Bills

Return to Work Bill

Second Reading

Adjourned debate on second reading.

(Continued from 14 October 2014.)

The Hon. G.A. KANDELAARS (15:28): I joined the Postal Telecommunications Technicians Association (now the CEPU) as a teenager over 40 years ago. I joined the Australian Labor Party in 1978. These two organisations and the labour movement together helped to represent a part of my DNA. I lived and breathed the fabric of these organisations for nearly all of my adult life. I said in my first speech to this place that I do not consider being a union member a flaw, but rather something of great strength. I said in my first speech that I think it is a great strength to be part of the union movement and the labour movement. It is no surprise that I still think that way today.

Today, as a member of the union movement and a member of this council, I am able to stand here and comment through experience on a bill that will have an enormous impact on working South Australians. I believe that the Return to Work Bill 2014 will provide a better outcome for workers than the existing scheme through the Workers Compensation and Rehabilitation Act 1996. I do have trepidation about the bill. I have to be honest about that—

Members interjecting:

The Hon. G.A. KANDELAARS: Yes, I do. Of course, I do have concerns that as many as 6 per cent of workers may not be better off. They may fall through the cracks. However, taking all things into consideration, I genuinely believe that this bill should be passed. I stand here as a member of the government and a member of my union, the CEPU, and support this bill.

It is obvious that the current WorkCover scheme established through the Workers Compensation and Rehabilitation Act 1996 is broken. I believe that the Minister for Industrial Relations has previously used the technical term 'buggered'. If it does not work for workers, it does not work for employers. It is common knowledge that, unfortunately, under the current scheme, South Australian workers experience the worst return-to-work outcomes than in any other jurisdiction. Often the services provided to them do not support early and effective recovery and return to work.

South Australia's return-to-work rate is below that of all other states and for years has been below the national average. This is the worst possible outcome for injured workers. The bill before us today seeks to fix this, and for that reason alone it has my support. The focus of the bill is unashamedly on getting injured workers back to work. The WorkCover scheme must be about supporting injured workers returning to work.

As a union official I have seen firsthand the devastation that workplace injuries can have on workers and their families. I have also seen that this devastation can be short lived. A worker who is given the right treatment and support and who returns to work will be in a better position than a worker who has not had the right treatment. This provides a light at the end of the tunnel, where people can return to their lives.

There are workers who are not so lucky, who do not receive the right treatment and support, who do not return to work, and unfortunately, under the current scheme, that occurs too much. I have been in a position where I have had to represent these people. As time passes and the longer these workers remain out of work, the light is being switched off. They become trapped in a system and often trapped by the secondary mental health issues.

Imagine for a moment the feeling of being like a hamster on a wheel, unable to step off. This is what many workers feel under the current system. I have lost count of the number of times that I have received calls late at night or a visit at home from members who are in that position. They are seeking counselling as much as anything else. It is heartbreaking to witness and it has often left me feeling helpless. I have spent my life trying to assist these workers. I am entirely confident that the focus when drafting this bill has been on workers.

One aspect of the bill which I am particularly pleased with is section 18. If a worker is required to return to work, then it is incumbent upon an employer to accept that worker back. Section 18 provides that it is an employer's duty to provide work where an injured worker is able to return to work. Where a worker has been incapacitated for work as a result of a work injury but is able to return to work (whether full-time or part-time or whether or not to his or her previous employment), the pre-injury employer must provide employment for the worker for which the worker is fit and, so far as reasonably practicable, the same or equivalent to the employment which the worker was doing immediately before his or her injury.

If the worker, in seeking employment, provides a written notice to his or her employer that he or she is willing and ready and able to return to work with the employer, then the employer must provide suitable employment within a reasonable timeframe. If the employer fails to do so, the worker may apply to the tribunal for an order that the employer provide employment to the worker. Importantly, although an employer is not required to provide employment should it not be reasonably practicable to do so, the onus of establishing the fact lies with the employer. This bill also provides a number of improvements to the current scheme of injured workers, including:

the restoration of payments during disputes;

improved strategies to equip workers who may not be in a position to return to their pre-injury employment to better compete for work in the open labour market;

targeted return-to-work services as opposed to a one-size-fits-all approach;

the creation of an employment facilitation fund to assist workers to develop skills, knowledge, capacity and capabilities that will enable them to transition to other work; and

a dispute resolution process which will increase the speed at which disputes are heard and determined.

The scheme proposed by this bill will see 94 per cent receive the same or better support, and the reasons for this are simple. Close to 94 per cent of workers are off the scheme within two years. Unlike the current scheme, though, the bill provides that there will be no step-down in weekly payments for the first 52 weeks and a step-down of 20 per cent for the second 52 weeks.

The fact of the matter is that 94 per cent of workers will be better off under this scheme within those two years. During those two years, they will be receiving the same or higher weekly payments than they would currently receive. Likewise, the bill provides that injured workers cannot be paid below the federal minimum wage, regardless of any step-down. Of course, I would prefer to stand here and say that 100 per cent of workers will be better off, but improvements for 84 per cent of workers is a pretty good outcome. If we sit around and wait for absolute perfection, though, this change will never occur.

As well as being better for the majority of workers, it is also true that the bill is good for employers—it has to be. For the WorkCover system to work, it needs to offer something to both workers and employers. Employers in this state pay much more than in other jurisdictions. We have the highest average premium at about double the rate of other jurisdictions. South Australia's average premium rate of 2.75 per cent for the 2014-15 financial year compares with 1.47 per cent in New South Wales, 1.272 per cent in Victoria and 1.2 per cent in Queensland.

The Labor government is somewhat unjustly criticised at times for failing to support South Australian businesses. This bill blows that notion out of the water. Here we are, with this bill before parliament, showing our bona fides in supporting business in this state. The scheme proposed under this bill, when implemented, should result in a worst case scenario of an average premium rate no higher than 2 per cent. By this measure alone, South Australian business will save $180 million.

As I have said, this bill is not only about business, it is also about workers, and this bill seeks to balance the needs of both. Unlike the Liberal Party, we are not delivering a Work Choices here, destroying workers' rights under pressure from the business lobby: we are seeking a balanced solution. A successful workers compensation scheme must be bipartisan.

In response to the Hon. Robert Brokenshire's contribution on this bill, I say this: to suggest that Labor and the unions have abandoned the workers of South Australia is absolute nonsense. One might read the Hon. Robert Brokenshire's contribution and get the impression that he is, albeit self-appointed, a guardian of the workers of this state, a saviour of the working families of this state. The truth is that all Robert Brokenshire is is a hypocrite—

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Robert Brokenshire.

The Hon. G.A. KANDELAARS: —who will do anything and say anything to gain a cheap line in the media.

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Mr Kandelaars ought to be careful with the language he uses, but he also needs to address the member as the honourable.

The Hon. J.M. Gazzola: The honourable hypocrite.

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Let's not descend into that stuff. We have had in this chamber this week a few references to different things that should be said and should not be. I think that if we do not go down to one rung, we do not get any closer to the next one. The Hon. Mr Kandelaars has the call, but I remind him to refer to members with their correct title.

The Hon. G.A. KANDELAARS: The truth is that the Hon. Robert Brokenshire is hypocritical in his statements, absolutely hypocritical—a media junkie in the absolute. Case point No. 1: he says that he is appalled that the government is abandoning workers, yet he claims to be supporting this bill.

The Hon. B.V. Finnigan interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Mr Finnigan is out of order.

The Hon. G.A. KANDELAARS: Case point No. 2: the Hon. Robert Brokenshire's party, Family First, has placed a member in the Senate in Canberra, Senator Bob Day, Bob the Builder, who wants to tear down the federal minimum wage. Where is the outrage from the Hon. Robert Brokenshire?

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Mr Kandelaars refers to a senator for South Australia by his correct title and then uses a nickname. I am sure that you would take exception to that if that was done with a member from your party.

Members interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Order!

The Hon. G.A. KANDELAARS: I must say—

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Mr Kandelaars will refrain.

The Hon. G.A. KANDELAARS: I will withdraw 'Bob the Builder'. The former building magnate, Senator Bob Day, wants to tear down the federal minimum wage, and here we have the Hon. Robert Brokenshire saying nothing. Again, hypocritical.

