the average weekly earnings of a worker is the average weekly amount paid to that worker earned during the period of 12 months preceding the relevant date.

Section 4(12) provides that overtime is to be disregarded where the worker has no reasonable expectation to work overtime within the foreseeable future. When overtime is to be taken into account, it is to be calculated on the basis that the component for overtime is the total of the amounts paid to the worker for overtime during the period used to calculate average weekly earnings divided by the number of weeks in that period. The need to review that is a concern of the Law Society, and that is just one of many of its concerns.

The Law Society highlights concerns regarding the rehabilitation and return to work provisions in section 28D. If the government does not have a copy of its submission, I am more than happy to provide the minister with a copy. The Law Society has issues with section 35 regarding weekly payments, and it is an absolute must that the government at least considers some of these concerns.

The discontinuation of weekly payments in section 36 is a serious concern for the Law Society. Its concerns revolve around the fact that the tribunal should not make a direction under section 91B if it is satisfied that there continues to be a genuine and substantial dispute about the worker's entitlements to weekly payments and no guidance is given about what is meant by 'genuine and substantial dispute'.

Redemption by agreement as a right is to be abolished. The Law Society believes that redemption by agreement should remain in the legislation, because the society does not agree with the view that the existence of redemptions and the ability to redeem creates a compensation culture. It says the ability to finalise liability is important in appropriate cases and, indeed, the proposed section acknowledges this. While the use of redemptions is not completely stopped, it is almost stopped at $30 a week or within a couple of years of retirement, as I understand it. But, as I said previously, some self-insurers use redemptions as early as three months, and the self-insurers do not want the use of redemptions abolished—abolished for all practical purposes—as they have been using them. They do not go in carte blanche and they do not use it as a way of flicking injured workers off their schemes. It is just not worth their while to do that.

The Law Society has a number of other concerns, and dispute resolution is an issue that it has raised concerns about. It is interesting to see that the government has gone back to a three-step dispute resolution system, and I will look at its amendments later this evening to see whether that will happen. It is something that a number of people have put to us should happen. Going to the four-step dispute resolution system was not really looked on favourably by any of the groups we have spoken to.

The issue that most of the lawyers have problems with is Part 6C, the medical panels. I will read from page 10 of the Law Society's submission. It states:

The proposed introduction of medical panels is a matter of considerable concern. The Law Society has taken a strong position opposing the introduction of medical panels. The principal reason for this is that the definition of medical question is so broad. The fact that they are used elsewhere in Australia does not legitimise them if there are cogent reasons why they should not be adopted.

While the Law Society acknowledges that medical practitioners are best placed to determine medical matters—that is what they are trained for—we do not accept that medical practitioners are in a better position 'to determine the medical matters of a claim' than trained judicial officers.

Two points can be made on this: first, we are dealing with a specialist jurisdiction containing judicial officers who have had many years experience in dealing with medico-legal claims and disputes. Their training and experience has been focused on analysing and resolving disputes. We are here assuming that the first instance hearings will take place before deputy presidents, rather than arbitrators.

I think that has changed now. The submission continues:

The second point, which is perhaps more important is definitional: what is meant by a medical question? It is clear that many of the issues regarded as medical questions in section 98E(a) are not medical questions; they involve, as we predicted:

medical issues and factual questions, or

medical questions which involve medical issues, factual issues and legal issues.

One of the 'medical questions' is whether employment is suitable. This is simply not a medical issue at all. Another example is the relationship between an injury and the worker's employment. That is not only not a medical question, but is also one that requires a number of preliminary questions to be determined before it can be addressed, such as what activities are part of the employment relationship. Unlike judges, doctors are not trained to resolve factual or legal disputes. Such an approach is inconsistent with their training and practice. One must, after all, look at the role of doctors. What are they trained for? The reality is that doctors are trained to diagnose and treat. They are not trained as advocates; they are certainly not trained as judges. The manner in which medical panels are to operate is also a matter of concern. A medical panel is not bound by the rules of evidence, but may inform itself in any way it considers appropriate; it can act informally and without regard to technicalities or legal forms; it can engage consultants and seek expert advice as it considers necessary, and the convener can give directions as to the arrangements of the business of the panels (section 98B). Worryingly, section 98G(6) provides that any attendance of a worker before a medical panel must be in private, unless the panel considers that it is necessary for another person to be present. The effect of this is that a worker is not entitled to representation before a medical panel.

Equally, it appears that a compensating authority is also not entitled to representation before a medical panel. Under section 98H(2) a medical panel is required to give a certificate as to its opinion. While section 98H(3) requires the opinion to include a statement setting out the reason or reasons for the opinion, the legislation provides no guidance about how detailed (or brief), that opinion must be. Further, the opinion of the medical panel is not subject to appeal rights. It is to be accepted as final and conclusive. While a member of a medical panel is competent to give evidence about the matters in a certificate given by the panel, the member may not be compelled to give evidence (section 98I(2)). Therefore, no doctor who is part of a medical panel can be questioned about the basis upon which the medical panel reached its decision.

It appears that the establishment of medical panels amounts to a derogation of the powers of the tribunal, as well as a lack of confidence in the tribunal. This lack of confidence is not shared by lawyers who practise on both sides of the personal injury fence. Indeed, this conclusion appears to be reinforced through the removal of the first instance hearings from the deputy presidents to, in the main, non-legally qualified arbitrators. The medical panel introduces a new layer of bureaucracy. It will clearly be costly. For the reasons already given, we do not believe that these costs can be justified. Further, the width of power, the lack of accountability, the lack of rights of representation and appeal in a body that has no legal qualifications, raises major ethical and jurisprudential issues.

The conclusion states:

While the Law Society considers that some changes to the legislation are required, particularly changes to address two-year review problems and changes to lump sum compensation, the Law Society believes that many of the proposal changes in the bill are unnecessary and some are likely to create major problems. The most noteworthy of the proposals that come within this latter category are the proposal to have first instance disputes heard by arbitrators and the introduction of medical panels. The Law Society continues to believe that the unfunded liability could be diminished significantly under the legislation as it stands at this stage. The problem is, in the Law Society's opinion, predominantly claims management related. Claims management is fundamental and critical. The self-insured employers demonstrate how effectively and efficiently claims can be dealt with under the legislation as it presently stands.

