Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I will resume my comments on the Safety, Rehabilitation and Compensation Legislation Amendment (Exit Arrangements) Bill 2015. After listening carefully yesterday to the debate on all sides of this chamber I repeat that I am absolutely impressed, yet appalled, at the ability of those people on the other side to complicate a very simple, straightforward procedural bill.

In summary, getting rid of all the rhetoric from those opposite, the substance of this bill is very simple. The ACT, 12 months ago—in fact, Senator Gallagher is here at the moment, who actually requested, as Chief minister, to exit the scheme. That was absolutely the ACT's right to do so. However, it was discovered subsequently that there is a gap in the legislation and that when the ACT does exit the scheme it means it will leave the Commonwealth with existing liability. This bill is simply to close that gap, to make sure that when the ACT exercises its right to exit this scheme that workers' rights are protected—that those who have been injured are protected—and that the ACT taxpayer takes on the responsibility for this rather than the Commonwealth taxpayer.

Just in conclusion: the amendments in this bill will enable Comcare to calculate the liabilities of an existing employer and issue them with a levy to ensure that these liabilities are covered once the employer leaves the scheme. This will ensure that the Commonwealth is not left to pick up the tab for the employer after they have left the scheme. The contributions will be determined on a cost-recovery basis, so the bill will not allow the Commonwealth to recover any more than what is owing in order to make a profit on the exit fees.

It will also ensure that employees who are injured before their employer leaves the scheme will continue to receive compensation from Comcare on the same terms, and ongoing support in their rehabilitation and on their return to work. That is what this bill is about. Despite what Senator Ludwig said yesterday—bringing in two other bills and trying to overly complicate and muddy this issue—it is as simple as I have just outlined. It is simply to make sure that when the ACT exits this scheme that the employees are covered, and that the ACT picks up the bill—not the Commonwealth.

This bill also amends provisions related to the Safety, Rehabilitation and Compensation Commission to deal with the representation on the commission should the ACT exercise their right to leave the scheme. As the ACT currently sits on the commission, it also aligns the appointment process with other comparable appointments to enable appointments to be made by the minister with the approval of the Prime Minister and without the additional step of requiring approval from the Governor-General. This is a common-sense streamlining of the amendment.

In conclusion, I think this is a very simple, straightforward bill that is important not only to protect the Commonwealth taxpayer but also to ensure that those employees under the current scheme are protected if and when the ACT exits this scheme. I commend the bill to the Senate.

Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

I rise to sum up the debate on this particular piece of legislation. The Safety, Rehabilitation and Compensation Legislation Amendment (Exit Arrangements) Bill 2015 will amend the Safety, Rehabilitation and Compensation Act 1988—the SRC Act—to manage the exit of the ACT government and any Commonwealth authorities should they choose to exit the Comcare scheme. The bill is essentially administrative in nature and closes a loophole in existing legislation.

I am going to take this opportunity to correct some of the blatant mistruths about this legislation that those across from me in the chamber have basically stated during the debate on this bill. The bill, whilst it is administrative in nature, is an important piece of legislation and will provide certainty for the ACT, ACT employees, Comcare and the taxpayer. The bill simply says that, if you are going to leave the Comcare scheme, you need to make sure you cover your liabilities. It does nothing more and nothing less. It is very simple. In doing so, the bill ensures that the ACT's ongoing liabilities are funded, meaning that remaining employers will not suffer premium increases simply because another employer, as is their right, chooses to leave the Comcare scheme. It will also ensure that employees who are injured continue to have their rehabilitation and their compensation through Comcare provided.

The bill extends not only to the ACT should it leave the scheme but to any other Commonwealth authority should they also choose to exit the Comcare scheme. The exit arrangements in the bill are not novel; they appear in similar terms in state legislation. There is nothing novel about making someone cover their debts. In fact, I would say it is very good policy to make sure someone who chooses to exit a scheme is made to cover their debts. The bill is about financial accountability. It is as simple and straightforward as that, not as some on the other side would have you believe.