An honourable member interjecting:

The Hon. G.A. KANDELAARS: What nonsense! It was Paul Keating who pointed out the fantastic hypocrisy of the modern conservatism which preaches the values of family and communities while conducting a direct assault—

Members interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Order! The Hon. Mr Kandelaars has the call. It is interesting that two of the chief recent interjectors have only just come into the chamber. The Hon. Mr Kandelaars has the call.

The Hon. G.A. KANDELAARS: I will repeat: it was the great Paul Keating who pointed out the fantastic hypocrisy of the modern conservatism which preaches the value of families and communities while conducting a direct assault on the working conditions and wages that put food on their table. I have no doubt that Mr Keating was talking about people like the Hon. Robert Brokenshire.

As I have said throughout this debate, this bill is not perfect. A scheme as complex as this will never be perfect; it is naive to think differently. Despite some imperfections, it is a good bill. I commend the Deputy Premier and Minister for Industrial Relations, the Hon. John Rau, for his hard and dedicated work in attempting to reform a broken system. I also commend the efforts of the minister's adviser Mr Jim Watson, who has played a significant role in the bill before us. I know the minister and Mr Watson have met with countless parties, trade unions and employer organisations over the past 12 months.

I will refer to my first speech in this place, when I reflected on the advice given to me by one of my mentors, John Sutton—a former secretary of my union. John's advice was be prepared to accept change. It is always easier to resist change, to say no, and it is far harder to lead people through it.

This bill represents change. It represents change on the part of workers and employers. It is about starting from scratch, working together and getting this system right. If we have to wait for perfection, then change will never come. Workers will be denied the support and respect they deserve from the scheme, and employers will be forced to face uncompetitive premiums. The time for change is now, and I commend the bill to this place.

The Hon. T.A. FRANKS (15:47): I rise on behalf of the Greens today to raise our concerns in my contribution to the debate on this Return to Work Bill. I thank the ministerial advisers Jim Watson, Emma Siami, Trudy Minett and Stephen Pinches for providing a briefing to myself and my staff. I note, as many have in their contributions, that the Deputy Premier and Minister for Industrial Relations has stated in an InDaily interview on 2 April 2014 that, indeed, the South Australian WorkCover scheme is a failure. I think his words were, of course, it was 'buggered'.

The Greens agree; however, we do not agree with the government's solution. The problem for the minister is that, in fact, this current scheme is not even Tory legislation of which the minister can absolve himself. Of course, this current scheme, which is self-described as 'buggered', is indeed a concoction of the Rann/Weatherill Labor government.

The scheme that introduced the changes in 2008 made the current South Australian WorkCover legislation one of the most draconian antiworker compensation legislation bills ever passed in any jurisdiction in our nation. In fact, this bill itself has been described as 'draconian' by a Labor backbencher in the other place. That backbencher declined to vote against the bill, but certainly at least spoke some truths in her second reading speech to this bill.

We know that the WorkCover claims management system has treated workers as claims rather than people, and this government has stood by and watched that happen; they have done very little. The Greens ask why it has taken so long to act, and undoing the damage that this cultural melee has caused will take more than just a change to the legislation. It will take an overhaul of the system and its stakeholders to create positive change and positive results for injured workers in this state.

I know the minister spent much of his time negotiating with the employers, the unions and various other stakeholders, and indeed much of that negotiation has taken place in these past weeks, as we have seen pages after pages after pages of amendments by the government to their own bill. I believe we are all looking to establish a better WorkCover system for our state, and I do appreciate the minister's keen interest and background in this field; however, we as the Greens still have grave concerns for some of the provisions in this bill.

Those concerns are indeed echoed by some sectors of the union movement, by some who represent injured workers, and by quite learned and relevant bodies as the Law Society of South Australia. Some of the provisions in the bill that have been criticised not only by the Law Society but by those groups will indeed not make a return-to-work bill, but a harder-to-return-to-work bill; in fact, we think that the 'Harder to Return to Work Act' is probably a better name for the act.

The tightening of the eligibility criteria for compensation is certainly something the Greens are concerned about. The government has proposed that an injured worker, when claiming for psychological injury, will have to prove that their employment was the significant contributing cause of that injury. Under the current act, an injured worker has to prove that the injury arose out of or in the course of employment.

We know that the current eligibility criteria is tight; for example, to be eligible for a compensation for a psychological injury, the injured worker must establish that their employment was a substantial cause of the injury. The Greens believe that the government's changes to tighten this eligibility criteria will, as the Law Society has also argued, result in increased claims disputation and delays in rehabilitation of injured workers. Therefore, the government bill will make it, in this area, harder to return to work.

The Greens are very interested and supportive of the principle that injured workers who can establish that negligence by their employer contributed to their injury should be able to access common law to dispute their case. However, that welcome comes with some disappointment about the 30 per cent threshold. We believe that the 30 per cent threshold is too high, and we are surprised that this level is coming from a Labor government. Under the government's bill, a worker needs to be 30 per cent whole person impaired before they are eligible to make a common law claim for damages against their employer.

WorkCover figures obtained under freedom of information by my office indicate that of the 1,070 workers with a whole person impairment in 2010-11 only 17 would have been able to satisfy this threshold test. In other words, less than 2 per cent will be eligible to seek common law damages. The government has sought to disguise this reality by redefining 'serious injuries' so that only those with near-catastrophic injuries would meet this test. The overwhelming majority would have their compensation payments arbitrarily and unfairly terminated.

The minister states that there needs to be 'clear, unambiguous boundaries' in the scheme, yet the definition of 'seriously-injured workers' is set at this arbitrary 30 per cent whole person impairment level, as I have already noted. Under the government's bill, a worker cannot add up all of his or her workplace injures to generate a sum total of 30 per cent whole person impairment. It has been brought to my attention by the Construction, Forestry, Mining and Energy Union (CFMEU) that some construction workers often suffer multiple injuries during the course of their working life. So, a worker should be able to add the two whole person impairments together.

Certainly while I was chair of the desal inquiry I heard from several witnesses in this regard, and I remember vividly one particular worker who presented to that inquiry. His life has been destroyed by the workplace injury he has incurred, but the second injury was actually as a result of the first injury being extant, and indeed compounded and made worse by the compensation he needed to make. He is in a position where he will likely never work again; he will certainly never work again in construction. The combination of those two injuries should indeed be seen as part of that whole. They were, in fact, connected.

In the examples we have been given by the CFMEU, a worker may injure their left knee in a given year and that would amount to an 18 per cent whole person impairment. Then, two years later, that same worker may injure their lower back, amounting to another 18 per cent whole person impairment. The total whole person impairment is then 36 per cent, which of course would raise them over the threshold, but because the impairment arises from two separate injuries, those two 18 per cent whole person impairments cannot be added together.

This worker, who has a buggered—and I think 'buggered' is probably the theme word of the speech—left knee and now a buggered lower back, will not be considered seriously-injured. Even if this point were to be acknowledged by the government, there is a more fundamental problem. The 30 per cent whole person impairment provides a totally unrealistic threshold. The vast majority of seriously-injured workers would, under the government's definition, be deemed as not seriously injured. In view of these concerns, the Greens will be moving amendments to reduce that current threshold of 30 per cent to 15 per cent.

A 15 per cent whole person impairment threshold will allow more workers to access ongoing financial support in the form of weekly income maintenance and compensation for medical expenses. We believe it reflects community expectations and, certainly, it has been the advice of those stakeholders we are listening to. What the government fails to recognise is that many workers with a 15 per cent whole person impairment will have little or no capacity to return to work in their pre-injury occupations. A nurse with a chronic back injury or a building worker with severe crush injuries to the lower body are just two examples of this.

The Greens are also concerned with regard to medical and related services. Our concerns are that all injured workers, other than those catastrophically injured, will not be able to access medical and related services 12 months after weekly payments have ceased. This will have the greatest impact on seriously-injured workers. For example, an injured worker with burns who was able to return to work but subsequently required a new skin graft 13 months later would not be able to make a claim against WorkCover for the costs involved.