What the Law Society says in its submission just backs up what we have been saying all along about self-insurers and case management. The Australian Lawyers Alliance has a slightly different opinion. Its attitude has changed a little. I understood initially that it was not keen to introduce common law. However, in his letter to minister Conlon, Mr Anthony Kerin of the Australian Lawyers Alliance states:

I am writing to advise you that the Australian Lawyers Alliance has some serious concerns about the WorkCover bill and intends to raise these concerns in the media today. South Australian workers will be the only workers in Australia denied the right to sue negligent employers if the WorkCover bill is passed unamended in the state parliament.

It is being amended; we see that. Some 13 amendments are being brought in by the government, but the introduction of common law is not one of them, and I do not think that that was ever expected. The letter continues:

The ALA is of the view that, in the government's attempts to fix unfunded liability, it has overlooked common law rights and the option of lump sum payments, known as redemptions, and this will entrench an enormous injustice in the system. A simple and sensible amendment can ensure South Australia adopts measures of other states such as Queensland. The ALA's proposed amendments include: the inclusion of the common law right to sue; the inclusion of a strategic redemption option; removal of retrospectivity to remove the impact on current claimants; an extension to the 130 week cut-off for injured workers.

The press releases that have been put out by the Australian Lawyers Alliance certainly continue to press its case that the government should not cut workers' benefits. Its press releases are entitled: 'Government should not cut workers' benefits', 'Government to abandon injured workers' and 'WorkCover slashing benefits is not the answer'. Certainly, it pushes that association's point and makes it very clear, indeed. One of the first releases it put out on 28 February was entitled: 'WorkCover slashing benefits is not the answer'. The Australian Lawyers Alliance has criticised proposed changes to workers compensation legislation, and said that the amendments will not resolve the issue of unfunded liability but would drastically cut workers' benefits. Mr Kerin said:

If the Labor Party is intent on pushing through this legislation, it is hoped that the opposition and the upper house review this legislation with significant scrutiny to avoid what will be the draconian effects upon the injured.

That is the whole intent of my reading into Hansard many of these attitudes and opinions from people far more experienced in this area than I. I cannot be expected to stand here and just give an opinion that would be, at best, based on a very cursory knowledge of workers compensation legislation in this place. I am not a lawyer—and, by that, I am boasting, not apologising. I am just a humble veterinarian. I have had workers who have been on workers compensation, and I have seen the way they have suffered and also the complications in having to deal with them. The need to—

Ms Breuer interjecting:

Dr McFETRIDGE: I've got a bit more yet, Lynnie. A significant amount of information has been provided to the opposition by the Australian Lawyers Alliance. While I am tempted to read into Hansard the whole of the 57 pages of evidence that has been given to us by the Australian Lawyers Alliance, I will not do so this evening. However, what I will do, if the caring and compassionate members on the other side—

Members interjecting:

Dr McFETRIDGE: I know some of them are, and they are interjecting at the moment. I understand that it is now 10 to 9, and I have been talking for quite a while, but I have a lot more to say, because it is important that it goes on the record.

Let us have a look at some of the case studies that have been put to us by the Australian Lawyers Alliance and some of the things that will potentially happen if this legislation were to proceed in its current form, even with the amendments. The first case study is of a bloke who is a horse float builder, who left school at the age of 15. He sustained a back injury at the age of 39, on 10 April 2000. There has been no return to work. He is now 46 years of age.

Section 43 disability payments in May 2003 were calculated at a 25 per cent loss of function of the lower back plus a 10 per cent loss of function of the left leg, yielding a payment in the amount of $25,162. Under the WorkCover Board's proposal, using the AMA guides, this worker's disability would likely convert to about 7 to 8 per cent. With respect to whole person impairment, in the result, this worker would have no disability payment entitlement as he would come in below the 10 per cent threshold.

The redemption negotiation history with respect to this case is that take it or leave it settlement offers have been made as follows. In December 2002, this person was offered $10,000. In July 2004, they were offered $30,000. In March 2006, they were offered $45,500. There were significant changes, but this person is only 46 years of age and they have a significant lower back injury and 10 per cent loss of function in their left leg. With a further offer made in 2007 of $40,000, further negotiations resulted in a settlement for the amount $68,000.

This is an example of the real cases with which we are dealing. These are real people. Just as the two people Mike Rann mentioned in his initial press release in 1995 were real people, these people are real people. We had the example of a middle-aged person who sustained a back injury building horse floats in the manufacturing industry. This chap is a stonemason. He sustained a lower back injury in April 2000 and was then aged 38. At the time, he was employed as a full-time stonemason and part-time as a projectionist. Over the ensuing period of about 12 months, he had three unsuccessful attempts at returning to his pre-accident work at the direction of his assigned rehabilitation consultant. All aggravated his condition causing him to become depressed.

Subsequently, he had five unsuccessful attempts at alternative work on a trial basis, four of which he found himself and one of which was found for him by the rehabilitation consultant. Further, subsequently in about July 2004, he found alternative part-time employment as an assistant dental technician. He has been engaged in this work for some three years, originally at some 16 hours per week, but now it is some 10 to 14 hours per week being the limit of his working capacity. He has had no operations but two facet joint injections.

Section 43 entitlements settled in March 2002 at 15 per cent loss of function of the lower back and lumbar spine, yielding a payment of about $11,534. Under the WorkCover Board's proposal, it is a virtual certainty that this worker would not be entitled to any disability payment because he would not reach the AMA guidelines of a 10 per cent threshold. The worker's disability is now assessed at 25 cent loss of function of the back. Another case study of a real person. As Mike Rann used the examples of two people in 1995, these are real case studies involving real people.

This chap was a piggery attendant. The date of injury was in 2004. He had a low back injury, a disc protrusion. He was 31 at that time. He left school at the age of 14 part way through year 9. His educational level was not that high and his options for employment were probably not that high. This would be a case where certainly retraining would be something that would have to be a high priority. The section 43 payments made in September 2006 totalled $33,000 and were made up as follows: the loss of function of the lower back and lumbar spine, 20 per cent; loss of function of the legs—right leg, 10 per cent; left leg, 10 per cent.

