Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

I rise on behalf of the Labor Party to indicate that we will be opposing the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006. We oppose this legislation because, like all legislation on industrial relations brought forward by the Howard government, this legislation is ultimately not in the interest of working Australians. Like the government’s unfair, extreme industrial relations legislation more generally, this bill has at its heart the stripping away of the terms and conditions of our workers.

Labor is driven by a desire for genuine improvements in the area of occupational health and safety across Australian workplaces and we believe that appropriate compensation is an important and essential part of that. However, this legislation will erode the compensation component payable to Australian employees.

This bill is the latest in a number of amendments made to Australia’s occupational health and safety legislative framework by the Howard government and follows on from previous legislation introduced by the government since the 2004 election. These include the repeal of the National Occupational Health and Safety Commission, a bill in 2005; the Australian Workplace Safety Standards Bill; the Occupational Health and Safety (Commonwealth Employment) Amendment Bill 2005; the promoting safer workplaces bill; and the occupational health and safety bill, and the safety, rehabilitation and compensation legislation bill in 2005. Labor opposed each of these bills for good reason. We opposed these bills because each of them reduced, compromised or put at risk the occupational health and safety conditions of Australian workers, and this bill is no different.

The bill before us is the Howard government’s formal response to recommendations made by the Productivity Commission that changes in this area were needed. It follows on from earlier legislative changes also made following the Productivity Commission recommendations, and principally this included the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006.

The principal objective of the bill before us today is to minimise the cost of work related injury and disease for Comcare. The explanatory memorandum to the bill confirms that the savings to the scheme are substantial with an estimated $20 million per annum to be saved as a result of the measures being debated in the chamber. One has to question the real object and timing of these measures in light of these savings. At a time when private sector firms are being encouraged to migrate to the traditionally white-collar scheme, it is clear that these savings will be shared by self-insurers under the scheme. We need to ask the question in this place why these savings are being pursued, why coverage is being undermined and why the foundations of a beneficial scheme appeared to be reformed for new entrant self-insurers to this scheme.

The bill changes the extent to which injury, illness or disease must have been contributed to by an employee’s work before the injury is compensable. It does so by changing the definition of ‘disease’ to strengthen the connection between the disease and the employee’s employment. In particular, it requires the worker to prove that employment has made a significant rather than a material contribution to the disease for it to be compensable. This rewording of the bill has this effect: the government is narrowing the circumstances in which Australian workers may claim compensation. The government argues that this is because courts have misinterpreted the meaning of the word ‘material’; however, the government’s intent is betrayed by the wording of its own explanatory memorandum to the bill, which states:

... the Government is seeking to significantly amend the legislation to reflect its desire to decrease the number of injuries covered by the Scheme.

The EM makes clear what the government’s agenda is. If the Howard government was concerned about wording and interpretation, it could have inserted a clarifying statement into the bill. By its own admission, it is seeking to significantly amend the legislation for the sole purpose of decreasing the number of injuries to workers which are covered by the Comcare scheme. The government is not concerned about injury prevention, employee protection or care. The one aim of this Howard government, as we have seen in all its occupational health and safety and Comcare legislation, is to lower levels of protection for employees in workplaces covered by the Commonwealth jurisdiction, and now it wants to further reduce the sorts of injuries for which Australian employees may be eligible for compensation.

Another amendment contained in the bill changes the definition of ‘injury’ to exclude injuries arising from reasonable administrative action taken in a reasonable manner. The bill also expands the exclusionary provisions for stress claims to specifically include performance appraisals and counselling in relation to performance.

Labor has two concerns in relation to these specific proposed changes. First, we are of the view that there ought not to be a difference between how different sorts of injuries are treated. The broadening of the exclusions from the definitions of ‘injury’ or ‘aggravation’ purports to apply to all injuries covered by the act. However, Labor is of the view that in practice it is likely to be a restriction on the ability of employees to make claims for compensation relating to stress related illnesses. These sorts of injuries are particularly relevant to the demographic of workers covered by the Comcare regime, which is predominantly white-collar employees. Labor is of the view that where an injury arises in the course of, or as a result of, an employee’s work then they should be eligible for appropriate compensation.

The bill also seeks to remove coverage for non-work related journeys and recess breaks where the employer has no control over the activities of the employee, such as meal breaks away from the workplace. In our view, this is yet another example of the government trying to reduce its expenditure on workers compensation. The proposed new section 6(1)(b) represents another attempt by the government to narrow the range of circumstances in which an injury is covered by Comcare. Firstly, by removing almost all journey claims from the coverage of the legislation, the government is engaging in a significant cost shift back onto state governments—generally to cover through compulsory third party claims. Labor notes that not all state jurisdictions have excluded journey claims from their state workers compensation systems. For example, New South Wales still covers workers when they are injured on their way to or from work.

Our second area of concern also relates to this issue. Although the proposed section has five subsections detailing various circumstances in which an injury may occur, the bill is unclear about injuries arising in a number of areas. For example, how will an injury be treated when an employee is out of the workplace on work business but diverts for personal business? Will an injury they sustain be covered by Comcare under these amendments?

Lastly on this point, Labor believes that where an employee is injured during travel for the purpose of attending work or returning home from work then there is a policy argument that the travel is for work purposes. This bill automatically excludes from coverage injuries arising in these circumstances. This is of concern. Labor believes the government has not established a case to depart from the general principle that injuries sustained during work related travel should be compensable unless broken by a substantial deviation. These aspects of the bill before the chamber leave gaps in coverage and lead to uncertainty which will create problems for the Commonwealth, other federal employers, employees and administrators in the future.

The bill also changes the calculation of retirees’ incapacity benefits to take into account changes in interest rates and superannuation fund contributions. It updates measures for calculating benefits for employees relating to the definitions of ‘normal working earnings’ and ‘superannuation scheme’. This means that all potential earnings from suitable employment can be taken into account when determining incapacity payments. It enables determining authorities to directly reimburse healthcare providers for the cost of their services to injured employees and increases the maximum funeral benefits payable.

The bill sets out what is a ‘reasonable administrative action’ in relation to appraisals, counselling, suspension and the disciplining of employees. The only way the bill provides that these are reasonable is to use that word as a descriptor—for example, to say ‘reasonable appraisal’ and ‘reasonable counselling’—but it fails to provide appropriate steps and guidance as to what actually constitutes ‘reasonable’. The government is trying to make what will be in practice a broad exclusion sound innocuous by including the word ‘reasonable’. The wording of the proposed section 5A betrays this intention; it requires that a ‘reasonable administrative action’ be conducted in ‘a reasonable manner’. This is poor drafting which will not assist employees or administrators to determine whether or not there is a valid claim for compensation.