Similarly, a worker with an employment-related lower back injury that flared up again 18 months after an initial return to work would also be denied workers compensation coverage for medical costs involved. The same applies to a construction worker with a work-related knee injury who has returned to work but will need surgery for a knee replacement in five years' time. Perhaps it would be more beneficial for the Deputy Premier to see how these services could be delivered more efficiently, rather than seeking to undermine injured workers' entitlements.

We also have concerns with regards to the lump sum compensation for permanent impairment. Ceasing benefits after a period of 104 weeks unless a worker can meet the 30 per cent whole person impairment threshold will not assist injured workers to return to work. It will, of course, make it harder to return to work. The Greens are concerned about the changes to the lump-sum compensation. The compensation payment is currently provided for under section 43 of the act and set out at clause 58 of the government's bill.

I have been advised by the CFMEU that clause 58(9) of the new bill is unfair and ought to be deleted. The consequence of this provision is that a worker who suffers a disc bulge which amounts to 5 per cent whole person impairment can apply for a lump sum payment under both the existing and new systems. However, under the government's bill, if that worker suffers a subsequent disc bulge amounting to another 5 per cent whole person impairment, which is connected to the original trauma or develops as a consequence of the original trauma, this second disc bulge is not compensable.

The new bill also provides that an assessment of permanent impairment will be determined at a time determined or approved by the Return to Work Corporation of South Australia. One can imagine a situation where the corporation adopts a policy position of delaying assessments.

It is not too hard to imagine such things occurring. I think that one should not set up a system, even if one cannot be perfect, as the Hon. Gerry Kandelaars attested to; one should seek to ensure that these sort of mischiefs are not able to be effected in the first place. The current system of assessments being made once injuries have stabilised works, and this adds nothing to the system. Once again, this provision will make it harder for injured workers to return to work.

The Greens also raise concerns with respect to section 100 of this new bill which provides that the tribunal must be satisfied that there is 'good reason existing that another party will not be unreasonably disadvantaged before an extension of time will be granted', yet there is no definition in this bill of what this so-called 'good reason' actually is.

The current act provides that an applicant has one month to dispute a decision of the corporation and may apply to the tribunal for an extension of time. This works well. It may be that when a worker receives notice of a decision he or she is unaware of what it means or what to do, or they may be unable to read the decision or may not be in a position and may only seek legal advice perhaps months later. The government's proposal, as noted by the Law Society, represents a threat to access to justice for this most vulnerable group in our community.

It will come as no surprise to members of this place that I will also be moving amendments to ensure cancer compensation equality for CFS volunteers. Members in this place are no stranger to the debates around presumptive legislation for cancer compensation affecting both paid and volunteer firefighters. We believe that the government has missed an opportunity to rectify its previous wrongs in this area and to provide CFS cancer compensation equality.

I will be speaking more to that amendment when I move it but I put the government on notice that we will not be letting this opportunity pass without that issue being voted on in this place. With that, I also ask the government to provide the Finity actuarial report which I understand has been finalised with regard to the CFS cancer compensation issue.

Many speakers preceding me have made observations about the lack of a union voice or a workers' voice with regard to the debates on this bill. There have been some union voices and perhaps they have not been the usual suspects. However, the Greens have heard loud and clear and we have been contacted only in the last few days by labour lawyers and we are waiting for some advice from them because they have some concerns with the bill that they wish to raise with us. We will reserve our right in clause 1 to perhaps raise questions on behalf of labour lawyers.

We also thank various union groups who, as I said, have made contact with us. A lot has been made about the silence of SA Unions in this debate. If the bill before us was being put here by a potential Marshall Liberal government we would be hearing loud and clear from SA Unions. We would be hearing loud and clear in opposition from the now Labor government. We would see the rallies and we certainly would be having a very different debate.

It is remarkable that there has been this absolute silence from the most usual suspects and that they have not played a louder and more vocal role on behalf of injured workers. That has been remarked upon and I cannot fail to remark upon it myself. The Hon. Robert Brokenshire had his finger on the pulse when he identified that early in the second reading contributions.

In his defence, regarding the counterattack he received from the Hon. Gerry Kandelaars about whether or not his words were hypocritical, if the Hon. Gerry Kandelaars had listened to the Hon. Rob Brokenshire's speech he said, 'Well, where are the Labor people on this? Where are the unions on this?' He did say, 'It's not my role to be there on behalf of the union movement.' He quite rightly pointed out that it was, in fact, an expectation historically that the Labor Party would be standing up for the union movement, and one would think that a Labor government would do so.

How far we have come from the heady days of Donald Dunstan and John Bannon, both of whom actually brought in legislation seeking to significantly improve the lot of workers in this state. I think this South Australian Labor government has lost its memory on these things, but also its heart and its vision. It is now looking for a lowest common denominator approach to fix something that is completely buggered and that was broken, that they were responsible for for over a decade.

It also appears to me that it is little wonder that the member for Dunstan advised everyone the night before the state poll to vote Labor, because it appears we have two Liberal parties in this parliament and that is probably at least one too many. We certainly have the best Liberal government that Labor can provide. With those few words, I look eagerly forward to the committee stage of this debate.

The Hon. J.M. GAZZOLA (16:06): I rise to support the Return to Work Bill. Given the Hon. Gerry Kandelaars' excellent contribution, honourable members will be relieved that I will not be dealing with the bill clause by clause. Once again, we find ourselves debating a bill dealing with workers injured at work, and once again we have the usual finger-pointing and chest beating by the opposition and the Hon. Mr Lucas, focusing on the unions, the government and the Labor Party. Of course, he is ably supported by his former ministerial colleague, the Hon. Mr Brokenshire, rewriting history and parading himself as the sole champion of families.

Once we strip away the vitriol and the rhetoric, they support the bill—groundhog day, sir. From my perspective, I support the bill, as it is an improvement from what we have and focuses on returning injured workers to employment. I commend the Premier and the Deputy Premier, and their staff, on the consultative and engagement process, which I believe is the reason that we do not see the steps of parliament clogged with angry protesters. However, it will be important that all of us, and the employers and employees, continue to monitor the new system once this bill passes, and hopefully we will remain focused on minimising workplace injuries. I commend the bill.

The Hon. B.V. FINNIGAN (16:07): I rise to contribute to the debate on the Return to Work Bill. The question of WorkCover and the workers compensation scheme has been quite a vexed question, as a number of honourable members have pointed out. This is the third time in 20-odd years that we are looking at significant reform or change to the bill. Unfortunately, we have heard the same story before: the scheme is stuffed; the levy is too high on business; the scheme is too generous; there are too many people for whom it is a pension scheme; we have to get rid of these people on long tail claims; the unfunded liability is out of control ergo we need to cut the entitlements of injured workers.

We also have constantly the going round in circles on claims management, who the lawyers are for WorkCover; the composition of the board (every few years that changes one way or another); whether or not redemptions should be encouraged or discouraged. Constantly we have had these changes in one form or another under governments, of both persuasions, all aimed at bringing the scheme finally, they say, into being viable and having a reduced unfunded liability.

I would like to just briefly address this issue of the unfunded liability, which gets so much attention. It is not insignificant that WorkCover has an unfunded liability as high as it is—it has been over $1 billion for some time—but it is important to keep that in perspective. It is a liability somewhat like state superannuation. It is not going to come due on one day.

If everybody who is a member of a bank walks in to that bank tomorrow and withdraws their money, that bank will have a problem, because the bank does not have all the money that you have deposited sitting there waiting for you to come in to collect. We know that.

Similarly, there is not going to be a stream of injured workers turning up at the WorkCover office tomorrow saying, 'I need my unfunded liability' and the office has to come up with that $1 billion or whatever. That is not the way it works and I think it is unfortunate that the unfunded liability gets focused on in a way that suggests it makes the scheme completely unviable. It is an important issue or problem to address, and I acknowledge that. I am certainly not dismissing it out of hand, but to suggest that we constantly have to make these radical changes to the scheme in order to address the unfunded liability, I think, is a mistake.

As the Hon. Mr Gazzola and others have noted, we have seen the usual suspects, if you like. The Liberal Party has said that they support any measure basically that they think will reduce the levy on business. If it is a Labor government making changes, they taunt all the Labor MPs and say, 'Why aren't you going to get up and defend workers and oppose this bill and cross the floor,' and so on.