In terms of the myths that have been raised during debate on what is, effectively, an administrative bill, I want to confirm that the bill does not privatise the Comcare scheme. None of the government's legislation on Comcare that is before this parliament privatises the Comcare scheme. This bill does not impact employee entitlements or change the benefits provided to workers under the Comcare scheme. In fact, it actually protects the entitlements of workers and provides certainty for workers should their employer, as is their right, exercise the option to exit the Comcare scheme. The bill does not take out of Comcare employees injured before the employer leaves the scheme. In fact, it gives them certainty and provides for their ongoing rehabilitation under Comcare. It does not impact the premium pool of the scheme should the ACT exit the scheme. The exit contributions it must make will contribute to the premium pool. Not passing the bill, however—and this is very important to note—will have a negative impact on the premium pool. The bill does not force the ACT to leave the scheme, nor does it encourage or incentivise it to do so. Likewise, it does not force or encourage any other Commonwealth authority to exit the scheme.

Finally, the bill is not about premium payers leaving the state and territory worker compensation schemes to join the Comcare scheme. Let me emphasise that that is a completely separate issue. The bill will not lead to a reduction in the premium pool in the state and territory schemes.

The Comcare scheme outstanding claims liabilities currently exceed the funds available to meet those liabilities. This bill is going to ensure that employers do not leave the Comcare scheme without covering the costs of their claimed liabilities for their employees who have incurred work related injuries or illnesses. Without this bill there could be insufficient funds to cover current or prospective claims, made by employees, which would then have to be picked up by the Australian taxpayer. In addition, employers could leave the scheme and, effectively, abandon their responsibility to ill or injured staff.

It will support current measures that Comcare has in place to restore scheme funds to adequate levels and will ensure that employers remaining in the scheme are not penalised with higher costs to meet the liabilities of other employers that have chosen to leave the scheme. Likewise, the bill does not allow the Commonwealth to recover more than it needs to fund actual liabilities, meaning that there are no profits to be made on the exit fees. There are currently no provisions in the SRC Act requiring exiting premium payers to meet rehabilitation responsibilities for their employees who have been injured. Importantly, this bill will ensure that employees injured before the employers exit continue to be supported by an appropriate rehabilitation scheme. This bill in fact protects the rehabilitation rights of employees.

The bill, as you would be aware, has been the subject of a Senate committee inquiry, and the committee recommended that the bill be passed. The Senate committee noted that maintaining the financial sustainability of the Comcare scheme through appropriate exit contributions is essential to ensuring the long-term sustainability of the scheme to pay claims and to support injured workers. The committee was satisfied that the bill will not change any existing benefits or entitlements for injured workers. The committee noted that the bill will ensure that employees injured before a Commonwealth authority exits the Comcare scheme will continue to receive compensation and rehabilitation under the scheme, and indeed Labor senators on the committee broadly supported the legislation, which is obviously welcome.

That said, there were some submissions to the committee that unfortunately indicated that some people and organisations completely misunderstand the effect of the exit arrangements bill. If the bill is not passed, the effect will be that the liability of the exiting employer—in this case, the ACT government, and Senator Gallagher is in the chamber today and obviously was the Chief Minister at the time that the ACT government put in their request to exit the scheme, as is their right to do—will fall onto the Commonwealth and the Australian taxpayer. Employees who are injured before their employer exits the Comcare scheme will have no rehabilitation authority to support their recovery and return to work. It is therefore critical that we close this gap, to provide certainty for workers and to prevent the taxpayer from covering the cost of Commonwealth employers who leave the scheme.

The ACT government, I note, supports the bill and is keen for it to be passed so it has certainty about the exit arrangements that will apply to it and its workers. The decision to leave Comcare is a decision for the ACT government. The Commonwealth has no power to stop the ACT government from exiting the Comcare scheme. Nor does the Commonwealth have the ability to influence the arrangements that the ACT ultimately puts in place. The bill, as I have stated, though, does not just relate to the possible exit of the ACT government from the Comcare scheme; it will cover the exit of any Commonwealth authority. What it will do is protect existing employees and premium payers, thereby closing this loophole in relation to liabilities once and for all. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.