Under the WorkCover Board's proposal, this worker's disability might reach the 10 per cent whole person impairment threshold, so the payment would be around $10,000, not $33,000 as under the current scheme. This is the last of the cases to which I will refer tonight. This is a real case involving a female tailor, a tailoress. The date of injury was 15 January 2000: a bilateral carpal tunnel syndrome. This lady was 52 years old. This worker's condition was aggravated in the course of a work placement doing substantially similar work with an alternative employer in June 2002.

The original substantial, although partial incapacity, was then converted to total incapacity for work. Section 43 determinations were made in March 2003 at a 25 per cent loss of function of each arm below the elbow, plus a further payment for disfigurement as per determination of July 2005 at four per cent. These assessments yielded a disability payment of $34,603 and $2,734. Under the AMA guidelines (as per the WorkCover Board's proposal), these disabilities are likely to convert to no entitlement because there is probably not sufficient restriction of movement to qualify for any disability at all.

This may be a lengthy piece of legislation but it is affecting real people. That is why it is worthwhile speaking at length on this legislation to ensure that we do put all the comments that have been made to the opposition on the record. Certainly, there is nothing more pertinent than looking at those case studies and what would happen to real people under these proposals. They would be quite severely penalised by this scheme.

Representatives from the Master Builders Association who came to see us are very keen to see this legislation passed—and passed without delay. In many ways, the amendments we now see in the Business SA proposals reflect the amendments which the MBA says in its submission must be made to the current workers rehabilitation and compensation scheme. I assume the minister has seen these amendments. If that is not the case, perhaps it will be a case of reading them into the Hansard record.

The Master Builders Association has put forward six amendments which it states need to be made to the bill. The Master Builders Association is one of the groups I was a little surprised to see that was prepared to wear the increase in the cap on the levy. I do not know how the association will cope with that increase; I suppose that, if one was a bit cynical, one would say that it will just pass it on to its customers, that is, those people who are having structures built. I think that would be a little unfair, and it is certainly something that all of us would think undesirable.

The first amendment to the workers compensation and rehabilitation scheme proposed by the Master Builders Association relates to psychiatric disabilities. That has been taken care of and has now been removed from those amendments being considered by the government. The second amendment relates to reference of a dispute to the tribunal and the conduct of proceedings, and I understand that amendment has been changed as well. So, we are part way there; perhaps the government has been listening to the employer groups out there.

The third amendment is to section 50B—Commencement of weekly payments following initial notification of disability. The bill's amendment is to delete proposed section 50H(3) in its entirety. In relation to section 32A—Special provision for payment of medical expenses after notification of disability—the bill's amendment is to delete proposed section 32A(9) in its entirety.

The rehabilitation and return to work coordinators, under new section 28D, was an issue for the Master Builders Association, which wants to see an amendment in the bill to delete section 28D—Rehabilitation and return to work coordinators—in its entirety. As an administrative alternative, the association has put forward the following:

Seek a commitment from WorkCover that:

(1) Any development of this type, including regulations, will be developed in consultation with employers; and

(2) The criteria that determine which employers must have a return to work coordinator include both size and risk overlay filters.

The fifth amendment put forward by the Master Builders Association relates to levy payments in advance, as follows:

Amend and vary proposed part 5, division 6, particularly section 69(1) (together with the necessary consequential amendments), such that levy payments continue to be made in arrears based on past remuneration.

The association is very concerned that there is no 'double whammy' payment for registered employers. That it will significantly ease the administrative burden (South Australian Strategic Plan: reduction of red tape) is an issue the association has raised in the belief that this amendment is in conflict with that proposal and, certainly, it is a concern for a number of people who have made submissions to us.

The final concern expressed by the Master Builders Association relates to part 6D—WorkCover Ombudsman—which the association wants deleted in its entirety and, as an alternative, it has put forward the following:

Narrow the scope of the Ombudsman's functions at 99D, particularly 99D(1)(d) (noting that the Ombudsman's powers at section 99E directly reflect the scope of section 99D(1) functions).

My understanding of the current relationship with the Ombudsman is that he receives about 50 WorkCover complaints a year. Whether there is a real need to have a further layer of bureaucracy added to the already burgeoning number of public servants in South Australia is something that is cause for concern for a number of people who have contacted the opposition.

The mining boom in South Australia is a great thing, but to be faced with the $20 billion worth of infrastructure required to be built in this state by both government and the private sector is a big problem that is not easy to cope with. So, encouraging the people involved in the mining industry is something that the South Australian Chamber of Mines and Energy has been aware of for a long time. That is why it has contacted the opposition, urging it to support this legislation. I will just read what it states in its submission. It is a very short letter; it will not take long to read. It states:

The South Australian Chamber of Mines and Energy gives 'in principle' support to the adoption of the Clayton Walsh recommendations (in their review of WorkCover) and proposed amendments to the SA WorkCover legislation. The key reasons for urgent change are:

1. The 'current scheme' is heading for $1 billion (estimate) cost blow out by 2009.

I think you will find it is a bit earlier than that. It continues:

2. SA employers pay up to twice the WorkCover levy rate of other states but even the average levy rate in SA (3 per cent) is the highest in the country and 'at least' 33 per cent higher than that of Victoria and New South Wales who have comparable systems.

3. SA has the worst 'return to work' rate of any system in Australia, costing the scheme in excess of $350 million, which points to the need for structural changes to the scheme.

4. SA has approximately 3,000 employees still on WorkCover's payments for an 'average' of eight years and once a worker is off work for four months, in SA there is 80 per cent likelihood that he/she will be off work for two years or more. By contrast, in NSW and Victoria, the same employee has only 30 per cent chance of being off work for two years.

5. Critically by comparison with other states, it is a far more expensive WorkCover scheme in SA and it need not be. Arguably it contributes to our massive skills shortage and the cost of sourcing and training new workers given the shocking return to work rate after four months absence (80 per cent chance of no return to work at two years) and the loss of residual skills and knowledge as a consequence.

The amendments that the South Australian Chamber of Mines and Energy (SACOME) have put up are very similar to some of those that have been put up by other groups. I do note that the government has actually taken notice, or seems to be aware of some of those—whether they have taken notice of them I do not know—and we see some amendments on the table, and we hope to see some more.