It is certainly true that on the last occasion this was dealt with in a substantive way, in 2008, there was a lot of angst. People within the Labor Party were disconcerted, and I acknowledge that, at that time, I had reservations about the bill. To my regret, I went along and pushed it through, like every other member at the time. It is, I think, one of the key problems that the Labor Party has: members are bound on votes the way that they are, but that is another issue for another day and something that I alluded to in my maiden speech.

A number of honourable members have raised the questions of: where are the unions, what is their position, where are the rallies or where is the outrage? It is obviously important for unions to represent the interests of their members, but that will require the appropriate response. If they believe they are able to achieve a better outcome by negotiation and rational discussion with the government, perhaps that is their best strategy.

I do not know. I certainly do not speak for them and I do not have any knowledge of what the union point of view is, but I think it is harsh on the unions to say, 'You're not pulling up outside Parliament House and barricading the place, ergo you're soft, you're not representing your members.' I think that is an unfair criticism. It is unusual, I acknowledge, that a lot of unions have not put a formal position. We have not heard a lot of criticism, apart from perhaps the Police Association the other day, but that is a matter for them.

There is no doubt that the scheme does need change and that there are problems with it. In my brief tenure as minister, it was very clear to me that that was the case. In particular, I was concerned about the medical panels. I had been concerned about that very concept in the bill in 2008.

While I was impressed with the sincerity and the diligence of the people involved in the medical panels, I still believed it was a bad or incorrect process to initiate, where instead of having a tribunal or a quasi-judicial process, you have basically set up a medical panel. People were not entitled to representation, they could not make any formal submissions, because it was medical, not legal. Of course, in reality, they did act in the capacity of making judgements about whether or not people could stay on WorkCover, and I think that did need to change. Obviously, that is subject to a complete change in this bill.

There is no doubt, as anyone who has dealt with people on WorkCover knows, that it is an awful situation. It really is just terrible for them, and their families, to be stuck on WorkCover indefinitely, or to be out of the workforce for even a very short period of time, but certainly for an extended period of time. We do want to get people back to work as soon as possible. The question is how that is achieved.

I think a weakness of WorkCover for some time has been that it is not the best scheme in the event of very serious injuries. I think the compensation has probably been, in those cases, inadequate, so I do welcome the reintroduction of some common law rights. That is something that unions have pressed for for a long time, I know, but I think it is a bit limited in the way that that operates. There is some uncertainty about how that is going to interact with the National Disability Insurance Scheme, but that is partly because that is in a trial period at the moment and we are not quite sure how that is going to settle in the end. I do welcome some restoration of common law rights, but I do think there is a question over the threshold: is it arbitrary? Is it unfair? Is it in the right place or should there be one at all?

That brings me to the big problem I see with the WorkCover scheme and workers compensation in South Australia, which is that we have this sort of half-in, half-out scheme. We have a large number of employers and their workers self-insured, and so while they meet the legislation's requirements for injured workers and what they have to do, they are not part of the WorkCover scheme as such. I know that their self-insurance has to be approved and so on, but that only happens every so often. There are quite a few years in between.

So, we have a situation where a lot of the biggest—in fact, most of the biggest—employers are self-insured. They, of course, have the infrastructure generally to get better return to work rates and to operate their workers compensation payments more effectively, because if you are a big company you can afford obviously lawyers, you have in-house HR and workers compensation people, you have relationships with rehab providers or you might even employ them yourself. It is a different situation to someone who runs a small business, who simply is not able to draw on those resources.

What tends to happen is that the big employers are self-insured and they are able to manage their payments and entitlements for injured workers quite effectively because they have the size to draw on the resources that are able to put all those together, whereas the smaller employers are back into the WorkCover scheme and those employers with poor work safety records tend to be in the scheme. While there are penalties on their levy for poor work injury rates, they are not such that they are necessarily going to drive a change in behaviour. So I think the biggest problem we have with our scheme is that we have this dichotomy where most of the big employers and their workers are self-insured and the others are in the scheme. Sometimes the employers in the scheme are the ones that are going to have the higher costs, so I think that is a real concern that we have never really addressed.

Over the years since self-insurance was introduced, as time has gone on a greater trickle of employers have gone self-insured and I think that has led to the pressure on the WorkCover scheme and the WorkCover system: that a lot of the biggest and best employers in the sense of their return to work rates and so on are not in the scheme, thus driving up the levy and the costs for the businesses that are. I am not sure what the solution to that is. I guess the two clearest options would be either a universal scheme that everyone is in or a system where you have the statutory entitlements and then it is up to employers to insure and to make sure they are able to meet those statutory entitlements.

In a sense, you would have either self-insurance or the WorkCover scheme. Whether that is the right approach, honestly I am not saying I know the answer, but I think there does have to be some serious thought given to that. Both in 2008 and on this occasion I am not sure if that issue has really been sufficiently addressed, that one of the reasons that WorkCover struggles is because so many of the bigger and more professional employers, when it comes to handling workers compensation, are in fact self-insured.

Similarly, we do not know what may transpire on the national stage. Obviously, the Abbott government is not as disposed to national schemes as perhaps the former government, or even the Howard government. Nonetheless, something that is regularly talked about is that there should be some sort of national approach. It is very hard to get all of the states to agree on that, but that could happen in the future. Similarly, with the National Disability Insurance Scheme, there are certainly those who have said, 'Why do we have a scheme for workers compensation, a scheme for motor accidents and a scheme for other injuries? Why aren't they all into one sort of system?' Whether that happens will be down the track, but that is naturally something that would have a big impact on WorkCover.

The big problem I see with this scheme, though, is this separation between the 30 per cent people and the rest. It seems to me that, under this bill, you now have two schemes. If you have an injury with 30 per cent or less incapacity, after two years, you are cut off; basically, you are shifted onto commonwealth welfare. If you are still unable to work at that point, you go to Centrelink and get the DSP. If you are above 30 per cent, you will continue to get your payments and you will also have had some common law rights before you start on WorkCover, and they are difficult to access.

I know that, if we say that everybody has common law rights (that is, to sue for negligence by their employer), what is the point of the scheme, you are back to where you started. I think that it is a positive that there is some level of common law rights, but I think they are so restricted and limited that is going to be a problem because it is not going to be something that many workers will be able to access, although I think it would, in many cases, work better for seriously-injured workers if there has been negligence involved.

The big problem I see with this bill is simply that I think that it establishes two classes of injured workers: the below and above 30 per cent. I strongly imagine that that point has been chosen principally for an actuarial reason, more so than any lofty decision about what is the best point or what is the most important level of incapacity we need to address. I do have a great reservation about that; that is, that with people on less than 30 per cent incapacity, essentially we are not even subjecting them to the medical panel now, we are just cutting them off and saying, 'Off you go, go to Centrelink.'

I do have serious reservations about that element of the bill which, again, in many senses, the key element, as last time was the medical panel: essentially, this was a mechanism to cut people off so that they do not stay on the scheme like it is pension. This time it is even more stark and more direct: if you are less than 30 per cent incapacity, you are cut off at two years, see you later. I do have a serious reservation about that aspect of the bill, so I do reserve my position in relation to the third reading, particularly if the bill is subjected to amendments.

Certainly, something that I fear is that the Liberal Party and others in this place will get together and take out the good bits of the bill, if you like, or amend them in such a way as to make this a very retrograde step overall. But time will tell; they are entitled to move or support whatever amendments they see fit, naturally. But in light of that, I certainly reserve my own position in relation to the third reading. I accept that, frankly, it does not matter in terms of whether or not this bill will be passed.

I think there are certainly some positives about this bill, but I worry that we will be here again in another four years, five years, eight years or whatever when, again, parliament will be asked to make some sort of big change to WorkCover because we are saying, 'The scheme is stuffed—buggered. The unfunded liability is too high; it's not working. Too many people aren't returning to work; we need to fix this. We need to lower the levy to be competitive, so we will do this.'

