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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
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WORKCOVER CORPORATION (GOVERNANCE) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 17 October 2013.)

The Hon. R.I. LUCAS (15:34): I rise to speak to the second reading of the WorkCover Corporation (Governance) Amendment Bill. I think the sad reality of WorkCover as a scheme—as the Hon. Mr Brokenshire indicated in his contribution during the last sitting week—is that we are confronted with a cot case. We have had almost 12 years of significant mismanagement by the Labor government and in more recent years, the Jay Weatherill Labor government. Mr Weatherill, of course, Mr President, as you know, has been a senior member of the Labor government since 2002, so he shares collective responsibility, and then as Premier in the last couple of years, key responsibility in terms of the tragedy of what is unfolding before South Australia as we speak.

It is hard to contemplate actually how bad a scheme we have. The scheme has the highest levy rate for employers of any scheme in the country. We have an unfunded liability of approximately $1.3 billion. Mr President, I remind you that in 2002, when Mr Weatherill first became a part of the government, the unfunded liability was less than $100 million, so it is a billion dollar blowout in unfunded liability under the 12 years of mismanagement by Labor governments. The funding ratio rate of the scheme, which obviously should be in and around 100 per cent, is now as low as 64 or 65 per cent.

What is even more tragic is that, as a workers compensation scheme, we have in South Australia the worst return-to-work rates of any equivalent scheme in the country. One could understand why the levy rates were almost double that of the average of other employers in other states in the country and our costs were extraordinarily high if we were delivering a Rolls Royce scheme in terms of both benefits to injured workers and, more importantly, for the benefit of early return to work for injured workers; then at least a Labor government could have some argument to justify the excessive costs in the scheme. But, what we have is the absolute mess of the highest costs in the nation for employers and for injured workers the worst return-to-work rates in the nation.

As the shadow treasurer highlighted in a recent public statement, we also have the highest number of disputes in the country, take the longest to resolve disputes, and spend three times the proportional cost on rehabilitation than any other scheme in the country. This does not all just happen. It takes a conscious effort by Labor governments over 12 years to create the cot case that we have before us. It takes Labor governments and Labor ministers, including the Hon. Mr Weatherill, to ignore the advice of stakeholders, commentators, experts and others who have criticised over a 12-year period the fundamentals of the scheme that the Labor government here has sought to impose on workers and employers.

From the very early days under minister Michael Wright and the Labor government, including the Hon. Mr Weatherill, we have had this policy which basically said they were not prepared to support redemptions, that in some way redemptions promoted what they referred to in a pejorative sense as a redemption culture, as something which was bad in the scheme. The government and the minister, via directions and other mechanisms, sought to impose over a period of years their ideological view that injured workers should not be given the option or should have it significantly restricted in terms of redemptions.

Amongst many other inquiries that have been commissioned by the government, the parliament itself has had at least two recent looks—and 'by recent' I mean over the last handful of years—at the WorkCover scheme. The Statutory Authorities Review Committee of the parliament, under the chairmanship at that stage, I think, of the Hon. Carmel Zollo, produced a report, tabled in February 2010, just prior to the 2010 election, after an inquiry running some two to three years. There has been significant work done by the Legislative Council committee on statutory authorities.

In more recent times, under the chairmanship of the member for Ashford, the occupational health and safety committee of the parliament has also looked at, in particular, rehabilitation and return-to-work rates in our scheme compared with other schemes. For those members who want to look at the mess that has been created by Labor governments in South Australia, I would suggest that they have a look at both of those reports.

Returning to the issue of redemptions, that first report highlighted the ideological position adopted by the Labor government in relation to redemptions over a period of time. Ultimately, we saw encapsulated in the 2008 WorkCover legislation, which went painstakingly through the parliament in that year and, I think, in 2009, major changes to the legislation with respect to further restrictions on redemptions. In essence, that was the pinnacle of the Labor government's attack on redemptions as part of a workers compensation scheme. In essence, their policy position was that they were virtually banned, except in supposedly extenuating or extraordinary circumstances.

Yet, five months before the election, we have not only this legislation but now—conversion on the road to Damascus almost—we hear from management and leadership within WorkCover and we hear from the minister the notion that we have to address the issue of whether this is a capped scheme or whether it is a pension scheme. Whilst it does not solely relate to the issue of redemptions, it significantly relates to that issue. After 12 years of pillorying the notion that redemptions be part of a scheme, we now have ministers and managers and others in leadership positions saying, 'Do we want a capped scheme or a pension scheme?' 'The problem with the WorkCover scheme is the long tail in the scheme.' 'The problem is the fact that it is a pension scheme.' 'The problem is that too many people are staying on the scheme for too long compared with other states.'

'Well, strike me pink!' to quote Ken Cunningham, they have actually woken up, supposedly after 12 years, to what people have been saying for years and years and years—to the deaf ears of the Premier, to the deaf ears of former minister Michael Wright and others—that one of the problems within the scheme in South Australia, one of the reasons for the extraordinary growth in the unfunded liability, was the long tail in the scheme, was the fact that it was a pension scheme, was the fact that injured workers who, if given the option of taking a package early enough, would have taken the package and gone about their life and returned to work in another role or another position or another job in another way, or gone about the rest of their life with a package to set themselves up.

But, no, the ideological position of the Jay Weatherill government and those who preceded it was that this was in some way to be pilloried, that this in some way was something that was wrong because it promoted a redemption culture in South Australia. They appointed people who had that view to do various reviews. The Stanley review supported the position that the Labor government wanted in relation to this. Various reviews appointed over the years supported what the government wanted to support, and that was a view that we should get rid of redemptions.