The other group that was very keen to see the legislation passed urgently, when it came to see the industrial relations portfolio committee, was the Engineering Employers' Association. Its letter to the Leader of the Opposition, Martin Hamilton-Smith, contains some amendments, a lot very similar to those put up by Business SA. I will just read from the covering letter so that everybody is completely aware of the Engineering Employers' Association's concerns. It states:

The workers compensation saga in South Australia has been a long one in recent times but EEASA, who represents some 450 companies in the metal and engineering manufacturing sector, has been regarded as a key stakeholder in workers compensation reform. Indeed our pivotal involvement goes back to the late 1980s and the establishment of the Workers Rehabilitation and Compensation Act, and prior to that the Byrne committee...In particular our average levy rate is well above the other states and our return to work performance is well below the other states.

An important issue to remember as we consider the present legislative form is that since Minister Michael Wright announced the formation of the Clayton Review in March of last year, four jurisdictions (QLD, NSW, VIC and WA) have announced a decrease in average levy rates. Consequently we believe that South Australia by doing nothing, is going backwards...Hence, to do nothing in the present legislative debate for workers compensation reform is not an option from our association's point of view.

Unfortunately, that is the position the opposition finds itself in: that doing nothing is not an option. While we have some very serious concerns about this legislation we do have to agree with the engineering association that doing nothing in the present legislative debate is not an answer.

A broad assessment is that 70 per cent of what we would like to happen in legislative reform is probably contained in the government's bill. So, we give 7 out of 10 for this one. Business SA said 6½ out of 10; the Engineering Employers' Association, 70 per cent, so it is 7 out of 10 for this legislation. The letter from the Engineering Employees Association continues:

However, if in fact the debate gets down to pass the Bill...our association would support that the bill be passed in its present form.

The association is really quite desperate to see some changes and certainly, speaking to it, we can understand that it does have some issues and would love to see a better piece of legislation on the table. The letter continues:

On balance we will be putting forward amendments...The reality is that there is a consensus amongst most employers and these amendments have the collective backing of the employer community.

The association highlights that the doubling of the cap to 15 per cent will mean that a considerable number of employers will be facing increased levy rates, despite the fact that a number of measures are being put in place to curtail costs and improve return to work rates. I am glad to see that the government has actually done something about that. The engineering association makes this final point in its letter:

The final point we would like to leave you with is that this package probably needs to be the first of a number of packages over the next few years. If successful, this package will leave us with an average levy rate not less than 2.25 per cent, which still makes us one of the most expensive workers compensation schemes in history.

It has enclosed a series of six amendments proposed for this bill that are very similar to amendments that have been proposed by other stakeholders. The need to ensure that every person who has spoken to the opposition has been listened to and that the information they have provided has been distributed to this house cannot be overlooked.

While the government may complain that it is having to sit here and listen to this, it should have consulted in the first place. A number of people who came to see us said that they needed to be heard, that they needed to be taken notice of, and we in the opposition have done that. We have listened to them and taken notice of them and, as a sign of the fact that we are genuinely concerned about them, we are happy to be here tonight to continue to read into Hansard the concerns of business groups in South Australia.

We do care about business in South Australia; we care about South Australians generally; and we care about the WorkCover scheme that will not be fixed by this legislation: 6½ out of 10 by Business SA, and seven out of 10 by the Engineering Employers Association. It needs to be fixed. So far the government has filed 13 amendments to what the Deputy Premier told us this morning was a good piece of legislation.

South Australian wine industry representatives also contacted us. They were unable to come to see us but, as the peak body representing wine grape growers and winemakers in this state, the association membership comprises about 93 per cent of the state's wine grape crush and approximately 36 per cent of the viticulture area. The concerns that they outlined were attached in a table for us. Their letter states:

Attached is a table outlining the key amendments of the Reforms and the Association's position on each of those including what proposed amendments we want removed from the Reforms.

There is a series of them here. I will not read those into Hansard because they are similar to many of the others. We do not see the government acting on what is a common message that has come out of many of these employer groups that there needs to be changes to the weekly payments, which has happened; there needs to be changes to the work capacity reviews; there need to be changes to the non-economic loss; and there needs to be changes to dispute resolution which, I understand, has happened. Certainly there are a number of other proposed amendments which are in some cases taken care of by the government but which are also common to other people who have contacted the opposition.

Another group vitally involved in the workers compensation scheme is the Mediation and Employment Relations Services Group. That group has contacted us because, in its submission to us, some serious concerns have been raised about the current situation and also the proposed changes. I will just read the start of this letter from a Mediation and Employment Relations Services Group representative:

We wish to share with you some of our frustration in dealing with the board's decision to cease funding Mediations Services in 2004.

The letter continues on about how mediation is a vital part of getting workers back to work and, certainly, the need to recognise the fact that not all employers and employees will see eye to eye on how their cases should be managed. However, having spoken to the people from Mediation and Employment Relations Services, I can see that there is a need to revisit the inclusion of mediation services in the handling of cases. As far back as 2004, the WorkCover Board's decision to cease funding mediation services was a serious concern for the opposition. Certainly, I would ask that the minister give some explanation as to why that is the case.

One of the first groups of people we spoke to in our discussions on this bill was a group from Victoria, which was having discussions with South Australian employer groups and even WorkCover, I understand, about ways of improving outcomes for the workers compensation scheme as it is. This group—Cambridge Integrated Services—gave us a presentation in February, and the issues that it raised were certainly interesting, important and worthy of putting on the record here. It is only a couple of pages, so I will read it into Hansard. It states:

Since September 2007, Cambridge has been engaged in broad discussions with various parties in South Australia to fully understand the current workers' compensation environment. During these discussions, a number of performance concerns were raised together with proposed legislative remedies.

Feedback received indicated that significant improvement in service delivery and claims management performance is possible within South Australia through a tightly managed claims operation. We have outlined examples of current Cambridge practices that we believe will provide improvements in each of the areas of concern.

Issue: Timeliness of agent contact with both injured worker and employer ('Customer service' culture).

Cambridge approach:

Cambridge contact be achieved within three days—(Victorian scheme requirement is within 10 days).

Structured review schedules and continuous contact through our case conferencing model. Our internal rate of person to person requirement is approximately double the Victorian requirement.

Issue: Content of contact with the injured worker, including explanation of the claims process, the resources available, understanding options available to assist with return to work and need to strengthen return to work requirements.