That really opens up the act to, to borrow a line from Yes, Prime Minister, 'salami tactics'—slice by slice. Every time you need to improve the performance of the scheme, you just make another slice. I think that is a very regrettable way to go. While this bill provides for some broader reforms, particularly the reintroduction of common law rights and obviously a big change to the way disputes are handled through a changed tribunal set-up in another bill, and while there are some positives about the bill; nonetheless, there are certainly some negatives. I think we do not want to get into a situation where the solution to problems with WorkCover is that, every few years, we just cut things back a little more.

I think there is the broader question of having this two-tier scheme where we have larger employers with better return-to-work rates outside the scheme self-insuring, which makes the performance of those that are left even worse, and that just becomes an ongoing problem. As to exactly what the solution is there, there are a variety of things that could be done, but I think, ultimately, that has to be tackled at some point because a decisive factor in the problems with WorkCover is the number of employers, particularly large employers with large payrolls and large numbers of employees, that are self-insuring and are thus not contributing directly to the WorkCover scheme. With those remarks, I conclude my contribution.

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (16:27): I rise to close the debate at this second reading stage. I would like to say, at the outset, thank you to those members who have spoken on this bill so far and contributed to the debate on this very important topic. I understand that the Hon. John Darley and the Hon. Kelly Vincent have contributions to make as well but, for different reasons, are not able to make them right now. I would suggest there is some general agreement in the chamber that they be able to make those contributions at clause 1.

The Hon. R.I. Lucas: And Tung Ngo.

The Hon. I.K. HUNTER: I am not aware of that, Mr President.

The Hon. R.I. Lucas: Yes, he wants to speak at clause 1. Will you let him?

The Hon. I.K. HUNTER: Mr President, I think honourable members can make their own appeal to the chamber for that sort of latitude. I indicate now that, in terms of the Hon. Kelly Vincent and the Hon. Mr Darley, I have no problems with them making contributions at clause 1. I will undertake to put on the record at clause 1 answers to questions that have been raised in today's contributions as well. This afternoon, what I will be doing is making a couple of opening remarks of my own and then coming to some responses to questions that have been raised during the debate so far.

This reform will provide employers with significant premium relief and will also establish a framework whereby workers will be better supported to recover from their workplace injuries and get back to their employment. Not everyone, as has been remarked on, will be entirely happy with the package that is presented, but can I say that this bill achieves a very fine balancing act whereby there is something here for everyone.

When I spoke about the legislative reform package of 2008, I said at the time that I had some reservations, but many of the things I was concerned about then are resolved, in fact, in the return-to-work scheme proposed by this bill. The step-downs in income support have been softened, work capacity reviews are no longer a feature and neither are the medical panels.

At the time, I spoke about the need for the management of the scheme to improve. The current board and management team of WorkCover have demonstrated that they are taking a different approach to managing the scheme—one that they describe as an 'active approach'. I understand the board chairman Ms Jane Yuile attributes the scheme's recent financial results to this active management approach.

In the last financial year, I am told, they have seen a significant reduction in the number of workers continuing on the scheme. Their early intervention strategies provided workers and employers with face-to-face support to achieve better and faster return-to-work outcomes. Phase 1 of the government's reform project included changes to the WorkCover Corporation Act, which were passed by this parliament in late 2013. These amendments changed the composition of the board from a stakeholder board to a commercially focused board.

On 31 October last year, the appointment of exiting board member, Ms Jane Yuile, to the position of chairperson of the WorkCover board was announced, and the reappointment of existing board members Ms Joanne Denley and Mr Peter Malinauskas for a further three years. Four new members were also appointed for a term of two years: Professor William Griggs, Chris Latham, Nigel McBride and Yvonne Sneddon.

These appointees bring with them medical, workers compensation, legal, financial, actuarial and commercial management skills, which will be of critical importance in overseeing this next phase of reform to create a financially sustainable system for the benefit of all South Australians. The current management team, led by Greg McCarthy, also offers a wealth of experience, and has demonstrated a willingness to change and to improve the management of the scheme, and I welcome that. This will be a key difference from any reform that has come before.

Turning to the first response in relation to questions or points that were raised to the debate, I think the Hon. Robert Brokenshire and the Hon. Mr Lucas both questioned the lack of noise from unions about this reform. During consultation on the proposed scheme, I am advised a range of views were expressed, and the government firmly believes that the proposed return-to-work scheme strikes the right balance for workers and employers. There are certainly people in the community who may have strong views about elements of the scheme, or different views about how it could all work and be put together, but on balance this presents a good option for workers, for employers and for the sustainability of the scheme into the future.

Perhaps people are not entirely pleased with every aspect of the scheme, but there are positive features for both sides, and in reality, that is often the feature of legislation that we deal with in this place. While the return-to-work scheme has been promoted on the basis that it will provide employers with a $180-million relief in premium, there are significant benefits and support provided to workers who are injured at work.

Workers will receive intensive and customised early intervention support for injured workers and their employer, income support at a rate of 100 per cent of their notional weekly earnings for up to 12 months and income support at a rate of 80 per cent of their notional weekly earnings for up to a further 12 months for non seriously-injured workers and until retirement age for seriously-injured workers.

Workers will also receive medical and return-to-work services that are reasonable and necessary and reasonably incurred for up to three years for non seriously-injured workers, and for life for seriously-injured workers; a lump sum for permanent impairment, where the maximum is payable at 50 per cent whole person impairment, whereas currently it starts at 70 per cent; a lump sum for loss of future earning capacity for workers with a degree of whole person impairment between 5 per cent and 29 per cent; access to common law for seriously-injured workers; and a federal minimum wage safety net.

The retirement age matches the federal pension age. Payments during disputes have been reinstated, and workers can seek enforceable orders to be provided suitable employment by their employer and retraining where required and needed. I suggest this is why we have not seen the protests in the streets; there is something in this bill for everyone.

Reform of workers compensation is a priority for the government, as the current workers compensation scheme does not best serve workers, employers or our state. Workers experience worse return-to-work outcomes than in other jurisdictions, and the services provided to them are not providing early and effective recovery and return-to-work support.

Early intervention and improving injury management are at the heart of this new scheme and will provide improved outcomes for people injured at work. It is right that workers who are injured as a result of their work are supported to recover and return to work, and the government, through this proposed scheme and the changes to WorkCover's management, are clearly aiming to deliver high-quality services at a reduced cost to employers.

The Hon. Mr Brokenshire referred to the two-year banding of income support for non seriously-injured workers. The early intervention focus adopted in this scheme, along with obligations imposed on employers, workers, and the corporation and its agents, seeks to ensure that the maximum number of injured workers return to work with the two years. It is important to acknowledge that the vast majority of workers already return to work within that two-year period; I am advised that it is currently 93.2 per cent of workers. It is expected that this number will increase.

Those who cannot return to work because they are seriously injured will be looked after financially for the remainder of their working life and will receive lifetime care and support. Non seriously-injured workers who have not returned to work within two years are provided with a further 12 months of medical support and return-to-work services to assist their return to employment.

The bill also provides for the establishment of a return-to-work facilitation fund to assist workers to develop skills, knowledge and capacity and capabilities that will enable them to transition into employment or work that is reasonably suited to their circumstances. This will provide additional support to non seriously-injured workers to return to work three years after their first period of incapacity and will assist their transition from a return-to-work scheme to other employment and job placement services.

The Hon. Mr Brokenshire and the Hon. Mr Lucas both raised concerns about the management of the scheme and referred to their concerns about Ms Sandra De Poi's membership on the WorkCover board. Ms De Poi, I am advised, was appointed to the WorkCover board as a person experienced in rehabilitation for a three-year term from 7 August 2003. She was reappointed for a further three-year term from 7 August 2007 and again on 7 August 2010.

Ms De Poi has complied with all conflict-of-interest procedures, I am advised, as required by the WorkCover SA Board procedure, and a review by the Statutory Authorities Review Committee into the WorkCover Corporation, which published its report in February 2010, heard allegations in relation to board member Ms De Poi and conflicts of interest between her role as a major rehabilitation provider in South Australia and as a board member for WorkCover. After the issue was raised with WorkCover, the corporation engaged a leading audit company to investigate whether there was a conflict of interest and I am told that this investigation refuted any allegation of conflict of interest on Ms De Poi's part.