Now, a conversion on the road to Damascus: 12 years down the track and just before the state election, they want us to believe that they have the solution at last to the problems of the WorkCover scheme, that they and they alone know how they will fix it, and that we now need to address the issue of redemptions and whether or not this is a capped scheme or a pension scheme at all. I do not know how silly minister Rau, Mr Weatherill and the government think the people of South Australia are, or how silly they think the employers in South Australia are, or how silly they think the injured workers, who fought them for years in relation to this particular, are, but I assure them that they are not that silly, that they will not be fooled by this conversion on the road to Damascus, that after 12 years of mismanagement and after 12 years of ignoring the advice they have received, all of a sudden they have seen the light and they now know the solution to fixing WorkCover.

They went down the extraordinary path, which could only be of logic to a Jay Weatherill Labor government, or a Labor government of which Mr Weatherill was a significant part, and their fellow travellers, that in some way removing competition in the provision of multimillion dollar services was the best way to provide an efficient service and to reduce costs. One of the first decisions they took was to provide a monopoly contract to a claims management provider.

For illustrative purposes, I advise members to look at the 2007 to 2010 inquiry into WorkCover by the Statutory Authorities Review Committee, because this issue was canvassed intensively by that particular committee. We saw the extraordinarily inept decision by the government and the WorkCover board at the time to, in essence, convince themselves and try to convince the public that it made sense to have no competition at all in terms of claims management, and that in some way that would reduce costs.

Look at the Statutory Authorities Review Committee's report, in particular look at the position that was adopted by the Labor government members on that committee as opposed to the position adopted by Liberal members. I refer to the minority report by the Hon. Terry Stephens and me, signed in late 2009/early 2010. That particular report highlights that at the December 2008 meeting of the committee we first questioned WorkCover representatives about industry concerns that WorkCover was renegotiating a five-year monopoly claims management contract it had entered into with EML in 2006. We raised the concerns that the industry was buzzing with rumours that less than halfway through a five-year contract WorkCover and the government were renegotiating the terms of that monopoly deal with EML.

The minority report indicates our concerns about the evidence we received when we were told by WorkCover that EML would not receive windfall financial benefits from the government's 2008 legislative changes under the original contract. Then we took evidence from the most recent chair, Mr Bentley, who made clear that the earlier evidence given by the board chairman was not correct. We indicated that we strongly opposed the view that WorkCover should keep secret the details of potential multimillion dollar benefits to EML from the renegotiated contract.

The renegotiated contract was finally signed in April 2009. It was made retrospective to July 2008 and, in the first year under the renegotiated contract, which was 2008-09, EML received $48.9 million or an increase of $17.2 million over the 2007-08 payments. EML, as the monopoly claims provider, in my view, bid and bid low, undercut the market and then less than halfway through the contract—in the tradition of monopoly contracts having bid low—went back in and argued, 'We need to renegotiate this contract to better reflect our costs,' and managed to increase their total payments from 2007-08 to 2008-09 by $17.2 million. That is not a bad negotiation if you happen to be a monopoly claims provider in EML.

All through that period, we said to the Labor government members on the committee—the Hon. Carmel Zollo, I think the Hon. Ian Hunter was there at varying times and other members—that this stank, that this arrangement of having a monopoly claims provider made no sense at all. What you needed at the very least was some competition of a couple of claims providers so that you could not be held over the barrel as we believed the monopoly claims provider was holding WorkCover and the scheme over the barrel in relation to its operations.

But the government refused to listen. The Hon. Carmel Zollo and the other Labor members on the committee refused to listen. They followed the mantra of the Hon. Mr Weatherill and the Labor government at the time that a monopoly claims provider contract was the right way to go. It would save costs; it would deliver efficiencies. What do we know now? We now know that, years after having been advised, again the government changes its position and says, 'Okay, we now need to have more than one claims management provider,' and we now have the changes that have been implemented in the last 12 months where a second claims management provider has been introduced into the scheme.

How much money could we have saved if this decision had not been taken in the first place? How much more efficient could the scheme have been and how much better would the treatment of injured workers have been if there had actually been some competition between claims management providers? The Hon. Ms Bressington and myself and others took considerable evidence both within the committee and outside the committee from injured workers who were appalled at the treatment they had from case managers, caseworkers and others, in terms of the management of their claims. If you are the monopoly claims provider, where does the injured worker go? What is the alternative for an employer who wants to see a return-to-work scheme that works for them and their injured workers?

You have a monopoly provider who does not have to worry in relation to the standard and provision of the services that have been provided to the injured workers and to the employers. There is no competition in the marketplace at all in terms of efficient delivery of claims management services, and who suffers? The injured workers suffer through frustration and anger. We have all heard the stories of injured workers in tears with frustration at the responses they were getting from caseworkers, claims managers and others and how they were being treated.

We are all aware of the frustration and anger of employers who could see their costs going through the roof, could see their injured workers not being treated properly, and could see the mismanagement of the claims management process. The logic of that escapes me. Not only did they do it in the claims management area but they did it in the legal services provision as well. They made the extraordinary claim that they were going to save, I think, up to $30 million or something over five years or so through going to a monopoly legal services provider—the same logic again. Eventually, after years of seeing that that did not work, they should move to an alternative system.