Cambridge approach:

Structured communication process that ensures injured workers clearly understand their rights, entitlements, obligations and claim process under the legislation. This includes direct dialogue together with formal information packs written in plain language.

The strength of our approach ensures that both the injured workers and employers are left with accurate and realistic expectations about their role in establishing sustainable return to work.

The other issue that Cambridge raised was the lack of employer involvement in a return to work environment. It pointed out:

...(RTW environment seems more difficult in SA—perhaps because of labour market and more limited options, but also lack of employer commitment and engagement)

Cambridge approach—

and I am sure this is what it is recommending to be put in place in South Australia—

We constantly analyse our employer's claim numbers, trends and return to work outcomes. This enables us to successfully target and engage employers in return to work training programs. We provide this service free of charge to employers and tailor the program based on the employer grouping.

Cambridge achieved the result of 104 per cent for return to work coordinator training in Victoria (Scheme average 71 per cent).

This is the important one here:

Tail claim focus and management—particularly the one to three years (recognising the legislatively driven difference in the tail is the SA scheme)

Cambridge approach:

We maintain a highly structured case conferencing regime conforming to scheme requirements that encompasses both emerging and established tail claims. Our approach is further reinforced with intensive claim reviews performed by senior technical and injury management specialists and early referral to job seeking rehabilitation panel.

I would recommend the Cambridge approach at least be examined by WorkCover and taken on board by the government. They were very keen to talk to us and they see opportunities for enhancing the performance of the WorkCover scheme in South Australia. I strongly encourage all members to have a look at the Cambridge organisation because they are doing things very well.

Another organisation is doing exceptionally well and it was put to me by people who have long experience in workers compensation and rehabilitation in South Australia that I should speak to Greg Saunders at Vedior Asia Pacific, which is a group managing thousands of workers in Australia which is able to manage these workers exceptionally well through the self-insured scheme.

Vedior pointed out to us, and it should be noted, that South Australia's claims cost up to 12 times more than New South Wales and Victoria and, on 28 March in a press release, Vedior said:

One of South Australia's largest self-insurers, labour hire firm Vedior Asia Pacific, has highlighted the stark difference in workers compensation costs between the state and others, and recommended that a starting place for repairing the struggling scheme would be to combine WorkCover's functions with Safework SA.

They were the only ones to recommend that and, because of their outstanding claims management, it would be interesting to see the government's attitude towards that.

I know that Safework SA was separated a few years ago by the government. I went to a national conference on workplace safety where Safework SA was one of the major sponsors. They are doing quite a good job but it has been suggested that bringing them back under the umbrella of WorkCover would be a much more efficient way of ensuring that workplaces are safe, particularly for injured workers, and employers are encouraged to ensure that their workplaces are safe in the first place in order to reduce injury rates. It may be that this synergy would be achieved by combining Safework back into WorkCover itself as recommended by Vedior Asia Pacific.

The interesting thing is that Vedior Asia Pacific has said is that its premiums in South Australia are just so much higher than anywhere else and, even though they have reduced them over a number of years, they are still having problems mainly based with getting workers returned to work and being accepted back into workplaces by the employers.

Vedior's record should be noted by the government, and I encourage the government to speak to such people as an example of how cases can be managed. The fact that they employ thousands of people and use redemptions as early as three months is something I found quite interesting as a way of managing the long-end tail of their workers compensation schemes. I did not find it, in any way, a hard-nosed organisation that was just chopping off workers' entitlements and throwing them onto the scrap heap.

A submission was put to us by a group of lawyers which had a little paragraph about the WorkCover changes and a statement that the overall intent was that Labor wanted to force injured workers onto minimum assistance from social security in the shortest possible time. That was a claim put up by the Premier and the Deputy Premier when they were talking back in 1995. It is something that really needs to be recognised. Nobody wants to shove workers onto a federal social security scheme where taxpayers generally are being held responsible for payments to these workers.

One fellow that I am sure everybody in this place (who has had anything to do with workers compensation) has heard of or has come across, is a chap called Phil Moir. Phil is a passionate advocate for changing the way WorkCover is being administered, and he has been to see me on a number of occasions. His calculations on the effect of these current changes are different to what a number of people have been saying in this place. He highlights the release put out by WorkCover on 19 January 2006 with the following dot points:

All South Australians will benefit from sweeping reform to injury and case management announced today by WorkCover.

WorkCover Chief Executive Officer Julia Davison said Employers Mutual had been appointed as WorkCover's sole claims agent following a rigorous and highly competitive tender process for new agent contracts, effective 1 July 2006.

'Injured workers and employers will benefit from more claims managers delivering consistent service from an agent that has an outstanding track record, an excellent model for achieving improved recovery and return to work outcomes', Ms Davidson said.

'Injury and case management is Employers Mutual's core business and it shows.'

In a clear win for the South Australian businesses that pay for the scheme, Employers Mutual expects to cut the claims liability by up to $100 million a year after only two years under the new contract.

That has not been achieved at all, and I do not understand why that is so. The anecdotal evidence given to me is that, because of the high turnover rates among case managers in EML, the cases are not being managed as well as they should be. It has been pointed out to the opposition (and I have pointed this out tonight) that many of those submissions focus on the fact that it is all about claims management and, in fact, even Clayton in his report emphasises that. That is the key to making sure that the scheme is working.

The return-to-work rates in South Australia are certainly nowhere near as good as they could be. That is a common theme throughout many of the submissions that have been given to us. Mr Moir, in his submission to us, disagrees with some of the figures out there, but he focuses on the fact that return to work is a crucial part of the WorkCover scheme in South Australia.

One person I found quite interesting to listen to about some of the ways in which workers are managed in South Australia, not only in the WorkCover scheme but in industrial relations generally, is a fellow who is well known to people in this place—Dr Kevin Purse. His qualification is one of a real doctor, a PhD, and a fine gentleman he is. I know he certainly has his heart in the right place when it comes to issues regarding WorkCover. He has spoken to me on a number of occasions and, in fact, as recently as yesterday spoke about some of the changes proposed by the government. He is certainly not a fan of these changes. Dr Purse issued a statement on 1 March 2007 and, for the benefit of members in this place, I will read some of that into the Hansard. Dr Purse said:

WorkCover management wants to make big cuts in compensation payments to injured workers. The rationale put forward is that injured workers are to blame for WorkCover's poor performance, rather than its own continuing inability to manage the scheme. As part of the first in a new series run by SAPO titled 'Policy Challenges in South Australia', Kevin Purse from the Hawke Research Institute, examines the reasons behind this trend as well as the possible implications.