There are other areas of the bill where Labor fears poor drafting will lead to compromising the scope of the scheme. For example, item 15 provides that the normal weekly earnings of an employee must be increased for the purposes of determining appropriate future payments. Whilst proposed section 8(9D) refers to ‘the index prescribed by the regulations’, no indication has been given as to the methodology, relevant factors or appropriate formula the government intends to use to calculate these wage increases.

Labor is concerned about the government’s recent tendency, particularly in relation to industrial relations and occupation health and safety legislation, to include important matters in the regulations, to be released only after the relevant bill has already passed through the parliament. We have seen problems with government bills. In fact, some 300-plus amendments to the Work Choices legislation were introduced in the Senate—that is, the government worked out what needed to be changed between voting for the legislation in the House and putting it into this chamber. We have also seen, under Work Choices and other legislation, the government including in the regulations and other delegated legislation a significant amount of detail that should have been in the primary legislation.

Another area of the bill which may present difficulties in practice is item 18, which changes the rules relating to when and where Comcare is to direct payments for medical and other services and says that Comcare can later recover the amount from any damages awarded to the employee. We are concerned that difficulties may arise in practice on three grounds as a result of these amendments. First, the bill does not require Comcare to inform employees when payment to a provider, and not to the employee, is to be made. Second, it is unclear whether Comcare or the employee will bear the burden of fees and charges arising from accounts paid outside the due date. Third, it is unclear from the text of the bill whether there is a mechanism for employees to receive information about the quantum of payments Comcare has made on their behalf so that they can monitor that information against any assessment of likely damages.

I want to touch briefly on superannuation, which is dealt with in clause 20(3). This sets out a formula for payment. The new formula provides that the weekly amount of compensation payable in accordance with clause 19 is reduced by the combined superannuation amount and five per cent of the employee’s normal weekly earnings. Those in the military are required to pay five per cent super contributions, so the reduction in relation to such employees is understandable, but many other Commonwealth employees are only required to pay a minimum two per cent contribution. As such, this could be considered unfair if they are only paying the minimum two per cent but are then deemed by this legislation to forfeit five per cent compensation. In our view, a fairer option would be to determine a person’s average contributions over their Comcare covered working career.

The Senate Standing Committee on Employment, Workplace Relations and Education, which considered this bill, had three days of hearings and received 28 submissions on the changes being considered in this bill. I note that my colleague Senator Marshall, who is the deputy chair of that committee, will be making a contribution in this debate shortly. The majority of those submissions expressed concern at the changes being made. The Howard government has linked these changes to future viability of the scheme and the explanatory memorandum to the bill states that the scheme is increasingly under pressure. But, as the dissenting report noted, the Comcare annual report 2005-06 reveals that the types of claims to be reduced or eliminated by this bill are not financially significant and are also decreasing. But, while they will have little impact upon the scheme’s viability, there is no doubt that their impact on employees will be potentially devastating.

The committee also heard and received evidence which supported the scheme’s ongoing and future viability. One of these sources was the 2006 Comparative performance monitoring report, the CPM report, which found:

• The Commonwealth jurisdiction has one of the best Assets to Liabilities Ratio;
• The Commonwealth jurisdiction has the lowest premium rate of any Australian jurisdiction;
• The scheme does not have escalating claims numbers or costs;
• The incidence rate and frequency rate of compensated claims in the Commonwealth jurisdiction is decreasing; and
• An actual analysis of claims costs for the Commonwealth jurisdiction shows little overall change.

From these statistics, the scheme appears to be operating on a perfectly acceptable cost basis and it is hard to understand why the government continues to assert that the scheme is in financial jeopardy.

In conclusion, I want to reiterate Labor’s concerns about the motivations behind this legislation. The bill before us today has as its principal objective the minimisation of the cost of work related injury and disease for the Comcare scheme. As I mentioned previously, the EM for this bill confirms that the savings to the scheme are substantial, with an estimated $20 million per annum to be saved as a result of these measures. These savings will not be reinvested in the scheme to ensure that its coverage is not compromised, nor will they ensure that cost shifts and gaps will not arise and leave workers under the scheme unprotected. Let us be clear who is contributing the $20 million: it arises out of workers who would otherwise have got the protection of this compensation scheme.

As I said at the outset, we question the government’s motivations behind this bill. We need to ask why it is that the foundations of a beneficial scheme appear to be reformed for new self-insurer entrants to the scheme. It has historically been the case that, through the evolution of occupational health and safety policy in this country, the overriding objective has been preventing workplace injury and illness. This principle has historically underpinned state and federal legislation in this area. The government’s objective in this bill departs from that longstanding approach. Instead, the government’s objective is to reduce the cost of the Comcare scheme by narrowing the eligibility criteria for compensation under the scheme. This in turn would decrease the number of injuries covered under the scheme.

Let us be clear: we are talking about not just abstract numbers but also workers who suffer injury and who will receive no or less compensation as a result of the bill which this government will push through this chamber. The $20 million that the government says it will save comes out of the compensation that would otherwise have been extended to employees. We consider the government’s approach to be wrong. It is the wrong approach to take a simple value proposition that places a premium on cost over rehabilitation. I indicate that at the committee stage Senator Marshall will be moving an amendment on behalf of the opposition in relation to the formulation of the rates.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Once again, we are presented with a bill from the government with the intention of watering down the rights and entitlements of workers. The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 is the next instalment in a long line of government interventions and legislative changes that undermine both industrial relations and occupational health and safety. In recent sittings, we have seen the Occupational Health and Safety (Commonwealth Employment) Amendment Bill, which dramatically reduced the role of unions in occupational health and safety arrangements in Commonwealth workplaces. It also greatly reduced the powers of Comcare and health and safety representatives in Commonwealth workplaces. The Greens argued very strongly at the time that we believed this would undermine safety in the workplace.

Then we had the Building and Construction Industry Improvement Bill and the Building and Construction Industry Improvement (Consequential and Transitional) Bill, which we believe impact very significantly on the ability of workers to look after safety in their workplaces. I remind the House that, on average, 50 deaths occur each year in unsafe workplaces on building sites; this is almost a death a week. At the time, we expressed concern—and we continue to express concern—that safety is being significantly undermined in building workplaces. We then had the amendments to the trade practices legislation in relation to independent contractors. We also indicated a great deal of concern for the safety of independent drivers.

The stated rationale for the current bill, the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill, is to maintain the financial viability of the workers compensation scheme established under the Safety, Rehabilitation and Compensation Act 1988. Yet there is no evidence to suggest the scheme is in danger. On the contrary, the Commonwealth workers compensation scheme is among the most effective in the country. Statistics from the 2006 Comparative performance monitoring report, the CPM report, cited in a number of submissions to the Senate inquiry into the bill, demonstrate:

• The Commonwealth jurisdiction has one of the best Assets to Liabilities Ratio;
• The Commonwealth jurisdiction has the lowest premium rate of any Australian jurisdiction;
• The scheme does not have escalating claims numbers or costs;
• The incidence rate and frequency rate of compensated claims in the Commonwealth jurisdiction is decreasing; and
• An actual analysis of claims costs for the Commonwealth jurisdiction shows little overall change.