There are so many examples of that. In the last couple of years during the period that I had responsibility for the portfolio, I spoke on any number of occasions to any number of groups indicating that, rather than just look at the 2008 amendments, what the government needed to do was to look at the structure of the board because the way the board was constructed was in itself part of the problem. We needed to learn the experiences of others such as the Victorian equivalent authority where people with commercial compensation and insurance business experience were the ones charged with the responsibility of managing the equivalent to WorkCover in Victoria. It just makes sense to anyone with any understanding of how you run a business.

The fact that it is a representative body (which was accepted at the time, I acknowledge) where every stakeholder group that could get a place in the sun was represented: the employers, the unions, and someone from a rehab background, etc. They all had their place on the WorkCover board and you put them all together to try and run the scheme. As I said, the reality is that for the last couple of years or so those of us on this side of the house have been loudly proclaiming that one of the things that needs to change and change quickly was to bring in a commercial board.

Again, five months before the election, conversion on the road to Damascus: the minister has rushed into the house and said, 'I hear you, I hear you. I am now going to institute a commercial board. What a good bloke am I? I've thought of this all on my own and this is now going to solve the problems of WorkCover.' The reality is that this change in and of itself will not solve the problems of workers compensation in South Australia or WorkCover but we certainly see it as an important part of the solution.

Members will be aware through the SARC inquiry and the occupational health and safety inquiry that one of the concerns that I have had in terms of this stakeholder group has been the significant issue raised by the rehabilitation industry particularly relating to perceptions of conflicts of interest in relation to arrangements on the board. The evidence in the WorkCover inquiry for SARC is littered with complaints from stakeholders indicating their concerns, in particular concerning companies associated with Sandra De Poi, a member of the WorkCover board, where the evidence on the record for that committee indicates their significant concerns.

Years later—last year and early this year—this report concluded that, when the occupational health and safety committee took further evidence on rehabilitation and return to work, various stakeholders from the rehabilitation industry continued to indicate their concerns at the position of Sandra De Poi on the board and the perception of conflict in terms of her position on the board and as a rehabilitation services provider.

In the period from 2007-09 when the first inquiry was held to 2012-13 when the second inquiry was held, the concerns expressed by those in the rehabilitation industry had not dissipated at all. It is interesting to note just going through the Auditor-General's reports that up until Ms De Poi resigned from the board in January of this year, the companies associated with Ms De Poi had received over $33 million in contracts from WorkCover for rehabilitation services and medical expert services—$33 million-plus in contracts. To be fair to Ms De Poi's companies, the Auditor-General notes that the terms of those contracts (I think these are the words the Auditor-General uses) were 'no more generous', or words to that effect, than other companies in the field.

That, of course, is not the complaint that the competitors of Ms De Poi raised in both the committee inquiries. The concerns they raised were not the terms and conditions of the contracts vis-a-vis her other competitors: the concerns they raised were, from their viewpoint, the excessive number and value of contracts that Ms De Poi's companies received compared to others within the industry. Some rehabilitation providers who many stakeholders said had provided exceptional services to injured workers eventually found themselves forced out of business because they were not receiving rehabilitation services contracts via the then monopoly claims manager in EML. I have spoken before about, and raised in the select committee, issues in relation to connections—or linkages or relationships, perhaps—between Ms De Poi and senior people with influence within EML (the monopoly claims provider) at the time.

This is one of the concerns in relation to a board as it was previously constituted, that is, being comprised of stakeholders, for example, with very significant contracts. We have board minutes and subcommittee minutes through FOI. Again, to be fair to Ms De Poi, in relation to the most obvious issues before the board that would be a conflict, she absented herself from those particular meetings, and that was an appropriate part of the process. However, there are certainly other items on the agenda (and we were unable to get, under FOI, all the detailed board papers) which potentially, clearly, if you were a board member, would place you in an advantageous position in terms of knowledge of the future directions and planning of WorkCover and a series of discussions about five-year plans for WorkCover in the future.

That sort of information, to someone within the industry, whilst it did not directly relate to rehabilitation services contracts, in my view, would place you in an advantageous position compared to competitors. I guess from that viewpoint, my view is not the most important aspect of this. That was certainly the view of many of her competitors, that they believed access to that sort of general directional information on the WorkCover board and its committees placed her in an advantageous position when compared to rivals in that area.

For all those reasons, a central principle of this bill, which is to bring in a commercial board, is one which we support and one we have been supporting for a couple of years now. It does not mean that stakeholders such as employers, employee associations and rehabilitation service providers could not and should not have an appropriate role in providing advice to both management and the board of WorkCover.

There are any number of models where advisory committees or stakeholder forums could be used by the chief executive of WorkCover or, indeed, the board (if it wanted) of WorkCover or, indeed, the minister, or any combination of the above, in terms of ensuring that employers, employees, rehabilitation service providers, and others, have an opportunity to put a point of view on the future directions of WorkCover in South Australia.

So I want to put that on the record and indicate that the Liberal Party's support for a commercial board should not be taken as a position which indicates that employers, employees and other important stakeholders should not have the opportunity to provide advice and input in terms of future directions of worker's compensation in South Australia.

Concluding, I indicate that there is not unanimity of agreement in relation to this bill from all stakeholders. There are some who are still concerned at the potential impact of the bill. The government at one stage tabled an amendment to the bill in response, as they saw it, to some of these concerns. As of the last 24 hours we have been advised the government is no longer going to proceed with their amendment and will go ahead with the bill as it is. What we should indicate is that, as I said, there isn't unanimity of view out there that this is a good bill, that it should be supported. The majority view that has been put to the Liberal Party, I am advised, is to support the bill as it is, but there are important stakeholders who continue to express concern and would have liked to have seen further amendment by the government or the parliament to provisions in the legislation.