When Dr Purse was examining the current trends and implications he confirmed the views of most people who have spoken to us that the issue is that of case management. Case management is a serious issue for WorkCover, and that comes back to EML. I will not get stuck into EML tonight, because it is not my job to do that—my job here tonight is to make sure that the government's legislation will enhance what EML is trying to do—but I certainly encourage the people at EML to have a cold, hard look at what they promised, what was on the table, what they were required to do in their contract, and what has actually been delivered to date. We look forward with great trepidation to the unfunded liability that will, I believe, be given to the government tomorrow and to the house in the next day or so.

Rehabilitation providers in South Australia do not get much of a mention in this bill. The 'R' word is right up there in the title of the bill. Any history of the bill you look at is all about rehabilitation and return to work, but in this particular bill the 'R' word really does not get much of a mention, or does not get put into the context of actually improving the rehabilitation process. I would be happy to be corrected by the minister, but I have seen nothing in the bill that will really enhance the way the rehabilitation process is working in South Australia. I suppose the return-to-work coordinators could be seen as part of that, but is that about rehabilitation in the workplace or is it about rehabilitation of the injured person?

I believe George Hallwood, who has sent a submission to us, is a senior officer in the Rehabilitation Providers Association, although I am not quite sure of his exact title. However, I have a copy of some of that association's input into this legislation, and it is quite easy to see what it thinks about it, because the good bits are in green and the bad bits are in red—and it is page after page of red, blocked out amendments. I am more than happy for the minister to be made aware of some of the changes, but I assume that his officers have been working very hard to see what is out there and what people out there are thinking.

Rehabilitation is the main emphasis of this whole legislation, and the history of this legislation has been all about workers compensation and rehabilitation; that is why it was put that way in the title of the act, not put the other way around. It was about rehabilitation first and compensation second, yet in the bill today we see rehabilitation not really being a priority as far as enshrining it in legislation. Perhaps that will come in regulation later on. I hope so, because providing rehabilitation to injured workers is something they want. They want to get back to work; they do not want to sit out there and not be able to go back to work as soon as they can. As Mr Clayton pointed out, cutting workers' entitlements is not a vital part of providing an incentive to get them back to work.

The house will be pleased to know that the final piece of evidence about the need for change was given to us by a lawyer who has a long history in the workers compensation scheme. Whilst at 9.30 at night I am very tempted to read all 17 pages of his blow by blow description of what needs to be done, I will read in some of the questions. There are 47 questions that have been provided to me by this lawyer, and they may be better off asked in committee. Certainly, I will let the minister know that there are areas of concern. I will give the minister and his advisers some idea. There are serious concerns about redemptions.

The first question is: if the scheme is to operate fairly, why does proposed section 35(5) continue to allow the WorkCover Corporation to insist in relation to a redemption lump sum offer that the worker agree to a weekly rate for the purpose of future claims which does not fairly reflect the weekly value of the lump sum offered to that worker for the rest of his working life? That is the tone of the questions on redemptions, and there are some others.

One of the first questions about automatic cut off in relation to weekly payments to partially incapacitated workers after 2½ years is: does the government believe that if a partially incapacitated worker is not in employment after 2½ years of receiving income maintenance then the only reason is that the injured worker has not genuinely tried to get back to work? Otherwise, why is there a distinction between partially incapacitated workers who are in employment and partially incapacitated workers who are not in employment at the 2½ years mark in operation of section 35C? There are another 10 questions on redemptions, and I am more than happy to save them for the committee stage.

As I said before, rehabilitation is an area where there is a need to get more of an emphasis in legislation or perhaps regulation. The first question here that has been provided to me is: if the main reason suggested by the government for the blowout in unfunded liability is the number of partially incapacitated workers who continue to be in receipt of weekly payments of income maintenance years after sustaining a compensated for disability, why does the government believe that the answer is to take a drastic step 2½ years after the injury is sustained? Why is there not a greater focus upon claims management and rehabilitation at an earlier stage? This is what people like Cambridge, Vedior and the Rehabilitation Providers Association emphasise.

The final issues that have been raised by this particular chap concern the dispute resolution process. The first question is: given that Mr Clayton is from interstate and the corporation has had the day-to-day running of matters through the dispute resolution process, why has the government preferred the recommendations of Mr Clayton in relation to arbitration being the primary hearing rather than a judicial examination before a presidential member of the tribunal, and why has it proposed a medical panel to deal with issues which are clearly not medical questions in the ordinary case? I think that part of that question has already been answered, but, certainly, there is the continuing issue that keeps coming up about how medical panels will actually work, giving a quasi-legal-medical opinion.

There is a series of questions there, and I am happy to provide them to the minister if he really wants them, so that they can be answered to save time, on the medical panels and on the way they will work. In terms of the new proposed section 43, the first question is interesting, and it will be interesting to hear the answer. In relation to new section 43, what are the WorkCover guidelines?

The second question under this section is: how can anyone assess the reasonableness of what is being proposed in relation to the new section 43 without knowing what is contained within the proposed WorkCover guidelines? Getting some direction on the guidelines would be a worthwhile thing before the committee, or at least in committee, because there is a series of questions that need to be asked. There were questions about the inclusion of psychiatric impairment, however I see from the press release that they have been removed.

The last group that I refer to is the Australasian Faculty of Occupational & Environmental Medicine, South Australia (AFOEM-SA). They have concerns about the legislation. They suggest:

The current picture in South Australia is likely to be impacted on by a range of factors relating to the nature of the work and working arrangements, the availability of suitable duties, success rates in early return to work, and is significantly influenced by social, educational, health and other factors.

AFOEM-SA refers to the document 'Compensatable Injuries and Health Outcomes', produced through collaboration with other groups for an indepth discussion of a range of complicated factors operating within this scheme.

In broad terms, AFOEM expresses its concerns about the level of financial support. Faculty members have concerns relating to circumstances of severe injury where injured workers may not receive adequate financial support. Such financial support, of course, not only goes to the worker, but to the families as well.