To my mind, these amendments seem to be less about protecting an effective system of workers compensation and more about limiting and restricting the system to the detriment of workers.

It is also noteworthy that the bill is presented at a time when we see the expansion of the Commonwealth scheme to non-traditional government employers and encouragement by government for employers to leave state systems for the federal system. So we see the government expanding the system for employers and at the same time limiting access to the system for employees.

In speaking to these changes, I would like to particularly focus on three key aspects: the new definitions of ‘disease’ and ‘injury’, journey cover and off-site recess breaks, and calculation of retiree benefits. The minister in his second reading speech noted:

The definitions of ‘disease’ and ‘injury’ are of central importance ...

This is precisely why we believe the changes being proposed are of great concern. The changes to these two definitions have the potential to significantly limit access to the workers compensation scheme for what we believe are unjustifiable reasons.

The bill introduces a new definition of ‘disease’ which now requires that an ailment suffered by an employee or the aggravation of an existing ailment was contributed to to a ‘significant degree’ by the employee’s employment by the Commonwealth or a licensee. The bill goes on to define ‘significant degree’ as ‘substantially more than material’. The current definition refers to ‘a material degree’. This is a significant and unnecessary change. It is significant because it creates a much greater threshold test, which will mean many work related injuries will be excluded.

I am particularly concerned about the impact of the new definition on people with existing conditions, particularly psychological conditions, and also where multiple causes of injury are identified. As the CPSU put it in their submission:

The test presumes that it is possible to weigh the relative causes of an injury and arrive at some sort of quantitative assessment of the relative importance of each event. We believe this presumption is misconceived and extremely problematic, especially so in the context of mental illness. Mental and psychological illnesses often have multiple causes, and it is very difficult to determinatively assess the relative weight of each cause.

The new definitions of ‘disease’ and indeed ‘injury’ have the potential to discriminate against people with mental and psychological illnesses. The government attempts to justify this change by arguing that it returns to the original intent of the act—that is, that the person’s employment was ‘more than a contributing factor to the contraction of the disease’.

But it is an unnecessary change because in the recent Federal Court decision of Comcare v Canute 2005, French and Stone found that there must be a close connection between the disease and the employment. The current definition would therefore seem to be entirely adequate and in line with the intention of the act. Furthermore, as the Law Council of Australia comments in its submission to the inquiry into the bill, a new definition will require testing through litigation, whereas there is clarity as to the meaning of the current definition. I am also concerned that the new test will reduce the incentive for employers to maintain safe workplaces. Again, this is a particularly real concern for people who are predisposed to mental health problems, where there may well be less incentive for employers to provide sufficient support and appropriate staff management.

In a similar way, the proposed amendments to the definition of ‘injury’ seem directed at reducing access for people suffering psychological injuries in the workplace. The amendments to the definition of ‘injury’ exclude injuries suffered as a result of ‘reasonable administrative action’. This is an unjustified wide-ranging exclusion that could be read to exclude the effects of any management decisions. It is patently not fair to have such a broad exclusion which in effect allows management off the hook for the consequences of their actions. The changes to these two vital definitions will lead to people not being covered by the scheme who otherwise would have been covered—for no justifiable reason. Furthermore, it would seem that once again it will be the more vulnerable people in our community missing out.

The removal of claims for non-work related journeys, including journeys to and from work, and for off-site recess breaks demonstrates the real intention of this bill to be the elimination of employee rights. Journey cover and off-site rest breaks have been recognised within the scheme for a number of years, and it is merely a cost-shifting exercise to remove them now. The government’s reasoning for eliminating these claims is that employers have no control over such circumstances. There are a couple of points to be made on this reasoning. Firstly, it is illogical—employers also have no real control over work related journeys which are covered by the scheme. Secondly, it is a nonsense to say that journeys to and from work are not work related. Of course they are. Workers are required by their employers to travel to work, usually at given times.

The CFMEU make an important point in their submission to the inquiry: they have had many members injured travelling to and from work when fatigued after working long hours of overtime or doing arduous work. To cut off workers compensation in these circumstances reduces the incentive for employers to provide safe working conditions and shifts the cost from employers to the community. More importantly, the question of control is the wrong issue. Australia rightly has no-fault workers compensation systems. As the Communications Electrical and Plumbing Union submission explains:

Workers Compensation is beneficial legislation with an underlying premise of ‘no fault’. Arguments to exclude compensation on the basis that the employer has no control or fully complies introduces concepts which if extended would exclude many compensable claims and undermine the whole social framework of workers compensation legislation.

Any moves to water down the no-fault nature of workers compensation cannot be supported. Another aspect of making this amendment is that it also could act as a disincentive for physical activity and what could be termed as more ‘environmentally friendly’ forms of transport, such as walking and bicycle riding, and may as a result have adverse effects on the long-term health of workers.

The calculation of retiree benefits and the deduction of superannuation contributions is a major issue for, as I understand it, around 2,000 former public servants, as well of course for those into the future. The current arrangements have resulted in massive disadvantage to retirees under the scheme, with many receiving benefits well below the 75 per cent of normal weekly earnings which the scheme’s charter states as the safety net. The unfairness of the current situation and the fact that the changes proposed in the bill do not fix the problem are demonstrated by the experience of Mr Ian Emery. Mr Emery is currently receiving benefits at a rate of around 43 per cent of his former salary, significantly less than the 75 per cent safety net.

Rather than properly addressing this unfairness, the changes proposed in the bill entrench it. The bill proposes a five per cent deduction that replaces the current superannuation contribution deductions; a new calculation of deemed interest rates; and that the deemed rate applies to gross lump sum payments, not net payments.

There is no real justification for directly reducing entitlements for retirees from 75 per cent to 70 per cent. The five per cent decrease is described by the government as being for notional superannuation contributions. However, retirees are not making superannuation contributions, and they are not getting them returned. If these moneys—the five per cent—are really being deducted for superannuation contributions, as the government claims, then at the very least that money should be credited to the individuals, for example to their super fund.

The current deemed rates provisions of 10 per cent have been acknowledged as unfair. It is about time that the rates were amended. Unfortunately, the government’s response does not go far enough. The bill proposes that the minister may, by legislative instrument, specify the rate of weekly interest on the lump sum. The explanatory memorandum indicates that the intention is for the minister to use the 10-year government bond rate for the previous 12 months. Our concern with this provision is that it sets up a different measurement of deemed rates from those in other government agencies and will still result in higher rates than for persons who receive Centrelink or Veterans’ Affairs pensions.