In response to those concerns, I say to those who express those continuing concerns that there are those of us in the Liberal Party who hear their concerns. We are certainly aware of those concerns. It is our view that post March 2014 whether it is a re-elected Labor government or a newly elected Liberal government this particular bill will not be the end of trying to fix the problems of WorkCover. I think minister Rau has already indicated that he is engaged in further consideration of further amendments to workers compensation legislation. From the Liberal Party viewpoint, whilst we will be mindful of what the Labor government suggests, I guess we will be wary on the basis that 12 years of their changes have only made the scheme much worse from every perspective.

If a newly elected Liberal government is there, there is likely to be consideration of further change. As I understand, WorkCover management in recent months has taken on a new look in the senior positions, not just in the chief executive position but in other senior management positions. People with experience of schemes which work more successfully in some of the eastern states have been brought on board and there is an active debate going on in relation to future direction of the scheme post March 2014 from injured workers' viewpoint and from employers' viewpoint. We can only hope that whoever is in government post March 2014 will start to make some of the necessary changes to fix the cot case or the mess that currently confronts injured workers and employers in South Australia after 12 years of mismanagement by the Labor government.

The Hon. T.A. FRANKS (16:09): I rise to put forward the Greens' position on the WorkCover Corporation (Governance) Amendment Bill 2013. This bill, as outlined, amends the WorkCover Corporation Act 1994. The Greens oppose this bill on the principle that, while it is a move from a representative structure of a governance board of WorkCover to a commercial board, we do so knowing that our voice will be in the minority on this but voicing that this WorkCover system is broken and this bill does very little to fix it. It is with great disappointment that we see this piece of legislation rushed before the parliament in terms that minister Rau can appoint a new board as of the expiration of the chair's position on 31 October without more wholesale reform of the WorkCover system.

This legislation is a very small part and certainly not the solution to fix WorkCover's problems. I think rather than a bill that tinkers around the edges, it would have been far more gratifying to have had a proper review of the WorkCover system within this term of government, debating reforms that would impact on the lives of injured workers and addressing the unfunded liability and other systemic issues that so plague the WorkCover system in our state.

The Greens are not convinced that this bill is therefore worth supporting or indeed the right step forward because it gives some false hope to people. Certainly it would be portrayed by the government as a great step forward, but we think it is possibly one step forward, two steps back because it is a missed opportunity.

The Greens also strongly oppose the removal of existing rehabilitation and occupational health and safety representatives from the board. We believe that the minister is undermining the knowledge and expertise that an experienced health and safety practitioner can bring to the board. Indeed, the Greens also oppose the reduction of the board's membership from nine to seven members and express our concern that the bill lacks clarity and transparency because the bill ensures that the act does not need to specify particular qualifications or criteria for membership of its board. This is a significant concern as it will be up to the minister's opinion about who should sit on the board.

You can have commercial boards but you can specify the type of qualification and the type of expertise that should be brought to the fore on that board. Certainly the parliament is missing an opportunity with this piece of legislation to ensure that that happens and that it is not left to a particular individual minister's opinion or whim, or indeed as we have seen in the past, the payback of political favours which can be exercised in the appointment of those on boards who perhaps should not be there. Certainly without that safeguard of at least ensuring that people are chosen with regard to their skills and expertise, we think it removes that particular safeguard on the behaviour of ministers. I do not slight any particular minister. I hope we would not have cause to bemoan the lack of those particular criteria being put in the legislation but I am certainly a cynic when it comes to these sorts of appointments to boards. I think it is far too important to be left to the individual minister in that case.

A minister's opinion should get some guidance from this parliament, and it is certainly a sad day to have seen this piece of legislation rushed before this place and proclaimed to be a great step forward. Indeed, the speech that minister Rau made in support of the bill in the other place gives rise to some concern. As he said, and I quote, 'It should as much as possible mimic the structure of a board that you might have for the ANZ Bank.' Well, we are not talking about a bank board: we are talking about injured workers and employers and we are also talking about a particular scheme that has been quite a challenge for this particular government and also controversial within this parliament. I think it deserves more respect than to be seen as simply just another board.

If you were running the car industry, you would have people on those boards who have the relevant skills and expertise to that particular industry. It is the same with WorkCover; we should be ensuring that we are picking a board that has the skills and expertise required. The minister has, I believe, marginalised the trade union movement with this bill and, coming from a Labor government, that is quite remarkable.

The Greens also oppose the amendment of section 6, which goes to the conditions of membership. The bill states that under this particular section it is possible to remove a member of the board from office on the recommendation of the minister on any other ground that the minister considers to constitute a reasonable cause. This is an unnecessary amendment because, under the current act, the minister does indeed have the power to give the board direction and guidance if the board is not performing. The minister also has the WorkCover charter for guidance.

We share some concerns that others have expressed regarding the precedent of this language. Certainly, we look and would recommend that the minister look to other jurisdictions, such as Tasmania and Western Australia, that do have representative frameworks for their boards, and certainly Canada has such a situation.

For those particular reasons the Greens will not be supporting this bill. We do not seek to divide on it. We recognise that the debate on this issue will not be covered within this bill and, in fact, that is the very problem we wish to raise by indicating our opposition to this bill. As I indicated at the beginning, the WorkCover system is indeed broken. This bill will not fix it.

The Hon. J.A. DARLEY (16:15): I rise to speak on the WorkCover Corporation (Governance) Amendment Bill 2013. In the previous sitting week, we were all urged to support a bill that had only been introduced two days prior. It should have come as no surprise to the government that this chamber would not agree to that proposal.