It is a good point to finish on: this is not just about injured workers, this is about South Australians, families, and ensuring that this WorkCover legislation will be amended in such a way that it will be a scheme that we can continue to be proud of. I do not think that boasting that this is the fairest workers compensation scheme in Australia is something we should be ashamed of. We should not be ashamed of that at all, and I hope that the government sees the need to enshrine in legislation the fact that South Australian workers do deserve the very best.

I said at the start of my second reading speech that I do expect members of the backbench of the Labor Party of South Australia to stand up and to do what Kevin Foley, then opposition member in this parliament, said in 1995: to stand up, have some guts and take on the frontbench and make sure that the workers of South Australia are not done over by this legislation, just as importantly as the businesses of South Australia need to be provided with a scheme that is going to work in a smooth and fluid manner.

I look forward to the committee stage of the bill because we have a number of questions to ask for clarification. A number of the government's amendments are on the table that we will be discussing and we look forward to the government listening and taking note of the submissions that I have read into Hansard, and listening to people out there who are still obviously unhappy.

As Janet Giles has said, we hope that the government does see the error of its ways and recognises not what the deputy premier claimed—that this legislation is already a good piece of legislation—we need good and fair legislation. It needs to be fair for all South Australian workers, their families and the businesses of South Australia, but, more importantly, for the state to be able to hold up its head and say we do look after South Australians in a fair and equitable manner. I look forward to making a further contribution during the committee stage of the bill.

Mr WILLIAMS (MacKillop) (21:39): I think I can take us through to 10 o'clock, or very close to that hour, when sensible people should be going home to bed. About three years ago when the then leader of the opposition, Iain Evans, asked me to take on the role of industrial relations spokesperson on behalf of the opposition I was very concerned because it was an area I had little knowledge of and I had little knowledge of what had already been identified as a problem for the government, that is, WorkCover. I spent a considerable amount of time reading many documents, many review reports and meeting people I had never met before, talking to people and listening.

Mrs Geraghty interjecting:

Mr WILLIAMS: I tell the member for Torrens one thing: I am looking forward to listening to her contribution on this debate, as I am looking forward to listening to the contribution of the member for Ashford and a number of members opposite. My gravest fear is that members opposite will not contribute to the second reading or committee stage of the bill. I have a grave fear because many members on that side of the house have strong feelings on this matter. I know that some members opposite like myself have grave fears for the future of working men and women in this state.

I know there are members opposite who would like to contribute to this debate but, unfortunately, I fear I will not hear their contribution. Member for Torrens, I would love to listen to you explain to your electors why you are supporting this piece of legislation. Unfortunately, I do not believe I will hear it. There are a whole lot of members opposite who I would enjoy hearing from. In fact I will sit down now and say nothing more if you will undertake to speak for 20 minutes on why you are supporting this. Are you going to speak for 20 minutes?

Members interjecting:

Mr WILLIAMS: You will hear my position, but unfortunately that is something I will not hear from you. You will hear my position.

Before I was so rudely interrupted I was explaining that over an extensive period I got to meet and talk with a significant number of people and got better than just a basic understanding of the WorkCover animal. I met a lot of very genuine people and, unlike your minister, I gave up a few Saturday mornings and went to some forums held by injured workers and listened to them and talked to them about my feelings about WorkCover. Time after time I sat there and heard that your minister refused to go. He sat in his ivory tower making decisions about WorkCover and would not get out and talk to the people who were the recipients of his mismanagement, the clients of WorkCover, as that is what they will be over the ensuing period. It will not be a long period as he will cut them off. At least I got out and talked to these people, listened to them and got some understanding of their plight. We can come back to that.

I had been handed the responsibility on behalf of the opposition, one that I took reluctantly as I had little knowledge. However, I developed a considerable knowledge through the reading I undertook and I will go through a little of the history of WorkCover. Workers compensation had a long and chequered history through the late 1970s, early 1980s, and eventually in 1986 the minister's father was responsible for introducing the legislation we have that he is attempting to amend today. The original debate on the legislation was heated, protracted and eventually it got through the parliament and we started to work with that legislation. We had in the late 1980s, early 1990s, the other disaster foisted upon South Australia, the State Bank collapse, the collapse of SGIC and a whole host of other bad management and investment decisions by Labor.

We are seeing the Treasurer involving himself in bad management today. We are seeing today's state finances being mucked around with by amateurs and we are heading down the same path. In a few years the people of South Australia will realise that Labor cannot be trusted with money, just like it cannot be trusted with WorkCover.

We had a change of government in the early 1990s; in1993 WorkCover was a mess. In June 1994 WorkCover had an unfunded liability of about $275 million. It was a mess, it was bleeding. In real terms it was almost as bad as where we are today. WorkCover was not going to survive. The then Brown Government instituted reforms to the legislation and made significant changes, not with the help of the then Labor opposition but, rather, against the wishes of the Labor Party. It managed to get some reforms through the parliament—not all the reforms it wanted, not the sort of step-downs we are seeing the Labor government introduce now to injured workers' benefits. The Labor Party would not support those reforms in those days. During the late 1990s the WorkCover scheme financially came under control to the point where, as Alan Clayton said, at the beginning of 2000 WorkCover was financially viable and stable.

Mrs Geraghty interjecting:

Mr WILLIAMS: I am just quoting Alan Clayton, whose report you are now supporting. He said that it was financially stable and it was a scheme that was admired because it was at the forefront of providing benefits to workers. As one went around the country and attended WorkCover conferences, one heard from people who had looked at the South Australian scheme and were saying, 'This is the way a scheme should work and can work because it has been done in South Australia.'

We had a change of government in March 2002. At the end of 2001 we had the lowest recorded unfunded liability of WorkCover in the past 15 years—some $22 million. At that time we had a significant downturn in the stock market, not unlike what we are seeing now. In that financial year we saw the fortunes of the investments of WorkCover turn around. Where we were getting a bit over a 13 per cent return on the investment of $700 million, it went into negative territory. In that one year we lost—or did not gain—something amounting to just over $70 million worth of returns from those investments.

