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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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WORKCOVER

Mr WILLIAMS (MacKillop) (15:00): My question again is to the Deputy Premier. Can the minister explain to the house why he has found it acceptable that the board continue to set the WorkCover average premium rate at 2.75 per cent in spite of actuarial advice to the board that the average premium rate would need to be at least 3.37 per cent to cover current costs of the scheme and that it has become obvious that the 2008 amendments have failed to deliver any cost reductions?

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Industrial Relations, Minister for Business Services and Consumers) (15:01): Again, I thank the honourable member for his question. I have been thinking there is something familiar about this. There is a deja vu moment here; something to do with estimates, I think. Anyway, that is fine. I am happy.

The situation in relation to the levy is this: the levy is set by the board. The board, I think, in their recent meeting where they set the levy, were mindful of the fact that there was a report produced by prudential regulators or prudential advisers to the effect that, if the scheme was going to have a positive return in terms of receipts from levy over any given 12-month period, there would need to be an increase in the levy rate to—I think the honourable member said it was three point something per cent.

The board formed the view that, because of the discussions that were being undertaken between the board and the government about changes to both the charter and the legislation, and because of changes they had made internally, they felt that they would have every capability of flattening out and stopping any further deterioration of the unfunded liability situation without increasing the levy. Accordingly, they chose not to increase the levy.

I can say that the actual figures demonstrate, at least for the last year, that there was a marginal improvement in WorkCover. I am not going to pretend that that was all attributable to management improvement, although I believe some would have been. It is no secret that the market performance over the last 12 months has been a little bit better than it was in the previous 12 months, and they are actually a large investor. Anyway, the point is that the scheme is not going backwards.

I am very confident that the measures that were put in place through the charter and the changes in management will have the effect of dampening any upward pressure on the levy and ultimately flatten it out. But I do say this—and I have made no secret about this before—if we are going to bring about a substantial change in the scheme, which includes real downward pressure on the levy, there has to be a root and branch reform of the act itself. The Premier and I have both said that many, many times. It is just that on one occasion I said that word, just once, and people paid attention. I have been saying different words to say the same thing—

An honourable member interjecting:

The Hon. J.R. RAU: The one with all the asterisks, I mean. I have been saying words similar to that for a very long time and it did not get much attention but, when I said that word that I cannot speak, people did pay attention, and I am not unhappy about that because we need to get some cut-through with this. I don't think there is much difference in that sense between what the people over there—members of the opposition, should I say—and this side in terms of having concerns about the scheme.

The difference is that this side of the house is committed to maintaining the scheme as a government-operated scheme and to be an efficient scheme, and those opposite have not closed the door on privatising the scheme. That is a point of difference. But, as to identifying that the scheme is not perfect, there is no contest.

The SPEAKER: The member for Schubert is called to order, and the members for Heysen and Hammond are warned for the second time. Supplementary from the member for Davenport.

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