We have had a week now to digest what the government is proposing; that is, we pass a bill that has the sole purpose of replacing the representative board concept with a commercial board concept and ensuring that the chief executive officer is reasonably available to the minister, both in terms of assisting him or her in the administration of the act, and in terms of complying with any reasonable request by the minister to provide information about the operation of administration of the act. In March 2006, the WorkCover Corporation issued a press release stating:

We are confident we have the right settings in place to achieve improved service and results in coming years for injured workers and employers who fund the scheme and we remain on target to achieve full funding by 2012-2013.

Clearly, they were wrong, so much so that in 2008 we were presented once again with a bill that was going to revolutionise the WorkCover scheme and get things back on track once and for all. By that time, the unfunded liability had spiralled out of control to the tune of $1 billion.

During the debate, the crossbenchers of this parliament urged the government to consider changes to the WorkCover bill. We all emphasised very loudly and very strongly our opposition to the government's proposals. We knew that the government's proposal was flawed. The experts we spoke to knew the government's proposal was flawed. From memory, something like 250 amendments were proposed and all but one of them were rejected by the government.

At the time, I recall moving a sunset clause amendment that would enable parliament to track the progress of the legislative changes that were made and require the government to take further legislative action as necessary. Reading through earlier contributions I have made on this issue, I warned that without such a clause we would be back here in two years' time debating the same issues. The government rejected that proposal as well. It has taken a little longer than I anticipated at the time, but here we are, five years later, trying once again to salvage what we can from a broken scheme.

During the subsequent debate on the WorkCover Corporation (Governance Review) Amendment Bill, I moved a further amendment aimed at changing the structure of WorkCover's management board, from one of stakeholder representation to expert representation. It was clear even then that there were more far-reaching problems with the WorkCover scheme that legislative reforms alone would not address and that WorkCover lacked the organisational capacity and leadership required to tackle the scheme's challenges.

The government was urged to address these underlying issues, starting with the constitution of the board itself. I must admit that at the time the Hon. Robert Lawson had me sitting on the edge of my seat thinking that the opposition may actually support that move, but the amendment was ultimately defeated.

There is absolutely no question that the WorkCover scheme has been an abject failure, and that this government should hang its head in shame for letting it get to this point. We now have an unfunded liability of some $1.3 billion. We have employers being driven to the wall because they cannot afford the exorbitant premiums they are required to pay. We have one of the worst return-to-work rates in the nation. We have workers who are substantially worse off prior to becoming injured. The Attorney himself has come out publicly and described the system as 'buggered'. At the same time, the Attorney is asking us to trust the government once again—that this bill is the first of a series of steps aimed at fixing the scheme.

None of us knows what the other changes will entail. We do not know whether there is a draft bill, we do not know whether the government proposes to make further changes before the March election. All we know is that this is supposed to be the first phase of a project that will ultimately entail a root and branch reconsideration of the scheme. It is not expected to result in any dramatic improvement to the scheme, but it is intended to prevent any further deterioration.

I know that I am not the only one who finds it extremely difficult to trust the government, particularly when it comes to the welfare of injured workers. Their track record is appalling. That said, I understand that the government has the support to get this bill passed this week. Clearly, there is no time for a detailed WorkCover debate. However, like the Hon. Robert Brokenshire, I think that the government needs to be a bit more up-front about what it is proposing and the time frames for these proposals. In particular, I would like some further clarification on the in-house amendment that is being proposed by the minister.

During the Attorney's second reading speech, he cautioned the opposition very strongly against amending the bill to provide for any formal criteria for board members, suggesting that this would result in the exact opposite of what the government was trying to achieve through the bill. That being the case, I would like an explanation as to why it is that the government has now proposed that we insert a provision which appears to offer some sort of guidance in terms of the areas of expertise for board members.

Based on the consultation I have undertaken in the past week, there certainly appears to be some concern amongst those who specialise in the WorkCover area that this new provision has the potential to achieve precisely what the Attorney was trying to avoid insofar as it relates to stakeholder appointments. The insertion of workplace relations is one of the areas of expertise that has been highlighted as particularly concerning in this context.

In a nutshell, the concern is that this has been included to appease the concerns of union representatives and to ensure that they can still earn a place on the board. Unless the minister can provide me with some good reasons for this amendment, I will be seeking, at the very least, to have the reference to workplace relations deleted from the proposed amendment. I do have an amendment to that effect already drafted.

The Hon. A. BRESSINGTON (16:23): I also rise to speak to WorkCover Corporation (Governance) Amendment Bill 2013. I will state from the very beginning of my contribution that I also oppose this bill on principle as well as on content. I do not believe that this bill will deliver any more justice to injured workers than we already have.

I concur with everything the Hon. Rob Lucas said about the evidence we received on the Statutory Authorities Review Committee about this not only broken but corrupt system. It was not a pretty sight. During the course of that inquiry, it seemed to me that there was literally nobody, except, of course, some members of the board, who thought everything was cruising okay.

I am not going to go back and lament over the debate in 2008, but I will make a couple of points that have stuck in my head for five years. That was probably my baptism of fire in this place, the WorkCover debate—that is, realising how little people do care about the outcomes for injured workers, be they people of the Labor movement or the Liberal Party. Injured workers, and the outcomes for them, their quality of life and their right to exist well rarely seem to come into the debate when we are talking about reform to WorkCover. It is always about the bottom line, it is always about the cost to employers, it is always about employers not being able to afford the levies.