The unfairness of the deemed interest rates is compounded by the fact that they are applied to the gross superannuation payment, not the net. Thus recipients are being disadvantaged by having amounts deducted that they would never have received. The upshot of the bill’s changes to how benefits for retirees are calculated is that unfairness and disadvantage are entrenched rather than properly addressed—again, another opportunity lost. The Greens oppose this bill and see it as another attempt to further disadvantage workers in this country.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

As Senator Wong has outlined in her contribution, Labor are opposed to the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, as indeed have we opposed other occupational health and safety bills that the government has put to the Senate. We believe that the best way to have cheaper workplace insurance premiums is through safer workplaces. Further, Labor believes that workers have the right to be fairly compensated for injury and disease related to their work and their workplaces.

The primary issue here, once again, is the government attacking workers’ entitlements. This time the motivation is cost cutting. In order to cut costs of Comcare, the government is cutting back on workers’ rights. The costs will still accrue, but instead of Comcare and employers being responsible it will be the workers, private insurance companies and the public health system that will be forced to meet the costs. Labor argues, as it always has, that the best solution for reducing workplace insurance costs is in fact safer workplaces. The government is—as it is on many issues—hell-bent on making the user pay. In this instance, it is the workforce.

While Comcare is increasingly under financial pressure, some of the claim types eliminated by this bill are falling and in any case impose no great burden on the scheme. As was noted by the Workplace Relations Ministers Council, the Commonwealth jurisdiction has one of the best assets to liabilities ratios; the Commonwealth jurisdiction has the lowest premium rate of any Australian jurisdiction; the scheme does not have escalating claims numbers or costs; the incidence rate and frequency rate of compensated claims in the Commonwealth jurisdiction are decreasing; and an actual analysis of claim costs for the Commonwealth jurisdiction shows little overall change. The urgent need to cut entitlements in this case is not clear, nor indeed, on the facts, is it justified.

The bill changes the definition of ‘disease’, requiring proof that employment has made a ‘significant’ rather than simply ‘material’ contribution to a disease for it to be compensable. The bill also changes the definition of ‘injury’ to exclude injuries arising from reasonable administrative action taken in a reasonable manner. The bill also specifically excludes the availability of compensation for stress arising from performance appraisals and counselling.

This in fact creates a new threshold. It tightens the test and limits the ability of workers to be compensated for injury. The notion of a proportional responsibility is missing. Where proportional responsibility is present, proportional liability should accrue. In this bill, it does not. This may pose, in some instances, some very serious problems. It reduces the onus on employers to ensure a safe workplace and working environment. Proportional responsibility acts as an encouragement to employers to apply safe practices and create a safe working environment. It provides protection for workers to assist recovery from injuries that are at least partly due to failings in their work environment.

In particular, for workers with mental health issues, pre-existing genetic dispositions or any underlying diseases, this may in effect deny them any protection whatsoever. In their submission to the inquiry, the Mental Health Council of Australia argued that the new test might exclude such employees from the statutory protections and prevent them from obtaining help and treatment, that employees might not disclose the nature of an illness for fear of workplace discrimination, and that the exclusions could result in a significant loss of productivity and experienced workers.

How is it fair that someone may be unable to be even partly compensated because there is some other contributing factor? How is it reasonable that the liability is privatised in this way? This may also mean that workers who would otherwise have been compensated to some degree and assisted with return-to-work plans will be denied this assistance in the future. The cost of their health care will pass on to the public health system. They may be forced to leave their employment and, with no help, fall back onto the welfare system. This is totally unacceptable and, further, it is un-Australian. Through unwillingness to help people in the workplace, we are paving their path from work to welfare. Labor is concerned about the exemption from claims where injury was a result of reasonable management action through performance appraisals and counselling. We note concerns by the Australian Manufacturing Workers Union that this might break the link between employers’ behaviour and the consequences of it. It removes incentives to create and follow good and fair processes in the workplace.

When an employee goes to work, they are not making the trip by choice. Over recent decades, it has simply been accepted that when an employee is injured in their journey to or from work, they can claim compensation. That is not unreasonable. It is something that is undeniably a part of the employment relationship. The employee has no choice in the matter; they are going to work and it is part of their working day. That they should not be compensated for an injury arising from their journey is an erosion of a basic right. The argument is made that employers do not exercise control over the worker’s trip to and from work, so it is unreasonable that they be liable. But the employee does not exercise control over this trip either. The time when they travel and the place they travel to are more or less beyond their control. The best solution is that the employee be covered for any injury under the no-fault workers compensation scheme. In this way, the priority is not on apportioning blame; it is on rehabilitation and a swift return to work. But the worker has the security of some cover in the event of an accident.

As the CEPU told the inquiry, employers’ arguments that they should not be liable because they are not at fault undermine the entire no-fault workers compensation system. Furthermore, for some workers, it is not clear what is a journey claim and what is not. People whose vehicles are essentially mobile workplaces have a special set of circumstances. For example, Telstra technicians are not in an office or another easily-defined workplace very often. For all intents and purposes, their vehicle is their workplace. They travel from job to job, and all the while they have no control over their whereabouts. For many, their workplace is garaged at their home. This narrowing of the definitions is troublesome. This bill gives no clarity or certainty to workers in so-called mobile workplaces like this.

Workers will also take time off for lunch and other breaks as mandated by enterprise agreements and so on. They will have a break, but they may not necessarily have a lunchroom. They may not have a canteen. If an employee goes off site—an example given in the inquiry was going over the road to eat a sandwich in a park—and is injured, they will not be covered. This is one of the more outrageous consequences of this bill.

The physical activity restrictions mean that such things as cycling to work or going to the workplace gym will no longer be covered. For example, imagine if a staffer hurts themselves in the Parliament House gym and is off work for some time with no compensation available. Or perhaps a worker is hurt in the course of a social game of squash over a lunch break. Woe betide the worker who rolls an ankle in the office lunchtime touch footy competition, because that person will not be covered. The employee may decide that the risk is not worth it and simply forgo the exercise. How much more of an impact will that have on the health of employees? When so many workplaces across the country are doing admirable work in encouraging a healthy and active workforce, this bill removes some of the necessary protections and will act to discourage this activity.

The basic thrust of this legislation is clear: either workers are restricted in their actions to those under the direct control and supervision of their employers, or they are not covered. They are not permitted to get a bite to eat, to go to the gym or even to drive to work with the security of knowing that, if something goes wrong, they will not bear the liability. Never mind that they do not choose the entirety of circumstances of their travel. Never mind that these things are, and have been, recognised as an essential part of the employment relationship. Instead, the potential liability is shrunk down as small as possible, and the risk for the worker increased.

