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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2013-03-05 Daily Xml
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WORKCOVER

Mr VENNING (Schubert) (15:35): The South Australian WorkCover scheme is the worst performing in Australia. The unfunded liability has blown out to more than $1.3 billion. Our return to work rates are the worst in the nation and our levies are the highest. It is an absolute disgrace and it is continuing. One sector experiencing extreme difficulties with meeting ever increasing WorkCover levies is the aged care industry, especially now that the levies are calculated on the 'experience rating scheme', enacted on 1 July, where more emphasis is put on claims experience.

The aged care sector does experience probably a higher level of claims than other industries. There is a lot of manual handling work and facilities often have staff that fall within the older age bracket. As such, strains, injuries and wear and tear injuries are not uncommon. I have several excellent aged care facilities and providers in the Schubert electorate, particularly in the Barossa Valley, who do a fantastic job.

I have been in contact with some of the larger providers. They have all expressed their extreme concern about the increases to their WorkCover levies and, as a result, their viability into the future. One case that has been brought to my attention is a provider who currently pays more than $500,000 per annum in WorkCover levies. The premium is higher than the total WorkCover claims this particular facility has had over the past four years. The forecast this facility has been given for their levy liability into the future is that it will blow out to $1 million by 2016. This is simply not sustainable. This particular facility averages between 10 per cent and 20 per cent of that in claims per year.

How can such a levy increase be justified? I know of several aged care facilities that are struggling to meet their current premiums. What do they do when they are forecast to increase so much? Every increase to the WorkCover levy has to be funded from somewhere. Fees to residents cannot be increased as they are regulated. Federal government subsidies to aged care facilities are not increasing to meet ever rising costs, so it is largely the capital account that gets impacted, which means the facilities cannot upgrade or expand as they may have planned. I have been in contact with another facility and the management said to me, and I quote:

The WorkCover scheme appears to have failed miserably at all levels. The scheme is significantly underfunded as a result of bureaucratic ineptitude over a number of years; administrative costs have escalated; a reduction in work injuries as a result of the scheme is questionable; and any evidence of a real improvement in the rate of return to work by injured workers has not materialised.

I could not have said it better myself. We have an ageing population (and I look in the mirror often), and there will be an increased demand for aged care facilities in the not too distant future, and it is ever rising as we all know. The government needs to be supporting these facilities to continue and expand—not levying them out of existence. Some aged care facilities have indicated that the only way they will be able to cope with such hefty increases is to reduce the quality and level of services available to our elderly.

The Labor government should hang their head in shame; this is an absolute disgrace. Jobs will be lost because of the increasing financial burden aged care facilities have to meet, which increases the risk of further injuries to staff with increased workloads. I have written to the minister about this most serious issue but to date have not received a response.

I also understand the aged and community care association is working on this issue on behalf of the industry. I sincerely hope a solution can be found soon. Perhaps the industry needs to investigate a self-insurance scheme similar to the local government and move away from the WorkCover scheme altogether. The aged-care sector is paying for Labor's decade of mismanagement of the WorkCover scheme—$1.3 billion and counting. WorkCover under Labor is a debacle.

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