The 2008-09, 2009-10 and 2010-11 Auditor-General's agency audit reports on the WorkCover Corporation found that the terms and conditions of Ms De Poi's contracts were 'no more favourable than those available or which might reasonably be expected to be available on similar transactions to non-Board member related entities on an arm's length basis'. On 23 January 2013, the chairman of the WorkCover board announced the immediate resignation of Ms De Poi. Ms De Poi voluntarily resigned from the WorkCover board following the appointment of her partner to the South Australian cabinet.

Injured workers should rightly be provided with the opportunity to be supported or represented and this bill recognises that right in a number of places. The service standards set out in schedule 5 recognise that a worker has the right to be supported by another person and to be represented by a union, advocate or lawyer. This can be at any stage of a claim or in any setting. The state Ombudsman can investigate complaints about the service standards not being upheld. In proceedings before the tribunal, injured workers may be represented by a legal provider or an officer or employee of an industrial organisation, and the cost of this representation can be awarded against the corporation.

The scheme also provides for the corporation, in the context of early intervention, recovery and return to work, to encourage and support the work of organisations that provide assistance to workers with workplace injury. The Hon. Mr Brokenshire in this place highlighted that, in the past, the service provided by WorkCover to injured workers could be vastly improved, in particular that there had been a lack of case management and a lack of good outcomes for workers. He also raised that WorkCover needs to consider how it manages its responsibilities going forward in getting people back to work and the government acknowledges that, in the past, the service provided by WorkCover should have been better.

The new return-to-work scheme requires a refocused approach to the services that are provided to people injured at work and their employers. Along with legislative reform, significant service reform is underway. Services will be person-centred and tailored to the management of their situation in accordance with identified needs. In order to achieve long-term sustainable changes in culture and customer experience, service reform is required that reflects and operates in conjunction with the new return-to-work scheme.

To this end, work has already begun on early intervention measures, I am advised. Further initiatives, including mobile case management strategy, will be implemented to ensure that the service provided by WorkCover to injured workers is operating effectively at the time of the new scheme commencing on 1 July 2015. South Australia needs a sustainable scheme that provides quality services and support to injured workers and the return-to-work scheme meets this need.

I also want to clarify comments made, I think, by the Hon. Mr Brokenshire in relation to seriously-injured workers and common law. It appears that the honourable member was under the misapprehension that a seriously-injured worker must take a common-law action and prove negligence to ensure support after two years. My advice is that that is not the case. Seriously-injured workers will be entitled to income support until retirement and lifetime medical care and support.

If a seriously-injured worker chooses to pursue common law and is successful, then they will no longer be entitled to receive income support or recovery/return-to-work services under the scheme. They will still be entitled to lifetime medical support. If a seriously-injured worker pursues common law and is not successful they will continue to be entitled to receive income, recovery and return-to-work and medical support under the scheme.

I also want to respond to another comment made by the Hon. Robert Brokenshire. The honourable member was asking how the government can guarantee that $180 million will be going back into employers' pockets each year. My advice is that it is not all that difficult. In the same way that the scheme actuary looks at the scheme each year and assesses how much the scheme will cost in the coming year, based on how many claims it expects will be incurred and what those people with injuries will be entitled to claim under the legislative framework and the associated administrative costs, it makes a similar assessment based on what these people with injuries will be entitled to claim under the proposed return to work bill and the associated administrative costs.

As at the end of June 2014 the actuaries have assessed the break even premium rate, being the annual cost of the scheme, as 2.87 per cent of wages. When they have assessed the framework of the return-to-work scheme they have considered the elements and advise that as a whole it should cost no more than 2 per cent of wages. For example, they consider that time-banded income support and note that that will provide a saving. They consider there are no longer work capacity reviews and noted that saving associated with the administrative workload.

They have considered that this return-to-work scheme provides participants with increased certainty and less points where they may want to dispute a subjective decision, and they have noted that that will provide a saving as well. Of course, as actuaries do, they have placed a whole lot of caveats around that, but the government is confident and committed to providing employers with the annual savings target.

The Hon. Mr Brokenshire also asked about what will happen to workers with existing claims and the impact of the time-banded income support. When the new scheme commences, existing non seriously-injured workers will receive up to two years' income support with medical and related services also being provided until up to one year after income maintenance payments cease. Workers with an existing claim will be treated as seriously injured if they have a whole person impairment assessment of 30 per cent or more or if the corporation determines they are seriously injured during the transition process.

It needs to be emphasised that existing claimants will receive services that will be intensive, targeted and customised to the needs of the individual to support a return to work. The return-to-work facilitation fund I referred to earlier in my contribution will enable further assistance to be offered to workers once their income support has ceased, to develop skills or knowledge or capacity and capabilities to transition them into employment or work that is reasonably suited to their circumstances.

The Hon. Mr Lucas raised a concern that had been expressed to him that the removal of a separate category of injuries known as secondary injuries and the consequential inclusion of all claim costs in an employer's premium will create a risk that employers will discriminate against workers and job applicants based on them having a previous or existing injury or disability of any kind. State and federal equal opportunity laws make discrimination in employment unlawful if people are treated unfairly because of their disability. This would cover some but not all workers with a previous or existing injury.

There are penalties for discrimination and options for recourse set out in the equal opportunity legislation. Disclosure of a workers compensation history can only occur if the worker gives permission. All other workers compensation jurisdictions treat the cost of primary and secondary injuries the same and include them when calculating the experience rating premiums for employers, I am advised. The treatment of claim costs has, I am advised, not adversely affected employment behaviour.

We have no evidence to suggest that the inclusion of costs associated with secondary injuries has any effect on employers when considering prospective employees. It should also be noted that secondary injuries are not premium-neutral for self-insurers. They manage the liability associated with secondary injuries of their employee as well, focusing their attention on safe and durable return to work.

The Hon. Mr Lucas referred to the not insignificant number of amendments that were made to the bill in the House of Assembly and to the short notice members were given to consider these in advance. Many of those amendments and indeed the amendments that have been filed in this place are considered minor or technical in nature. They are a result of the bill being tabled in parliament and subject to review by technical officers and the ongoing discussions the minister has been having with community representatives.

In such a significant piece of legislation it is not surprising to discover some corrections as we work through this process. Some of the amendments proposed in this place are a consequence of the amendments that were subsequently made to the South Australian Employment Tribunal Bill to ensure the cross-referencing is correct, and we are trying to be accommodating and we are trying to get this right and that means continuing discussions such as with the honourable member about making improvements as we go.

The Hon. Mr Lucas has noted that this bill removes the position of the WorkCover Ombudsman and has asked what the termination arrangements will be for the current WorkCover Ombudsman. I am advised that Mr Wayne Lines' appointment as WorkCover Ombudsman expired on 30 June 2014. At that time, because of the government's proposed workers compensation reforms, the future of that position was uncertain.

As a result, Mr Lines was appointed as acting WorkCover Ombudsman, commencing on 1 July 2014 and continuing until further notice. The usual principle applied when a statutory office is abolished by statute is that the appointment comes to an end without the incumbent having any entitlement to compensation. There will therefore be no termination payout for the acting WorkCover Ombudsman other than whatever leave entitlements he may have accrued.

The Hon. Mr Lucas asked for clarification regarding the exact numbers of workers who will be impacted by these reforms and how that number had been calculated. WorkCover has advised that under the proposed legislative reform about 94 per cent of people will be the same or better off, if looking at a purely financial approach, but if you took account of the improved service provision and the early intervention approach, they would be better off indeed.

This figure is based on an average of the December 2013 actuarial projections in relation to income support. The new lump sum payment for non-economic loss will also provide greater financial support to some of these workers. For workers who have no time off work, or only up to 13 weeks off, there will be no change to the income support offered. Workers who receive more than 13 weeks' income support, but less than two years, will have increased financial support because the step-downs have been softened. The 94 per cent is arrived at by considering the number of workers who either have no time off work or have returned to work before the two-year mark, as well as those workers who will be characterised as seriously injured. By two years, only about 6.8 per cent of the workers are still receiving benefits.