The calculation of retirees’ incapacity benefits will change to take account of changes in interest rates and superannuation fund contributions. The Superannuated Commonwealth Officers Association argues that, for a small saving, the changes to calculations of retirees’ incapacity benefits will cost a small group a lot. Former Commonwealth employees will simply be subsidising the government’s liability from their own superannuation. A deeming rate is applied to pre-tax lump sum payments to calculate the appropriate sum to be paid in compensation payments. This is the rate of assumed earnings from superannuation and is intended to give an estimate of the amount a retiree will receive. At present, this rate is 10 per cent, which is significantly higher than actual interest rates and therefore artificially reduces compensation payments. This will reduce as a result of this bill, as I understand it, to the 10-year bond rate. But there is still an argument as to whether or not even that is the appropriate level at which it should be set. As has already been indicated, my colleague Senator Marshall will be moving an amendment to try to deal with this issue.

The CEPU argued that deemed interest rates used to calculate changes to benefits should reflect either actual interest rate expectations or deeming rates used by other legislative payments. The age pension or veterans service pension rates are preferable. The Superannuated Commonwealth Officers Association also argued that this deeming rate should be applied to the post-tax lump sum amount. It seems unreasonable in the extreme to make calculations on a pre-tax figure, as this overestimates the amount actually received. The calculations will therefore underestimate the appropriate compensation sum. It seems to me that this is just a mean act by a miserly government. The reduction of incapacity payments impacts on the ability of incapacitated employees to fund their retirement.

In conclusion, this bill further demonstrates the difference in approach of the Labor Party and the coalition. Where Labor seeks solutions that promote safer workplaces, the government seek to cut the rights and entitlements of workers. Where Labor pushes for commonsense arrangements, the government simply want to control. Either workers will be under the control of their employers or they will not be covered. This is both unreasonable and unfair. Workers should be appropriately compensated when their work contributes to an injury or disease. When workers are retired, they deserve to see the fruits of their savings rather than to see their superannuation subsidise government payments.

Like many of the bills we have seen since the government took control of this place, it demonstrates the difference between us and them. We believe in fairness; they do not. We believe in due process and just workplaces; they do not. We want to make work safe and give people the security of knowing that, if they are hurt at work, they are covered. The government do not.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, and I completely the endorse the comments of my colleagues Senator Wong and Senator George Campbell. The government’s motivation in respect of this piece of legislation, and other pieces of legislation that preceded it, is to establish a national workers compensation jurisdiction. Clearly that new workers compensation jurisdiction would be based on lower standards, the disempowerment of working people and the reduction of entitlements. All the preceding legislation and this legislation prove that very point. This bill clearly reduces benefits and makes people who are covered by the Comcare system or the licensing arrangements attached to the Comcare system worse off in respect of their entitlements to compensation for injuries.

Comcare was a Commonwealth Public Service compensation system. It was expanded to include corporatised bodies that were previously Commonwealth Public Service organisations. This government has now introduced legislation to provide licences to private companies to self-insure under the Comcare scheme. The licences will go to companies that have nothing to do with or have no relation to the Commonwealth public sector—for example, the National Australia Bank; Linfox; KNS Transport; John Holland, a construction company; and Optus.

The government is creating a scheme to duplicate those workers compensation arrangements at a state level. It is a scheme that will compete at a lower standard of care, that has the potential to lower benefits in order to attract more and more employers to a cheap workers compensation scheme in every aspect—namely, the premiums, compensation and conditions of those workers who are covered by that scheme.

Having said that, the government has introduced a couple of minor benefits too. I want to acknowledge them because we are often accused of looking only at the negative aspects of the bill and never recognising the positive ones. There are a couple of positive aspects. One is that, through this legislation, the government has increased the limit on the funeral benefit payment. It also introduces an administrative change—and a long overdue correction—to superannuation calculations. I will talk about that later in my contribution. As has been indicated, I will move an amendment in the committee stage that goes to that issue.

As we so often see with this government, it gives a very measly amount with one hand and gouges out entitlements and benefits with the other. The Labor Party look at the issues on balance and see the massive discrepancy between the advantages and the disadvantages. Thus we will oppose this bill, as we should, because it will significantly reduce the entitlements to people covered by the Comcare scheme.

As Senator Wong said, the overall cost savings to the government have been estimated to be around $20 million. Let us understand where that $20 million comes from. There is nothing in this bill that streamlines or makes more efficient the Comcare system to generate savings. Every single dollar of savings will be from a reduction of benefits paid to working people, from a reduction in the coverage—and I will go to some of those issues in a moment—and from a reduction in the sorts of diseases and injuries that will be compensable under the new scheme. When the $20 million per annum savings are realised by this scheme, it will have come out of the pockets of those workers covered by this scheme who have been injured or who are ill as a result of workplace incidents.

The first significant change that this bill introduces is to the definition of ‘disease’. If you were an employee covered by the Comcare scheme and you have a disease right now that has a work related component to it, then you can validly make a claim under the Comcare scheme but, under this bill, if you are an employee with a disease, you will not be able to make a claim under the Comcare scheme unless the work related component is a substantial component to that disease. In legal terms, that is a very significant difference. It means that the number of people entitled to make a claim will be reduced. That, of course, is the point of the amendment.

Comcare indicated to the Senate Standing Committee on Employment, Workplace Relations and Education inquiring into this legislation that its estimate is that there will be 2.5 per cent fewer claims eligible under the new definition, a saving in that area alone of $5 million per annum. That saving will grow as the scheme is expanded to include more employers. There is some significant dispute about the potential savings due to that change, but I thought it was important to put the department’s figures to the Senate. We can expect that to be the minimum saving—and the minimum disadvantage. The real disadvantage is potentially much greater. Many of the people who made submissions to the Senate inquiry indicated that their view is that it will be much greater than that.

A significant problem with this is that it will introduce some uncertainty into the claim system. In their submission to the committee, the Law Council of Australia was of the view that these changes will also result in a significant increase in litigation. The savings on the one hand that may be generated will potentially be lost because of increased litigation. That cost would not only be to Comcare, because half of the litigation costs will be borne by workers who have been injured but whose claims are denied because of the change to the definition.

The second significant reduction in benefits is the removal of journey accident cover. Right now, if you have an accident on the way to or from work you are covered. The employers and Comcare argue that the employer has no ability to control the environment on the route to and from work. As Senator Campbell rightly pointed out, neither does the employee. Going to and from work is a requirement of your employment. You are required to attend work as part of your employment, so the journey is at the request of the employer in the first place. The employers try to make a rational argument by saying that as they do not have any control over things outside their workplace then this scheme should not cover those journeys.

What we have is a no-fault system. All of the state workers compensation systems and the Comcare system are no-fault systems. If we want to view it simply, it is an insurance cover to insure people against accident and injury suffered while doing things associated with their work. Travel to and from your work is clearly associated with your work. Given that it is a no-fault system, the government has given no rationale as to why they want to take this away. Going to and from work is part of your employment obligations. Insurance to cover you for accident, injury and illness on your way to and from work is the way that a no-fault system works.