Rarely do we want to talk about or even put on the record stories about injured workers committing suicide because they are harassed, bullied, intimidated, threatened, or dragged through years and years and years of litigation rather than get what they are rightfully entitled to. We do not talk about the fact that WorkCover Corporation would prefer to spend maybe millions of dollars on a case—we will take Alex Mericka, for example—in the WorkCover tribunal rather than actually review this man's case and do what is right and save themselves the time, the money and the energy and deliver an outcome and get somebody the justice they deserve.

Mr Mericka (and I will use him as a prime example—he is not the only one, not by a long stretch of the imagination) has spent more than one and a half decades in the tribunal over a case that has implicated our Premier up to the eyeballs for unprofessional conduct, for signing off on a redemption agreement when he was not even the representative lawyer of Mr Mericka. We now have Mr Rau in the media saying that the system is buggered and that we have to do something about this, but will he give a tick to the charges being heard by the Legal Practitioners Disciplinary Tribunal against our Premier so that that particular case can proceed? Oh, God no! He won't even meet with the injured worker to discuss these matters.

I have the correspondence between the Attorney-General and Mr Mericka and it is pathetic, to tell you the truth. Ask a question one way, get a response from Mr Mericka, so ask the same question a different way, and on and on we go—anything other than acknowledge that it is perhaps necessary for the Premier to be able to go before the tribunal, have his case stated and give the opportunity for him to respond to that. But that probably would not be politically correct just before an election was to occur. So, excuse my cynicism about the motivation behind this.

In fact, on the Leon Byner show a couple of days ago, last week, Mr Rau was ever so accommodating, saying that 'the point is that the scheme has failed everybody, no point in me gilding the lily or not being frank with people about it'. He said that the scheme has failed employers, it has failed employees. Well, the one group of people the scheme has not failed is the legal profession. It has done very nicely out of this, thank you very much, and that is the shame of all of this.

I remember in the 2008 so-called debate—again deja vu, get it in, get it done, get it over and done with, push it through, rubberstamp it, let's not waste time on this, just get it over and done with. In that debate I remember the unions screaming out for the whole WorkCover system to be returned to common law, and that was their hue and cry: get it back to common law and allow injured workers to pursue damages if it can be proven that an employer has not complied with workplace safety, that an employer may have ignored warnings about unsafe workplaces.

The government argued against that. It argued against every suggestion that was put forward and stood by the draconian laws that it passed, and the opposition supported it. We were on a very tight time line and it had to be done by Thursday night. It all had to be over and done with.

Over the last five years, I have spent quite a bit of time speaking with legal practitioners from Queensland. There is no system that is perfect, and I get that, but in Queensland it is not an adversarial system as such. I have sat with a couple of barristers around a table and they have proposed a model that I have to say, to me, as a non-corporate person—someone who does not really give a crap about only the bottom line—makes more sense than anything that I have ever heard either of the major parties put forward. That is, give the tribunal some teeth. Make it a court of common law. Have a jury of 12 to hear the facts of the case. Have employees contribute to a fund for lost wages; have an employer contribute to a fund as a WorkCover levy.

If it is proven that an employer has been negligent, it can be pursued for damages in the WorkCover tribunal and a common law decision can be made and damages awarded. If it is proven that the injured worker failed to comply with workplace practice or ignored instructions on matters of safety, they call on the fund that they have been paying into to pay their wages, or part thereof, until they are able to return to work. We talk about the WorkCover act as if it is a compensation and rehabilitation act, or aspires to be, but it is actually not. It is legislation that covers the backside of a corporation that conducts itself very poorly and in some cases, I would even go so far as to say, in a criminal manner.

Apart from Mr Mericka, I have another case where Mr Bentley of the WorkCover board is on the record saying to the presiding member of the WorkCover tribunal, '...you know as well as I do that you are powerless to instruct this corporation to do anything, and if we lose this matter, we will simply appeal.' From Mr Bentley's mouth—the chairman, I believe, of the board of WorkCover—words to the effect that, 'It really doesn't matter if this man lives or dies. That is not the point that we're arguing here.' He is talking about an injured worker as if he were a piece of meat.

Does anybody honestly believe that the changes that the Attorney-General has proposed about the reduction in the number of the board or the composition of the board is going to change this culture within WorkCover—that injured workers are nothing more than pieces of meat? When somebody becomes an unproductive unit of the corporation, we tend to throw them on the scrapheap. There are a million things wrong not only with this scheme but with the accountability level of WorkCover, the conduct of WorkCover, even the lawfulness of what they do and how they do it—the number of times that they can appeal one particular case.

I would go so far as to say that in the future we should consider legislation against WorkCover or for WorkCover itself to comply with that of the criminal code that passed this place for the rights to appeal act. In fact, WorkCover should be limited to when it can appeal a case that it loses based only on fresh and compelling evidence, not on a point of law, but on fresh and compelling evidence—new evidence that has come to light that the injured worker has deceived the tribunal or deceived the corporation. It should not be based on a crummy point of law where we have our Premier on charges before the legal practitioners tribunal for unlawful professional misconduct, signing off on a contract when he was not representing that particular injured worker.

It is 'anything goes' with this scheme, with the corporation, and that is what has to change. The corporation must be made accountable for its attitude towards injured workers. It must be made accountable for its conduct towards injured workers. When an injured worker is genuinely injured at work through no fault of his own, he should be entitled to access medical treatment and rehabilitation for as long as it takes for him to return to a certain standard or quality of life where he can go back and do a more menial task or a less demanding job within the business, or get another job with another business, or just move on with his life.