In addition, there will be a number of workers, whom I understand make up a bit less than 1 per cent, who will be characterised as seriously injured. These workers will also be the same or better off under the new scheme. The honourable member asked for confirmation about how many individuals will be characterised as seriously injured each year. I am advised that out of the new claims that are incurred each year it is anticipated there will be about 35 workers who will be seriously injured. Naturally this figure may vary year to year and this is the expected longer term average, I am advised.

These figures are also historical and, in the new scheme, with the improved services supporting return to work, WorkCover and the government are confident that the number of workers who will not be at least the same or better off under the new scheme will be even smaller. The other figures the honourable member asked for confirmation about were the number of workers who return to work within four weeks and the number of workers who return to work within 52 weeks. I have been advised that at four weeks, 72 per cent of workers either have no time off work or have returned to work and by 52 weeks, 92 per cent of workers have ceased receiving income support.

The Hon. Mr Lucas also asked about an employer's obligation to provide suitable duties, following on, I understand, from the member for Schubert's comments in the other place. Employers have always been required to provide suitable employment to their workers who have a work injury to assist in their recovery and return to work. An employer must provide employment that the worker is fit to do, and where it is practicable the work must be the same as or equivalent to the employment the worker had before the injury.

This bill clearly outlines the responsibility of employers' obligation to provide suitable employment and support their workers' participation and recovery and return-to-work activities. This bill provides an opportunity for an injured worker who may wrongly be denied the opportunity of returning to work to go to an independent arbiter—the tribunal—to look at the circumstances. This is an important change.

The tribunal can make an order that their pre-injury employer provide suitable employment to the worker where the employer has failed to do so following the written request of the worker within a one-month time frame. This provision does not have a two-year time limit, I am advised. If a person is fit for work and ready to go to work, and an employer has work for which they are fit, is a fair thing that they have every assistance to return to work.

The South Australian Civil and Administrative Tribunal has multi jurisdictions to deal with administrative matters. The bill covering the first tranche of jurisdictions being considered to be transferred and to come into operation over forthcoming months is still in this place, and theoretically a stream could be created to include the South Australian Employment Tribunal jurisdiction. However, it is simply not a practical thing to do at this late stage, and SACAT is not even expected to be operational with its first tranche of jurisdictions until March 2015.

Turning to the issue of the industry rate, if the Return to Work Bill is passed without any changes affecting cost, the Minister for Industrial Relations has advised me that he is confident that WorkCover's management's recommendation to the board will be to set an average premium rate of 2 per cent for the 2015-16 financial year. This is of course subject to actuarial advice. A 2 per cent average premium rate represents a 27 per cent reduction in the premium collection across the scheme. That means $180 million will be available to South Australian employers to grow their business and support our economy. As the Hon. Mr Lucas noted, the Return to Work Bill proposes to remove the industry rate cap of 7.5 per cent.

Currently there are 25 industry classifications covering 3,645 employers where the industry rate is capped at 7.5 per cent, but the true industry rate is higher than 7.5 per cent, I am told. This is about 7.44 per cent of all employers in the scheme. These employers are cross-subsidised by the remaining 46,000 employers, to the extent of approximately $9 million annually.

If nothing else changed and we were just removing the industry rate cap then employers in these 25 industries could expect their premium rate to increase. However, if the average premium rate for 2015-16 is set at 2.0 per cent, as anticipated, there will be an average reduction to each industry rate of 27 per cent.

The claims costs and remuneration declared for each industry cannot currently be accurately predicted for 2015-16. However, I am advised it is expected that all except four industries would have industry rates lower than 7.5 per cent due to the extent of the average premium rate decrease arising from the bill.

Modelling on current figures indicates that 99 employers in four industries would have an industry rate greater than 7.5 per cent with the removal of the cap under the new scheme. As the Hon. Mr Lucas stated these employers are in meat processing, non-ferrous casting or forging, horse recreation and sport and cutlery and hand tools.

In addition, there are changes to the premium system that are required to ensure it properly reflects the structure of the new scheme. There are also non-legislative changes, which seek to reduce the volatility in the amount of premium paid by an experience-rated employer; for example, WorkCover will continue its discussions with employers about the removal of the hindsight premium calculation which has caused some considerable angst, I am advised.

The proposed legislation also changes the way premium is calculated. For example, the inclusion of secondary injuries in an experience-rated employer’s premium calculation and the removal of the industry cap for all employers. All of these changes mean that there needs to be a transition to the new regime to avoid any shocks on businesses.

The Government and WorkCover are committed to a transition period which ensures that an employer who may be adversely impacted by these changes will not get a large or sudden increase. The minister has committed to having further discussions with the opposition and it would also be appropriate to have discussions with employer associations to develop the transition period principles.

The Hon. Mr Lucas has asked of the government on behalf of Minister Rau to read in this council the precise terms of a direction that he would indicate he would issue to the board in terms of a transitional period for the removal of the industry cap of five years.

As I have just confirmed, the government is committed to a transition. I am advised that the minister will be writing a letter to the board indicating his request for a transitional period and that a direction would not be issued unless there was concern about the board’s willingness to comply. Given WorkCover is also fully committed to a transitional period, it is not expected that a direction will be necessary.

I will, however, make a statement committing the government and WorkCover to a transitional period over three to five years to ensure that an employer who may be adversely impacted by these changes will not get a large or sudden increase. This transitional period will cover the removal of the industry caps, the inclusion of secondary injuries within the premium calculation and any non-legislative improvements to the premium system.

I will also commit that WorkCover will engage with employer associations about the transition principles, and Minister Rau has committed to having further discussions with the opposition on the details of the transition approach.

On the topic of average premium rate ceiling, the Hon. Mr Lucas asked about the amendments that were made to the bill in the House of Assembly regarding the setting of the average premium rate. The purpose for the clause regarding the average premium rate is to give a very clear statutory direction to the corporation about what its absolute outer limit of acceptable performance might be, while acknowledging that from time to time events will occur which will vary the performance. The decision to reduce, maintain or increase the premium is one for the WorkCover board.

The amendment that was made in the House of Assembly to these provisions was about acknowledging that the board has that responsibility for setting the rate. The provisions prior to the amendment would have set in motion a sequence of events, if and when the rate needed to be set above 2 per cent, that did not add value and were disproportionate to the situation. If the board makes a decision based on the actuarial advice is receives to set the rate above 2 per cent, then the minister of the day does not need to also consider those events and publish a notice in the Government Gazette and so on.

The minister will want to understand what has led to the board's decision, which is why there is a requirement for the corporation to provide a report. This amendment does not represent a shying away from the government's commitment that the Return To Work Bill will provide employers with the savings as indicated of $180 million per year. This government is confident that the bill provides for a scheme that costs no more than 2 per cent. With regard to requiring this report to be publicly available or tabled in parliament, I will leave that to the honourable member to progress.

The Hon. Mr Lucas spoke about how group training organisations had approached him seeking amendments which will exempt the employers who host their apprentices and trainees from their common law obligation to provide safe work sites for visitors, including contractors, delivery drivers, members of the public, employees of other organisations and people working under labour hire arrangements. I understand this is a long-standing issue.

The amendments that have been proposed will exclude WorkCover's ability to issue proceedings to recover a compensation paid and payable from a negligent host employer. All other private and government-owned workers compensation insurers in Australia recover costs wherever possible from third parties to their insured employer. This enables cost containment for the WorkCover insured employers.

The proposed amendments will not in isolation prevent an injured worker from issuing proceedings at common law against a negligent host employer to recover damages for injuries and consequent losses. As a consequence, workers may double-dip, receiving workers compensation benefits as well as common law damages for the same injury. Public liability litigation will increase to raise host employers' public liability premiums and diminish their appetite to take on apprentices and trainees. The workers' right to proceed with a common law claim for negligence will endure under the Civil Liability Act.

The Hon. Mr Lucas asked if it could be put on the record the reasons why the government and WorkCover believe the current arrangements are fair to group training schemes, host employers and individual apprentices and trainees. WorkCover has advised that group training organisations are provided with significant subsidies under the scheme to support the ongoing employment of apprentices and trainees in this state.

Because of the premium rebate offered against apprentice remuneration, group training organisations currently only pay the minimum premium amount of $200 per year for the registration relevant to apprentices and trainees. Apprentices and trainees employed under a group training arrangement are not subject to the experience rating premium system, so the individual claim costs for any injuries incurred by their apprentices and trainees do not affect the group training organisation's premium. They are getting quite a good deal.