If we do not have that, what will happen is that those costs will be transferred to others. If you are in a motor vehicle accident, for instance, the traffic accident commissions in many states will have some sort of overarching cover. But if you are not in a vehicle and you have an injury or illness and are unable to go to work, eventually you will find yourself in the welfare system. The cost savings to the Comcare scheme will potentially be put back onto the community and the taxpayer. That is what we say. A no-fault system should not allow that transfer of cost. This is why workers compensation systems have been set up as no-fault systems: to provide that overall insurance for people.

As Senator Campbell rightly pointed out, it is difficult now in the modern workplace to determine what a journey to and from work is. There are many people whose workplaces are in fact their vehicle. As a former electrician, I know the difficulty with determining that. If you get a call-out at night and you must go and fix a piece of machinery which is required urgently, when do you commence work? Do you commence work when you get in your vehicle to drive to the job, or do you commence work when you get to the job? Many people, especially those in the trades areas and other service industries—people in Telstra, for instance—get their job by computer at home. They start work on the job. They rarely go to a depot. When does work start? Is it when they get to the first job that has been allocated for the day, wherever that may be, or when they leave home? This will introduce more litigation to determine what the legal status of those things is. If there is preparation done for the job—preparing material, doing paperwork—before people get into the vehicle to attend the job, how is that coped with? We say that this introduces an enormous grey area which will mean more litigation and will simply disadvantage people who work in those situations.

The third concern is that this legislation removes the right to make a claim where there has been ‘a reasonable administrative action taken by the employer’. While this sounds reasonable on the surface, employers will never admit that their administrative actions are unreasonable. If people take those actions, they must say that they are at all times reasonable. But, in my experience in the workplace, I have often seen where these sorts of administrative actions are used to bully and harass people. We have talked about performance appraisals and about how they are being used to bully and harass people. I have seen this regularly. It is well documented around the place. I have seen how administrative action is used sometimes to stress people in order to encourage them to leave. I have seen people who, as a result of restructures, have been placed in windowless offices and given nothing to do for months on end, causing enormous stress to them. Yet the employers will always argue in those situations that these are reasonable administrative actions. We believe that the definition goes too far.

Quoting from the Hansard of the Law Council of Australia’s evidence to the committee inquiry, this is what they said about it:

Those provisions would apply to all diseases and may catch a range of other events. Our main concern regarding the focus on such a broad definition of administrative action is that the concept of ‘reasonable’ really introduces a fault based notion into a no-fault scheme. What you end up with is an investigation of whether what happened was a reasonable thing to happen or not in a scheme that is clearly designed as a safety net no-fault scheme.

They go on to say:

Our concern is—one of the provisions is that it is cost saving—that it will simply lead to greater litigation as the question of reasonableness or otherwise of this administrative action is litigated.

So, again, while the government says that there will be some cost savings about these things which they claim to be reasonable, potentially the cost savings are removed or costs are incurred due to the increased litigation around these very broad questions of law.

The fourth area is the removal of workers compensation during lunch or rest breaks. I find it quite unfathomable that the government seeks to withdraw this compensation. Let me go back again and say that this is a no-fault system. It is an insurance system that provides coverage for people during their work and work related activities. The same thing that I have said about journey accidents applies to rest breaks. If you remain in the lunch room at work, you are covered. If you go out to a shop to buy your lunch, which you would only do because you are at your workplace, you are not covered. If you want to take your lunch across the road to the park, you are not covered for any injuries or illnesses that occur during that process.

I come back to the example of people who have mobile workplaces. If you are a Telstra technician, for instance, and you are on the road from the beginning of your shift to the end of your shift doing repairs, construction or installation or fixing faults—whatever it is that you are doing—there is no provision to return to the depot to eat your lunch in the so-called safety of the employer’s environment. Of course you eat your lunch on the road. The employer insists upon that. The employer would not tolerate people returning to a depot. If you are in one of the major metropolitan cities, it could take at least an hour to return to your depot. If you pull up in a park or on the side of the road to eat your lunch, you are simply not covered in those situations anymore. I think that is grossly unfair.

The government does not apply this principle equally across the board. I have not had an opportunity to go through the government’s amendments in detail, but they make it clear that if you are attending a place of education, for instance, you will be covered. I think you ought to be, and I am not arguing that you should not be, but the government clearly is not applying the principle of removing that coverage equitably. I will listen with interest to see if the government can explain why the situation is different for those attending places of education and those at work. The issue remains that it is outside of the employer’s control.

The other point I want to touch on briefly—I will be talking about it in much more detail in the Committee of the Whole—is that of deeming rates. As I said at the outset, this is a long overdue amendment. Many people have been significantly disadvantaged by the 10 per cent deeming rate that has been applied over the last 10 years. This amendment is long overdue. There is an argument about what the deeming rate for superannuation lump sum payments ought to be in the mix of your overall payment, but clearly 10 per cent was a ridiculous amount. Finally the government has acknowledged that; I welcome that. But people have been disadvantaged over a long period of time. I want to table a document before the committee stage so that government members who may want to contribute to this debate have an opportunity to see it. I seek leave to table that document.

Leave granted.

The document is an example provided by the department through Comcare. It was as a result of a scenario that was provided by the Law Council to our committee. Comcare took it away and did their own calculations. While the calculations are in dispute, the principle of the disadvantage is not. The intention of the act was to provide people with 75 per cent of normal weekly earnings. I have tabled the case study of Daryl, and this is the department’s response to that. In the example, the normal weekly earnings of Daryl were $1,038 a week; therefore 75 per cent of his weekly earnings was $778.50. On permanent disability, Daryl received $242,000-odd as a superannuation lump sum payout. Interest was applied to the pre-tax payout at a rate of 10 per cent. He was also required to pay another five per cent superannuation contribution, deducting in total $518.22 from his 75 per cent of average weekly earnings, leaving Daryl with $260.28. The effect of these amendments—we will talk more about that—will improve Daryl’s situation by $206.97. (Time expired)

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

On occasions the second reading debate contributions on bills are of varying quality. But I must say I have enjoyed listening to those second reading debate contributions I have heard to date on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 because I think they have been well and comprehensively presented. In particular, a number of opposition senators have made contributions reflecting a very practical experience of the issues at hand. So I for one have valued their contribution. I valued too the minority report written by the opposition senators. It was well constructed. It happened to be double the size of the government senators’ report. Of course, quantity does not always equal quality; but in this case it certainly did. It covered the matters as they should be covered.

The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, which amends the Safety, Rehabilitation and Compensation Act 1988, aims to amend the act to maintain the financial viability of the Commonwealth workers compensation scheme. In other words, this amending bill is about money. If in fact the Comcare scheme is not under the pressure that the government maintains it is, it brings into contention many of the criticisms as to its motive and outcomes. The government believes the scheme is under growing pressure from increasing numbers of accepted claims, longer average claim duration and higher claim costs.