I work a lot with Rosemary McKenzie-Ferguson from Work Injured Resource Connection, and I have found myself over the last 2½ years funding Bags of Love—food parcels for injured workers who cannot afford to buy food to put on the table. How sad is that? These people are in pain, they are on medication, their lives have gone to crap through no fault of their own, and they cannot even afford to eat.

This winter, I had to pay for a load of firewood for Alex Mericka—a man who is permanently incapacitated and whose wellbeing depends on him being able to keep warm because his body aches from neck to toe and he shakes convulsively all the time. He and his wife were huddling up under a blanket, with the dog in the middle of them, to keep themselves warm because they could not afford even a load of firewood. This is a man who was living on instant noodles and bread.

We should hang our head in absolute shame that we stand here and debate the least important issues that need to be dealt with when we are talking about injured workers because none of what I have heard, as the Hon. Tammy Franks has said, is going to fix this or make one iota of difference to injured workers. I believe that someone like Mr Bentley who has said those words in the WorkCover tribunal should have been immediately sacked for expressing that level of contempt—that it does not matter whether this man lives or dies. That is not the issue we are discussing here.

I think we should be ashamed that we have set up a system where the tribunal cannot instruct and enforce actions to be taken by the corporation to ensure that injured workers get what they deserve, and I believe that their right to appeal should be limited and common law apply. Until those things are enacted, until we start to think of this as a humanitarian program, which is what it should be, rather than an economic exercise, then you guys will be back in 2016—I won't be back—doing it all over again, and good luck to you all. I hope all the people who were involved in the 2008 debate now sit back and look at the harm and the loss that was caused to many people through that piece of legislation. They are now prepared to sit in this place and waste our time and energy on debating yet another useless bill.

Mr Rau, the Attorney-General, on radio last week made it sound like this whole scheme was going to be overturned and the whole thing was going to be reformed and an exciting new WorkCover scheme would come out of this. He was going to decommission the scheme. Anybody out there listening who had not seen the crappy piece of legislation we have in front of us would have been getting really excited about that. But what does it really mean? Not too much, really. It is a good sound bite, just like last time, and a good thing to promote just before an election. We are in an election cycle, obviously, so let's build up people's hopes and then, when it really comes to the crunch, kick them in the guts yet again.

As I said, I oppose it. I will not be participating any further in the debate. I am not going to waste my time on this, and I am certainly not going to give it any oxygen or space in my head because it is not deserving of it. I hope that some in here will actually give some thought to that and maybe go back to their party rooms and take the opportunity to do something meaningful for injured workers.

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (16:42): I thank honourable members for their consideration of this reform of WorkCover governance. An effective workers compensation scheme is an essential part of our modern economy where there are protections for workers who are injured in the workplace and employers contribute according to their industry and workplace risk. While the current WorkCover scheme is effective in compensating workers with very serious injuries, as well as those 86 per cent of claims that are resolved inside three months, its real challenges are the remaining 11 per cent, which is responsible for so much of the unfunded liability and resultant business costs.

Clearly, more needs to be done to improve the scheme for both workers and employers. This bill takes a first step in addressing the governance of the WorkCover Corporation. The primary goal of the bill is to ensure that the WorkCover board is a commercial board, united through a business focus. Streamlining the board by reducing its size from nine to seven members and increasing board membership accountability by enabling the minister to recommend the removal of a board member for any reasonable cause are also important steps.

Other key changes within the bill are bringing WorkCover more closely in line with other public corporations by applying sections 7 and 8 of the Public Corporations Act 1993 and requiring the board to ensure that WorkCover's chief executive officer is available to the minister to enable closer ministerial scrutiny of WorkCover's operations. This will also assist in providing the government with greater oversight and control over WorkCover. In conjunction with the recently reviewed WorkCover Corporation Charter and WorkCover Performance Statement, this bill represents the necessary steps in improving WorkCover for workers and businesses in this state.

In response to Mr Darley's question on the government's amendment, I can advise that the government will not be proceeding with its amendment. I commend the bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: Is it the government's intention to both gazette and announce the appointment of the new chair and board members on Thursday of this week should the legislation pass the parliament today?

The Hon. I.K. HUNTER: I don't have access to that advice.

The Hon. R.I. LUCAS: I think it is important that the parliament before it passes the legislation is aware of the government's intentions—that is, we are not left in a position where WorkCover does not have a chair and a board. Can the minister confirm that the current appointments expire on 31 October?

The Hon. I.K. HUNTER: My advice is that new board members will need to be appointed by the Governor on the recommendation of the minister, via cabinet of course. Corresponding transitional provisions in schedule 1 provide for existing board members to continue until the commencement of the transitional provision. This clause, as well as clause 7 in schedule 1(1), may need to be proclaimed separately from the rest of the amendment bill at the time that the Governor is asked to approve the appointment of a new board. I understand all positions expire on Thursday bar one member.

The Hon. R.I. LUCAS: Can the minister indicate which board appointment does not expire on 31 October?

The Hon. I.K. HUNTER: All board member positions will expire on Thursday except for board member White.

The Hon. R.I. LUCAS: Can the minister indicate regarding board member White? When does his or her term expire?

The Hon. I.K. HUNTER: My advice is the end of November.

The Hon. R.I. LUCAS: Can I clarify the import of what the minister responded to my initial question? Is the minister suggesting that, whilst the board members' positions (other than member White) expire on 31 October, the transitional provisions are such that all of those board members will continue in office as board members and chair of WorkCover with all the authority of board members and chair of WorkCover until some later stage when the government takes whatever action required to action the appointment of new board members?