Apprentices and trainees are covered, as other workers are, under the scheme such that if they have an injury they are able to receive income support and reimbursement for medical expenses as eligible. If an apprentice or trainee is injured at the workplace of their host employer and the host employer's negligence caused or contributed to the injury, perhaps because they did not provide a safe working environment or maintain their equipment, for example, the worker is able to pursue the host employer at common law for damages.

The host employer is exposed to these actions in the same way they are exposed if a visitor is injured at the workplace. Host employers are not considered the true employer of the apprentice, so they do not have any obligation to pay workers compensation premiums or provide suitable employment to assist workers to return to work after an injury. It is therefore appropriate that they are required to maintain safe workplaces and are not protected from the consequences if they do not.

In relation to injured worker advocates, the Hon. Mr Lucas referred to the Statutory Authorities Review Committee report in relation to WorkCover, which began in October 2007 and concluded with a report in February of 2010. One of the recommendations, which was agreed to by all members of the committee, was that WorkCover establish a more open and consultative management style with injured workers and interested stakeholders, such as the Work Injured Resource Connection. I am advised that, since that report in early 2010, there have been various changes in the approach to stakeholder engagement at WorkCover.

Fundamentally, stakeholders are considered to be employers and associated industrial associations and workers and their representatives, as is set out in the WorkCover Corporation Charter. I am advised that WorkCover has adopted a proactive and targeted approach in seeking feedback from its key stakeholders on scheme changes and improvements as and when they arise. This targeted engagement has been found to deliver efficient and effective two-way information flows.

During the last financial year, WorkCover delivered a range of activities to engage with its key stakeholders, including four forums with employers and unions, 18 forums with providers, and 15 forums for GPs, and regular communications distribution via consultation papers, email, newsletters and other sources of information. There are also opportunities, on an ongoing basis, for individuals to contact WorkCover to discuss issues they may have with the organisation or the scheme. WorkCover will undertake significant consultation with stakeholders and interested parties throughout the implementation of the scheme reform.

The Hon. Mr Lucas requested a commitment for WorkCover to meet regularly with stakeholders and interested parties, such as Work Injured Resource Connection. I am advised that WorkCover's approach of having in-depth workshops with employer associations and trade unions has proved highly beneficial to all parties and that this will certainly continue on a topic-specific basis. I am advised that WorkCover will give consideration as to how to engage with interested parties more broadly to ensure that their views are heard and considered. I would now like to place on the record some responses to questions that were asked in the other place.

The Deputy Leader of the Opposition asked what the annual saving to the public sector was likely to be, given their self-insured status under this scheme. I am advised that there would be about a $219 million reduction in the outstanding liability, reflecting savings and income maintenance and medical expenses only. Further, based on the 2013-14 year, the annual amount saved under the new scheme is estimated to be $24.9 million, I am advised, noting that this may vary significantly from year to year due to injury activity and severity.

This estimate does not take into account the potential effects of changes to redemption payments, step-downs, legal costs and other expenses, nor does it account for those claims that may be determined as greater than 30 per cent whole person impairment, where the entitlement to income maintenance and medical expenses does not cease, as the percentage of injured workers that may be greater than 30 per cent WPI cannot be estimated at this time.

There is a high degree of uncertainty in estimating potential savings for government because there are many variables that determine the overall cost of the scheme, including the number of new workers compensation claims in any given year, the severity of the new claims, changes to medical expenses and treatment options, and effectiveness of rehabilitation and differing agency return-to-work outcomes. Notwithstanding the above uncertainty, there will be annual savings for the South Australian public sector.

The member for Schubert asked: how often do injured workers have multiple employers for the purposes of determining average weekly earnings? I am advised that while the information is used in some cases, the determination letters sent to injured workers do not record in any traceable manner whether the average weekly earnings is based upon earnings with two or more employers. This makes it difficult to search the system for claims where there are two employers at the time of the injury.

While a report of the claims that have 'second employer' details completed on the claim form could be produced, this does not necessarily mean that the worker's average weekly earnings were determined on the basis of section 4(2)(b) of the current act; for example, the worker may not be incapacitated for work with the 'second employer', or the relationship with the 'second employer' may not be one of a contract of service.

The member for Davenport asked whether it was against the law for an employer to ask an employee at the point of interview, 'Do you have pre-existing coronary heart disease?' I am advised that antidiscrimination laws would prevent an employer from refusing a prospective employee because the applicant has a pre-existing health concern or has previously made a claim for workers. compensation.

An employer can lawfully refuse to grant employment to someone whose physical or mental impairment would render them unable to perform the job. Thus, instead of asking an applicant about their WorkCover history, a relevant question would be: are you currently affected by any injury or condition that may impact upon your ability to perform all the duties of the job?

This information is relevant to the employer fulfilling their workplace safety obligations and ensuring that the applicant could undertake the job without endangering themselves or others. Failure to provide this information may go to the heart of the employment contract and form the basis of disciplinary action or summary dismissal.

The member for MacKillop asked whether the consultation requirement for the setting of medical fees was too onerous. The Workers Rehabilitation and Compensation Act 1986 currently states that the corporation 'must consult' with the listed associations. This process of consulting and publishing scales of charges for medical and allied health fees currently occurs annually, I am advised. While stakeholders may not always have particular feedback on proposed changes to the recommended fees, it is important that they be given an opportunity to consider the proposal.

The member for Ashford asked whether there would be any changes to a cap on the cost of doctors fees for reports. The medical fees payable under the scheme are subject to consultation. The minister may publish scales of charges in the Government Gazette for the various medical expenses on the recommendation of the corporation. Before the corporation makes a recommendation regarding the scales of charges, it is required to consult with professional associations representing the providers of medical services, associations representing the self-insured employers, associations representing employers, including Business SA, and associations representing employees, including SA Unions.

This process of consulting and publishing scales of charges for medical and allied health fees currently occurs annually, I am advised. It is intended that it will continue to be reviewed and updated annually. There is no planned change to the rate set for medical reports, apart from the normal annual indexation and considering any specific issues raised during the consultation process. The consultation process is expected to commence in early 2015. The member for Schubert also requested further information about annual leave and income support. I have been advised that clause 50(7) of the Return to Work Bill 2014 provides that:

If a worker applies for, and takes, a period of annual leave, the Corporation may suspend weekly payments that would otherwise be payable to the worker during the period while the worker is on leave.

Clause 50(8) provides that a decision to suspend weekly payments in these circumstances 'does not constitute a reviewable decision'.

The issue of notice with suspensions is an interesting one. The Full Bench of the tribunal in WorkCover Corporation/Commercial Union Workers Compensation (John Thring) v Mark Haynes [1999] SAWCT 94 is authority for the proposition that a suspension is a different species of determination to a discontinuance, and is therefore not subject to the notice provisions set out in section 36(3a), now clause 48(6).

This decision noted that a suspension is temporary in nature and brings about the temporary cessation of weekly payments until the worker complies with a stated requirement. The worker is not required to make a fresh claim to have the payments reinstated; it is automatic. The obligation to make weekly payments has not been ceased: it has merely been postponed until compliance has been achieved. Notice of a suspension of weekly payments must be given as soon as practicable after the decision is made but not necessarily before it takes effect, so that clause 50(7) is effective and parliament's intention is realised, and we will all be very grateful for that.

The Deputy Leader of the Opposition asked why there was a discrepancy in the maximum penalties for disclosure of information. Penalties for information disclosure have been increased in the new Return to Work Bill 2014. The maximum penalty for the advisory committee has moved from $1,000 to $5,000, and the maximum penalty for employers has increased from $5,000 to $10,000. The increases in penalties were a matter for parliamentary counsel to ensure consistency with levels of penalties in other legislation. The difference in penalties reflects that one penalty is for an individual and one for an organisation.

I have endeavoured to answer as much as possible to respond to members' queries here and in the other place. As I said at the beginning, any matters I have not yet dealt with I will respond to at the beginning of the committee stages. I look forward to the speedy passage of the bill through those stages.

Bill read a second time.