The main amendments will amend the definition of ‘disease’ to a higher threshold, to mean an injury which was caused or aggravated by work to a ‘significant degree’; amend the definition of ‘injury’ to exclude injuries arising from ‘reasonable’ administrative action; remove claims for non-work related journeys and recess breaks; amend the calculation of retirees’ incapacity benefits vis-a-vis changes in interest rates and super fund contributions; update measures for calculating benefits for employees that include definitions of earnings and super schemes; ensure that all potential earnings from suitable employment can be taken into account when determining incapacity payments; enable determining authorities to directly reimburse health care providers; and increase the maximum funeral benefits payable under the scheme.

My conclusion from the evidence presented to the committee is that there is insufficient evidence of a significant threat to the financial viability of the scheme. The scheme itself is in good shape, and the financial statements indicate that. The major effect of the change encapsulated in this bill appears to be a reduction in costs to the Commonwealth and employers and a shifting of those costs to the employees affected by injury—and, of course, to the taxpayer through the broader welfare benefits system. While the bill addresses some inequities in the deeming rate used to calculate benefits, these are not retrospective; and it does not satisfy the criticisms that have been levelled against this process.

The changes to the key definitions of ‘disease’ and ‘injury’ tighten access for injured employees to the scheme. The matters of a lack of clarity in the new provisions; non-coverage of journey claims, physical activity and off-site recess breaks; and notional superannuation contributions and suitable employment were raised in evidence given to the Senate Standing Committee on Employment, Workplace Relations and Education. That committee report came down on 20 February 2007.

The Democrats’ policy is to strike a balance between the legitimate interests of unions, workers and employers. This bill does not achieve that. This bill will further reduce access to the scheme, reduce the fair access which presently exists and erode the compensation component payable to workers; all, as far as we can see, on an unnecessary basis. Amongst those expressing an opinion on the bill, Australian Air Express, Telstra and the Australian Lawyers Alliance supported the bill or aspects of it. The ACTU, CPSU, AMWU, CEPU, CFMEU, RTBU, the Law Council, SCOA, AFDO, the Mental Health Council and others opposed the bill or parts of it.

This bill will pass because the coalition has the numbers in the Senate. Many people still do not realise what that means and naively expect modern members of the coalition to exercise a conscience vote. I had an email conversation with a concerned citizen, who had received supporting noises from a Liberal senator and thought this senator might stop this bill. He also thought that Senator Fielding’s vote mattered. In part I answered: ‘If Senator Fielding is opposed to the bill, then you have to get two members of the coalition—Liberal or Nationals—to vote against the bill. In my experience, apart from the courageous Senator Joyce, the rest of the coalition senators almost never do that. If Senator Fielding supports the bill, you need three coalition members to vote against the bill. That is just not going to happen. Sorry, but that’s how it is.’

The reason I have drawn the attention of the chamber, and those who are interested in this bill and are listening, to those remarks I made is that you simply cannot presently adjust bills in this chamber under the philosophy of the present coalition government, which does not routinely allow conscience votes. This will not happen unless you give the control of the Senate back to non-government parties. Those who are affected detrimentally by this bill—and they number hundreds and hundreds of thousands of potential claimants—need to understand that, because in the next election they need to cast their vote away from the control of the Senate being held by the government.

So when, not if, this bill is passed, it will have the effect of stripping away terms and conditions of workers as they relate to work related injury and sickness. It will also erode the compensation payable to workers. For these reasons, the Democrats take issue with this part of the government’s continuing industrial relations crusade to wind back worker entitlements and conditions. We oppose it because it goes beyond useful reform and efficiencies. We oppose it because it, once again, shifts costs from a specific agency and mechanism dealing with issues back to the taxpayer community at large. It is not good public policy.

The bill is the government’s formal response to the Productivity Commission’s latest recommendations for changes required in the area of occupational health and safety. The point to be made is that continuing reform and review are necessary, but the policy principles which have applied in key areas like this have to be maintained. Back in September 2004, in the Journal of Australian Political Economy, Kevin Purse, Frances Meredith and Robert Guthrie wrote an article titled ‘Neoliberalism, workers’ compensation and the Productivity Commission’. They said of the commission:

The real significance of its contribution lies in the fact that it provides a veneer of legitimacy for a neo-liberal political agenda designed to curtail the entitlements of those unfortunate enough to be injured as a result of their employment.

That may be a little unkind to the Productivity Commission as a general view of its work, but it does in many respects accurately reflect the intent of this bill. The government is up-front about its intent, which is explained in the explanatory memorandum as being the desire to decrease the number of injuries covered by the Comcare scheme—note: ‘to decrease the number covered’ not to decrease the number of injuries. The number of injuries is going to continue as before; they are just not going to be covered in the same way as they were before.

If, as the government argues, the Comcare scheme is under threat because of the added pressures from increasing claims, the answer should not lie with reducing the rights and protections available to workers and employees. The answer should lie elsewhere with, for instance, a better resourced Comcare or, if necessary, increased levies from employers—which, in my view, are not warranted because the system is viable; right now, it is financially strong—or, preferably, and most importantly, measures to prevent injury and disease in the first place.

It is not necessary to impose other measures, as there is insufficient evidence that there is a significant threat to the financial viability of the scheme. It appears, then, that these reforms will only accompany cost reduction and cost shifting and, therefore, lowering levels of protection for workers and workplaces covered by the Commonwealth.

Most concerning of the reforms are the principal amendments under item 11 that change the definitions of ‘injury’ and ‘disease’ for the purpose of the act. These changes are indeed telling because they will narrow the circumstances under which employees may claim compensation. For a worker to be compensated, he or she will have to show that their injury or disease has a connection with their workplace to a ‘significant degree’. At present, a ‘material contribution’ is used as a definition.

What is in a couple of words? In this case, a great deal. ‘Significant degree’ is defined as ‘a degree that is substantially more than material’. The quantitative and qualitative significance of this shift of definition may turn out to be high. It does not stop there. The definition of ‘injury’ will also exclude injuries stemming from what is considered reasonable administrative action taken in a reasonable manner. An exhaustive list is provided of matters that would fall under the term ‘reasonable administrative action’ as actions relating to appraisals, counselling and the suspension and discipline of employees.

However, the bill provides no guidance as to what is ‘reasonable’—an omission that leaves it open for a very broad interpretation that is unlikely to benefit employees. I am aware that the issue of ‘reasonableness’ has a very broad history of jurisprudential analysis and commentary. The government may well argue that they do not need to define ‘reasonable’ but it does seem odd that ‘reasonable administrative action’ would get an exhaustive list and ‘reasonable’ otherwise does not with respect to this bill.