The Hon. I.K. HUNTER: I might need to take that on a very short period of notice. I am asking for some further advice on that to bring back an answer for the honourable member.

The Hon. R.I. LUCAS: I am happy to put a series of questions on which the minister might want to take advice, rather than have him go back each time and check. What we have been advised as members is that the urgency of this is that the board expires on 31 October and that action needs to be taken by the parliament to pass the legislation this week to, in essence, allow the appointment of a new chair and new board members. I must admit that I had not appreciated that one member of the board (board member White) is not covered by that. He or she has a term that does not expire until the end of November, so we can put that person to the side for the moment.

Our understanding was that we needed to debate this matter urgently this week to allow that to occur. We assumed that the current board terms would expire on 31 October and that the government had an executive council on Thursday (or it could have a special one on Friday, but it makes sense to do it on Thursday) to appoint a new chair and new board members as from midnight Thursday, the appointments commencing on 1 November, with the exception of board member White, I assume. I suppose my question is: what is the government's intention in relation to board member White?

If the minister is saying that his advice is that there is a transitional provision which in essence allows these board members—other than board member White—to continue in office for a period of time before the government takes the action that has been authorised by this act, the obvious question is: for how long? Does this transitional provision allow the government to go for one week, one month, three months or six months?

Just having a quick look at the transitional provision—the only one I can see is schedule 1—there does not appear to be a time limit on that. So, if that is what is being used to allow the flexibility that the minister is talking about, then it would seem to be indeterminate. Those are the series of questions: how this transitional provision would operate and what the government's intentions are in terms of appointing a new chair and a new board.

As I said, I think the impression given to all of us is that, come Friday, we would have the name of a new chair and new board members taking WorkCover off in a bold new direction. If that is not going to be the case then I think members in this chamber would certainly be interested in knowing why it is not going to be the case and, in those circumstances, when the minister and the government intends for those changes to be announced and to occur.

The Hon. I.K. HUNTER: Let me attempt this. The government's preference would be to announce on Thursday or Friday but, if necessary—and I have to emphasise that we would prefer to avoid this scenario—the board could delegate to the CEO and member White its decision-making powers but, as I said, our preference is to avoid that and to have the board appointed very soon.

The Hon. R.I. LUCAS: The minister's advice is that, although not preferred, there is the legal power in certain circumstances for the current board before it expires to, in essence, authorise or delegate remaining board member White as the sole chair and board member of WorkCover together with the chief executive officer. Can I just clarify: is the minister's advice that the chief executive officer would take on a board member's position? I suspect that is not what he is saying. I suspect the minister is saying, in essence, board member White would become 'the board' and in certain cases the current board could delegate the CEO to do certain things and either the current board would delegate to the CEO or board member White, sitting as the sole representative of the WorkCover board, would delegate to the CEO certain powers and authorities until the government could appoint the new board.

The Hon. I.K. HUNTER: My advice is that the WorkCover board believes it has the ability to delegate its powers to the continuing board member White. Clearly, there will be no quorum met, so it is our very strongly preferred position that we do not get into that position and that, in fact, we are in a position to announce the board and have it appointed by the Governor.

The Hon. R.I. LUCAS: It does raise a whole series of questions which I will not delay proceedings with like: will board member White be paid the chairman's position for one day? I will not delay the proceedings by asking those questions. It would seem to make sense, which is what we were led to believe, that the government would be in a position on Thursday at the normal Executive Council to gazette a new chair and new board members, and clearly these questions would indicate it would certainly be much easier from everybody's viewpoint if that was, in fact, to occur.

The minister has just said that his advice is that the board could delegate to board member White various powers and the CEO would obviously continue to have his current powers, but I am assuming the minister is now clarifying that it is not possible under the transitional provisions for the existing board members to continue for a period of time? To me it would seem logical that the only way current board members could continue for a period of time would be if the Governor and Executive Council appointed them for a short extension period of a week or a month or whatever it might happen to be, with all the possible legal difficulties that might entail. I want to clarify that the minister's advice to the committee now is that the transitional provisions do not allow the current board to continue in office beyond 31 October for a transitional period.

The Hon. I.K. HUNTER: My advice is that the legislation before us does not give us the power to extend a board member's appointment; the Governor would have to reappoint a member.

The Hon. R.I. LUCAS: I am thankful that, after a long confab with parliamentary counsel, parliamentary counsel's understanding and mine coincide. I have no further questions.

The Hon. R.L. BROKENSHIRE: I have a question for the minister regarding appointment of the new board and future boards. It is very relevant; it is the only question I have. What guarantees and what processes does the government have in place to ensure that not only this government but future governments do not make political appointments to the board and that the board will be full of the best possible people to fix the problems with WorkCover, based on the fact that political appointments in the past have done nothing but destroy the whole structure of WorkCover, including having a record unfunded liability? What guarantees can the minister give that board members will be appointed on merit and not appointed as mates?

The Hon. I.K. HUNTER: I just do not know where to go with that one. To an extent, all appointments are political appointments: they are made by cabinet and they always will be. The honourable member can take some comfort from the fact that our decision is actually to move the board to a more commercial operation.

Clause passed.

Clauses 2 to 4 passed.

Clause 5.

The Hon. I.K. HUNTER: My advice is that the government is withdrawing its amendments.

Clause passed.

Remaining clauses (6 to 12), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (17:07): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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