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Wednesday, 4 April 2001
Page: 26458


Mr BEVIS (7:19 PM) —I want to acknowledge at the outset the cooperation and assistance of the department in providing a briefing and to thank the minister for facilitating that briefing for me and my staff on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2000. I believe this bill was before a Senate committee at the end of last week, and we will be looking with some interest at the evidence presented to that inquiry and at the comments made by the various senators as they went through that evidence. There are a number of provisions in this bill that, on the face of it, we will have no difficulty in supporting and that I would not anticipate that the Senate inquiry would identify as areas of concern to us. However, there are a number of important matters that we have difficulty with and that at this stage it would be our intention to oppose. Given the restrictions on time, I propose to devote most of my contribution to identifying those areas of concern. That is not to say that there are not other areas of the bill which we support, but it would probably facilitate the process if I identify those areas where there may be or are significant disagreements.

One of the key aspects of the bill addresses the definition of disease and injury and what constitutes a compensable disease or injury. The change in the definition will mean that injuries related to a compensable disease brought about, for example, by a stroke or a heart attack will not be compensable unless it can be established that employment contributed in a material degree. That in itself is no change and is not in any way significantly different from the operations of similar schemes at a state level. However, material degree is then further defined as having a `close connection' with the employee's employment. Certain elements are then set out that define what a close connection is. They require that, in determining a close connection, the following be taken into account: the duration of employment, medical predisposition rather than the usual test of taking the employee as one finds them, activities outside work and, indeed, any other matters. We believe that these amendments will result in a more restricted definition, and one which is more restrictive than any in similar state jurisdictions. We are concerned with that and cannot support it.

I should also express some concern about the application of `medical predisposition' as a definition. I am not sure exactly what may be in mind in handling `medical predisposition', but it does throw up a number of interesting questions. For example, in life insurance, when someone takes out life insurance they are required to disclose previous health conditions and answer specific questions. Failure to do so has been the subject of litigation when compensation has subsequently been sought from those insurance policies. At the other end of the continuum, `medical predisposition' might go to a consideration of a genetic tendency to a disease which would be identified, for example, through DNA testing. In the current world of rapidly changing medical science, there is a concern about precisely what would be identified as `a medical predisposition'. Certainly, any suggestion that people are going to be DNA printed, as it were—identified as having a predisposition to a certain ailment and then finding themselves unable to get compensation as a result—would be a worry. I do not think that that is what is intended, but I am not sure that there is anything that would stop that happening. In any event, the test that is applied by restricting it to `a close connection' and then further identifying what `a close connection' is, does impose a test more onerous than exists generally in other like schemes as the state level.

One of the things that I imagine will be advanced by the government—and I think has in the past been advanced in support of the proposition that we need to tighten up on the definition of `injury and illness'—relies upon statements made by the former Labor government in 1988 in a second reading speech by the then minister, Brian Howe. Brian Howe said this in dealing with the bill that was then before the parliament:

An employee will not be required to show that his or her employment caused the disease, or even that it was the most important factor in the contraction of the disease. It is intended that the test will require an employee to demonstrate that his or her employment was more than a mere contributing factor in the contraction of the disease. Accordingly, it will be necessary for an employee to show that there is a close connection between the disease and the employment in which he or she was engaged.

Minister Howe went on and said:

In determining whether employment contributed in a material degree to the contraction of a disease in a particular case, regard would be had to whether the employment in which the employee was engaged carried an inherent risk of the employee contracting the disease in question and whether some characteristic or feature of the employment tended to cause, aggravate or accelerate the disease.

Those comments were recently considered by the AAT in Derek Ernest Bessey v. the Australian Postal Corporation. The senior member of the tribunal, Mr Peter Bayne, noted:

Looking at the Minister's speech, all that may be said is that a “material” contribution is one that is more than a “mere” contribution, but less than the “most important factor in the contribution”.

He went on and said:

This does not take the matter very far.

I can understand why the government would want to tighten up on that provision, but it is not, in the final analysis, the definition that we think is fair and reasonable in the circumstances and, as I said, it goes beyond the position adopted by all of the state schemes.

There are two important things that have transpired since 1988 when Brian Howe made those comments, although I do note that the context in which he referred to `close connection' is slightly different to that in which the government now proposes to use those words. Leaving that aside, there are two important factors that have occurred since then. The first and obvious one is that we have had the experience of the last 13 years to actually observe the operation of the fund and to have a look at the claims history, costs and the premiums required. We no longer have to speculate about that—we now have information. But, importantly, subsequent to 1988, the former Labor government established the Occupational Health and Safety (Commonwealth Employment) Act 1991, which put in place a structure of prevention to go hand-in-hand with the compensation provisions that are principally part of the legislation we are now dealing with.

If you have a look at the operation of the scheme, you find that the Commonwealth scheme is probably the best by most yardsticks. The claims received and accepted as a percentage of employee numbers is actually declining and is low. In 1996-97, the claims were about 6.18 per cent of employee numbers. In 1997-98, it dropped to 5.59 per cent, the following year to 4.76 per cent and in the last year recorded—1999-2000—to 5.34 per cent. That is, there is a downward trend of claims as a percentage of the work force. That is a good outcome. I would argue that it is in no small way due to the structure of occupational health and safety committees that operate throughout the public sector.

Equally impressive is the premium rate applied by the Commonwealth for its scheme. It is the lowest of any in the country. There are a number of reasons for that, some of which are to do with profile and so on, but it also says something about the operation of the scheme and the occupational health and safety committees. The Commonwealth scheme has a compensation premium rate of just one per cent. To put that in some perspective, the ACT government's is 3.1 per cent, Western Australia's is 3 per cent, South Australia's is 2.9 per cent, New South Wales's is 2.8 per cent, Victoria's is 2.2 per cent, and Queensland's—where I know my home state boasts a very good record—is still on 1.8 per cent. So the premium rate applied to fund the Commonwealth scheme is very low in comparison and clearly demonstrates that the scheme is functioning very well. I seek leave to continue my remarks at a later time.

Leave granted; debate adjourned.