Underpinning this part of the bill appears to be the rather misleading assumption that managerial behaviour is likely to be beyond reproach; that the question of fault could be impartially decided by employers within the scheme. The situation worsens for workers under item 12. It will be the case that claims for injuries sustained while travelling between home and work will no longer be possible, which, as has been clearly outlined, is most unfair in many circumstances. Surely, a number of injuries acquired while travelling to or from work are intrinsically work related? What of the situation where a worker is injured, even killed, when returning home at night extremely fatigued from an extended and arduous shift at the request of the employer? Should not this person and his or her family be compensated? As we know, many people from white-collar workers all the way through to blue-collar workers use their vehicle as a workplace. An architect who is employed by an architectural firm outside a building site is as much using his car as an office as is a Telstra person attending a fault.

The bill retains various travel situations that will remain covered, such as attending places of work related education; obtaining a medical certificate or receiving treatment; and undergoing medical examinations or rehabilitation. Nonetheless, other situations could arise that would cause coverage confusion or should be legitimately covered in these circumstances. If a worker were to sustain an injury during temporary absences on meal breaks, would workers face those problems? It is thought that employers have no control over activities during such breaks; but, as has been outlined by previous speakers, this could be sometimes yes, and sometimes very definitely no.

By removing most journey claims from coverage, the government succeeds in narrowing the range of workplace injuries that Comcare is liable for; it will not—and that is the point—narrow the range of workplace injuries that will continue to occur. So there will be more injuries or the same number of injuries but a lower level of coverage. Once again, this is a shift from a specific process and an institution that is able to cope with those matters at present to a broader welfare or taxpayer supported system. It is a significant cost-shift back to state governments—and, in some respects, back to the federal government—to cover through compulsory third-party claims and the federal government through the Centrelink welfare system.

The Democrats take no issue with the amendments relating to increasing the maximum benefits for funerals and updating the ways in which a retiree’s incapacity benefits are calculated by taking into account interest rate changes. It is typical of many bills that you oppose that they contain elements that you support—and these are such elements that we do support.

However, the amendments that provide a reference scale for adjusting employee entitlements in line with the definitions of ‘normal weekly earnings’ and ‘superannuation schemes’ are troubling, as are those that allow determining authorities to directly reimburse healthcare providers for their service costs. Although less contentious, they are troubling because of the lack of detail about the formula that will be used to calculate entitlements and the lack of clarity to do with the changing rules regarding the direct payment of medical bills by Comcare. The bill leaves gaps in coverage and contains uncertainties, and that can only lead to future problems. But the overwhelming problem with this bill, which is far too harsh for what is necessary, is that it limits the criteria by which workers can claim compensation in the event of a plausible workplace related injury or illness. Its passing will seriously undermine progress made to date in occupational health and safety policy in Australia. It is a clear step backwards.

The Democrats do not support the bill, because it goes beyond useful reforms and efficiencies. The Democrats do not support the bill because there has been little evidence to back the government’s claims of addressing a significant threat to the scheme’s financial viability. The Democrats do not support the bill, because it will result in unnecessary outcomes of reduced access and employee conditions, and poorer outcomes for injured workers. We say to the government: you had adequate notice from the opposition senators’ report and from the committee hearings that adjustments needed to be made to this bill. We say to the government: it is still possible for you, at the end of the second reading debate, to suspend debate of this bill and go away to adjust the bill to ameliorate some of its worst outcomes. What you are facing otherwise is that, when there is an inevitable change of government, either in the next election or later, these provisions will be overturned. You would be far better getting the common agreement of the Senate to reforms and efficiencies that are necessary with respect to Comcare—they will always be necessary, because you can advance these things—than shoving through something that is obviously strongly opposed by the Labor Party. They are the alternative government, and, if they are elected in November, I would expect them to overturn it—and I hope to hear from the Labor opposition a commitment to do exactly that.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 seeks to make a range of amendments to the principal act. It amends the definition of ‘injury’, linking that to workplace causation; excludes injuries arising from reasonable administrative action; removes claims for non-work related journeys and other workplace absences; amends the calculation of retirees’ incapacity pay; updates measures for calculating benefits for employees; ensures that potential earnings are not taken into account in calculating incapacity pay for ex-Commonwealth employees; enables Comcare to directly reimburse health providers; and increases funeral benefits to $9,000. Put simply, it is a quick-fix bill to some longstanding problems. But it does not take us to underlying policy issues. When this legislation first became law in 1986, it was then a new benchmark in workers compensation. It followed consideration of a single workers compensation scheme, but this is still a dream. This bill does not address any such vision. It is typical of the short-term thinking plaguing the policy minds in a range of areas of members of this government.

There are a number of features of policy in the act which this bill amends. First, the public employer must be insured with Comcare and pay a premium based on the claims experience of that employer. Second, the emphasis is also on rehabilitation before permanent disability is assessed. Third, medical costs must be paid. Fourth, compensation must be fair. Incapacity payments must also accurately reflect other residual income-earning capacity. Sadly, many of these principles are not well understood and may be unfair in practice. That is because disability compensation, by definition, is a complex matter.

To begin with, medical science is far from perfect. It is almost impossible in any regulatory regime to predict future events and developments with substantial discretion being the rule of thumb. Every claimant’s circumstances are different and, as with all no-fault schemes, one size has to fit many. The successful rehabilitation of the injured can vary and future income-earning capacity is not counted. The only way to achieve satisfaction for that, though, is through common-law action for damages. As we know, this can take many years at a huge cost. The current scheme is the best we have devised to date, but it does need regular finetuning.

There are a number of themes in the framework that can be seen in this amending bill. They come into play when there is any finetuning, as with this bill. The most obvious with the bill is industrial relations—that is, entitlements of employees to protection from injury and for health care and compensation when that protection fails. That is generally considered to be the basis of no fault, and that is why legislation such as this is considered by many to be a threat to working conditions.

Next, there are the economic arguments, and we should be looking carefully at all costs of production to maintain Australia in a competitive position. Good employers, reasonable employers, rational employers know that reasonable occupational health and safety saves money. They freely accept their social and industrial responsibility. But we know these practices and ideals are often not honoured. There are plenty of employers around who are only too willing to have their costs covered by others. It happens within organisations as well—for example, wastage through medical discharge in Australia’s armed forces in recent years. We know that this practice was rampant. In short, the attitude to workplace injury was to go for medical discharge of the injured person and then find a quick replacement. That avoided the trouble of supervising rehabilitation and the necessary and consequential return to work. It was also a device to get rid of perceived troublemakers. The cost of this waste was, of course, borne by the ADF and by the taxpayer in due course. There was not any unit accountability, so the problem was endemic, sustained and consistent and remained untreated. Something needed to be done. Fortunately, it is fair to say that there seems to have been some improvement within Defence on this angle in recent times. That is apparent as the new OH&S regime becomes operational.

Debate interrupted.