Karen McNamara (Dobell, Liberal Party) Share this | Hansard source

I rise in continuation on my contribution to the debate on the Safety, Rehabilitation and Compensation Legislation Amendment Bill 2014. For example, each bank guarantee requires a separate actuarial report with different requirements set by each jurisdiction, and there are numerous differences between jurisdictions in taking out a reinsurance policy. In their submission to the 2004 Productivity Commission inquiry, Pacific National claimed that national based insurance potentially represented a saving of between 50 per cent and 70 per cent on recurrent financial costs alone. Productivity and savings would also be realised through the capacity for an employer to standardise, centralise and streamline claims management functions.

Each jurisdictional scheme requires self-insurers to demonstrate adequate procedures for managing workers compensation claims. Self-insurers are required to demonstrate that they employ qualified staff and engage certified scheme service providers. This is to ensure that employees of self-insurers have their claims managed in a professional manner in accordance with the different scheme benefit structures. Most jurisdictions require self-insurers to have claims managers located in that jurisdiction.

A number of self-insurers have noted that this prevents them from operating a centralised claims management centre which would reduce claims management costs. For example, CSR in 2004 estimated that it would save $150,000 per annum if it could have a single claims management centre. Operating under one scheme also means having a uniform set of benefits and rules across all employees, which ensures equality amongst workers. Multistate self-insurers are required to have detailed knowledge of up to eight different claims management and benefit structures. IT systems to manage different payment structures are expensive and time consuming, given the complexities involved in the benefit calculation processes and variations between jurisdictions.

WHS regulations apply to all employers, irrespective of whether or not they self-insure; however added requirements are placed upon self-insurers to demonstrate through audit that they have appropriate WHS management systems. These systems and audit processes differ between the schemes, adding additional costs for multistate employers. Costs associated with complying with various WHS requirements exacerbated with the additional expense of multiple audits and differences between audit requirements. This makes it difficult and costly for multistate employers to develop uniform WHS management systems. For example, Woolworths has different WHS management systems in each jurisdiction due to the difficulty in developing a single WHS management process that meets different jurisdictional requirements. Woolworths estimate a saving of approximately $400,000 per annum if they had a single national WHS management system.

Self-insurers are required to pay an application fee and ongoing levies for each licence These fees and charges include the recovery of self-insurance application administration costs and contributions to WHS functions. For corporations who operate in multiple jurisdictions, there may be unnecessary replication in the payment of some component of these fees and concern with regard to the variance in these fees despite a similar number of employees covered by each licence. Self-Insurers are required to supply data to the regulator. The collection of data imposes costs on multistate self-insurers, because each scheme requires a different data set and software to supply the data; thus preventing self-insurers from operating an integrated computer system to satisfy multistate scheme requirements.

Another significant amendment presented in this bill is the enabling of the SRCC to grant a single licence for self-insurance through the Comcare scheme for a related group of companies. Under current arrangements a corporation cannot apply for a group self-insurance licence under Comcare, so each entity in the group must apply separately for a licence. The introduction of group licences will reduce red tape and cost for employers, as it recognises that groups of interrelated corporations often share return-to-work and work health and safety systems within the group.

A significant barrier preventing harmonisation of workers compensation scheme has been the lack of an integrated national work health and safety framework. In March 2007 occupational health and safety coverage was provided for all Safety, Rehabilitation and Compensation Act licensees. However, with the enactment of the Commonwealth WHS Act 2011 new entrants to the Comcare scheme from 1 January 2012 did not have coverage for WHS purposes. This meant that Comcare self-insurers lost the advantage of truly uniform WHS laws and the reduced compliance costs and administrative efficiency that this brings. This change was introduced in anticipation of national harmonisation of work health and safety laws, which has not occurred in Victoria and Western Australia, resulting in multistate employers continuing to operate under varying schemes.

This bill also seeks to excludes workers compensation claims for injuries that occur during recess breaks away from an employer's premises. Under current arrangements, compensation is payable for injuries occurring during recess breaks even if the employee is not at the place of work when the injury occurs. Under the proposed amendments, injuries occurring when a worker is away from the workplace and is not undertaking work related activities will not be compensated. If workers are undertaking activities associated with their employment, or at the request or direction of the employer during a recess, they will still be covered. Workers who are injured at work even while having a recess or lunch break will remain fully covered.

The bill will also exclude access to workers compensation when a worker engages in a serious and wilful misconduct even if the injury results in death or serious and permanent impairment. As the minister outlined in his second reading speech:

While claims in this category are rare, the Australian public rightly expects that employees should take personal responsibility for their actions.

It is crucial that any workers compensation scheme is geared towards people acting in a proper and safe manner and does not include a safety net for people who break the rules and put themselves and other employees at risk.

This government will ensure that employers under Comcare will operate under a single workers compensation and WHS scheme. Eligible corporations will have access to Comcare's workers compensation and WHS regime. This will reduce red tape, jurisdictional inconsistency and maximise equity for employees in terms of injury management, compensation and return to work. This will also enable these corporations to achieve an integrated approach to prevention, rehabilitation and return to work. The proposed reforms under this bill will be better for businesses, better for workers and better for the economy.

Eligible multijurisdictional corporations will have the opportunity to realise efficiencies and savings from becoming a self-insurer under a single jurisdiction—hence, capitalising on the ability to invest and expand nationally as a result of coverage under a single regime. The Taylor Fry report in examining the financial arrangements for self-insurers under the Comcare scheme stated there would be:

Minimal impacts on the state and territory workers' compensation schemes if private corporations were to join the Comcare scheme as self-insurers. This was consistent with the 2004 Productivity Commission report. I commend this bill to the House. (Time expired)

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