By the time we came to the change of government, the unfunded liability had crept up. I think the end of June figure was around $60 million to $80 million. I am not sure whether it was $67 million or $84 million, but it was one of those figures at the end of June 2002. It was still in very manageable territory. We had a change of government, a change of minister and a change of philosophy. The minister said, 'We will not have injured workers being redeemed out of the scheme.'

Interestingly, half an hour ago I went onto the WorkCover website. I have been out of the state for a few weeks and I was wondering what has been happening at WorkCover in the past few weeks. I went onto the website and read the news releases of recent weeks. Bruce Carter, the Chairman of the board, put out a news release on 18 March. It states that he was correcting a claim by Rob Lucas that 'the blow-out started when redemptions stopped'. At the bottom of the press release he has included the number of redemptions for each year from 1995-96 through to the current financial year. It indicates to me exactly what the problem was. I will read out the number of redemptions taken by injured workers in each year between 1995-96 to 2007-08.

These are the numbers: 1,897, 2,224, 1,168, 1,277, 923, 779 and 830. Remember: this is the period when the unfunded liability was coming down and being got under control. The number for the year 2001-02 when we had a change of government was 830. In the first year of the new government it was 1,113, a bit of a jump. Then it goes down to 505 and 864. Then the minister got rid of the three claims managers that were left working for the scheme and installed EML as the sole claims manager. In a deal with EML, which said, 'We don't want to take over this mess that you have got, minister, with the long tail of claimants who are not getting back to work', WorkCover spent something like $50 million in the June quarter of 2005-06 more than its ongoing quarterly costs.

The ongoing quarterly costs of WorkCover at the time were between $95 million and $105 million per quarter. In the June quarter in 2005-06, the cost to WorkCover to run its operation went to $150 million-odd. In estimates I asked the acting minister, the member for Kaurna, the reason for that and he said, 'We paid out a lot of redemptions. We wanted to pay out a lot of people.' I said, 'Why would you do that?' and he said, 'We wanted to get them off the books, I guess.' He did not really know what he was saying, but he was spot on. They wanted to get them off the books. There were 1,436 redemptions that year, then it dropped to 431 in 2006-07 and back to 404 in the most recent year.

Anyone who looks at the history of WorkCover over the last 15 years would be blind if they did not see the problems at WorkCover, and the minister uses the euphemism 'we have a poor return-to-work rate'. I will say it honestly: we have people who stay on the system year after year and we cannot get them off the system. Why is that causing a problem? Because WorkCover was designed to get workers into employment and back into the workplace within two years—rehabilitate them. WorkCover spends more money on private investigators than on rehabilitation. It spends more money on lawyers than on rehabilitation.

Mr Griffiths: It's a disgrace.

Mr WILLIAMS: It is a disgrace. We should be asking what in the hell is going on down at WorkCover, because it is not performing its key function of getting people back to work. When we were in government we said to people, 'If you do not want to go back to work, we realise you have a problem.' My understanding, having spoken to injured workers, is that they get wound up in a system which literally drives them mad. Most people who have been on WorkCover for probably more than 18 months but certainly more than two years end up with some sort of psychological problem. That is the information that is given to me when speaking to injured workers. They just get so wound up by the system. They generally want to get their lives back and get off the system.

Because section 35 of the act never worked, because the tribunal always overturned on appeal decisions made under section 35, it was just not being used. The only tool left was redemptions, and at least when we were in government (bearing in mind that the Labor opposition at that stage would not allow us to change the legislation to sort out section 35), we used the only tool available and we said to these people, 'Here is a decent payout; take this and go off and manage your own life' and, by and large, those people were happy to do that. I can only presume they got themselves back into the workforce somehow or got their life back together. At that time as a member of parliament I was not being inundated with calls from injured workers complaining about the system, as I have been in recent years.

Obviously, it was working, but the problem was with section 35. It was not working, and the opposition of the day would not allow the Liberal government of the day to sort it out and fix up section 35. That is probably all we need to do to WorkCover to make it work properly. All the other things—the step downs and the cutting of benefits to injured workers—are not necessary. Fix up section 35 and get the case managers to read and understand the act and establish some case law so that they can go before the tribunal and win their cases, because—

Ms Simmons interjecting:

Mr WILLIAMS: Well, she might be able to answer my question, so I will ask the member for Torrens: how long has it been since WorkCover or the case manager, EML, has run any significant numbers of cases under, say, section 35? How long? It gave up doing it years ago. It walked away from establishing a body of case law. All EML does now is just process the claims as they come through. It does the paperwork, turns them over and, two years later, whoopee, a whole heap of people are still on WorkCover, and we have a problem. We have an escalating unfunded liability. At some stage you have to get these people off WorkCover.

What the honourable member's government has said and what the honourable member's minister is saying is that every person on WorkCover at two years is a malingerer. The honourable member is saying that every person on WorkCover at two years is a malingerer and you are just going to cut them off. Unless they have a very serious physical injury, which no medical panel can fail to recognise, they will be cut off. That is what will happen to all these people, and they will become invalid pensioners. That is what the blind eye you have turned to this incompetent minister for the past six years has cost the injured working men and women of this state.

That is the result that members opposite will get because they have allowed an incompetent minister to preside over WorkCover for six years. Instead of installing a system and making section 35 work, where you can have people go through a process which is open and accountable and determine whether or not they have a genuine case to continue on WorkCover, you are saying, 'Sorry, unless you have a very visible, physical injury, goodbye. You become an invalid pensioner for the rest of your life.' That is what injured workers in South Australia can look forward to. Why can they look forward to that? Because members opposite have stood behind an incompetent minister for so long.

The opposition has been highlighting this matter since about 2003. In about mid 2003 it came to our attention that WorkCover was in trouble. We have been asking questions, making statements and pressuring the minister and not once has the minister or anyone on the government's side of the house acknowledged that there was a problem. Members opposite were always in denial.

The people who will suffer that denial are the injured men and women—those people who the government purports to represent, the working men and women of this state. It hurts me that we have arrived at this point. I represent as many working men and women as every other member of this house, and it hurts me that the government of this state and a government that purports to stand up for working men and women has done what it has done.

It hurts me that a minister, the son of the man who gave us this WorkCover law, has been so incompetent that now, after two years, we will cut these men and women off and turn them into invalid pensioners. It is a shame.

Time expired.

Debate adjourned on motion of Hon. M.J. Wright.

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