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Thursday, 5 April 2001
Page: 26547

Mr BEVIS (11:44 AM) — When this matter was being discussed before the adjournment last night, I was making the point that the Commonwealth scheme is a very effective and efficient scheme with very low premiums—in fact, the lowest premium rate of any scheme in the country—and with a declining number of claims as a percentage of employee numbers. Given that background, we could not see the motivation or the need for the far more restrictive definition as proposed to be given to injury and illness in the amendments and therefore will not be supporting those changes. I have an additional comment in relation to that specific point from my contribution last night and it flows from the reference to Brian Howe's speech in 1988, which has been cited as an example of why the government amendments are in keeping with a long-held view.

At the time Labor proposed those provisions, Commonwealth expenditure on workers compensation had increased by over 700 per cent in a 10-year period. However, the workers compensation scheme is now self-funded, but premiums, as I said, are the lowest in Australia and claims are falling. It is quite understandable why Brian Howe, in 1988, would hold the view he expressed in his second reading speech against a background of cost increases at a rate of 700 per cent over 10 years. Clearly, the 13 years since have demonstrated that the new system that was put in place has addressed those cost pressures. I think the government needs to advance a much stronger case in relation to the restrictions on injury and illness than it has today.

I turn now to the issue of non-economic loss. On its face, the present act does not permit employees to claim compensation for injuries occurring before 1 December 1988, if compensation was not payable under the 1971 act. On that basis, an employee who suffered non-economic loss prior to 1 December 1988 would never be able to claim compensation because that was not covered in the 1971 act. This bill seeks to limit statutory claims for non-economic loss to permanent impairments occurring on or after 1 December 1988. Claims for impairments arising before that date are only valid if an application for compensation is made before the introduction of the bill. The purpose is clearly to reverse what I think would be described as a liberal interpretation given to the provisions relating to non-economic loss which has allowed claims for impairments before 1 December 1988. However, we will not support those provisions in their current guise. We oppose these provisions as they are an attempt to restrict old act claims for non-economic loss whilst, at the same time, continue to use the old table of rates for compensation, which has not been indexed. It does seem to be a `heads we win, tails you lose' arrangement, and the government might like to revisit that issue. Certainly, until such time as that table has been indexed, we think the proposal is too one-sided and we will not support it.

I now move to the question of stress claims. Currently, under the act, an injury does not include an injury, disease or aggravation caused by `reasonable disciplinary action taken against the employee' or `failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment'. That definition is to be amended by this bill to include other activities which are regarded as `normal managerial activities'. The new subsection 5B(1) provides that a disease, injury or aggravation shall not be an injury for the purposes of the act if it is suffered as a result of, firstly, reasonable appraisal of the employee's performance or, secondly, any reasonable counselling actions taken in respect of employment or any reasonable suspension actions or, thirdly, any reasonable disciplinary action, whether formal or informal or, fourthly, a failure to obtain a promotion, reclassification, transfer or benefit.

The government did attempt to amend these provisions in 1996. Essentially, those amendments sought to preclude stress claims if they arose predominantly out of reasonable managerial or administrative actions that were undertaken. At the time, Labor's spokesperson, Bob McMullan, opposed the amendment and made these comments:

First, the changes to the circumstance in which compensation can be claimed are too severe. The changes will exclude many legitimate claims both for stress related injury and for other injury for which the Commonwealth, as the employer, should have an obligation to pay compensation. Second, the justification the minister has put forward for the changes—that the cost attached to stress claims has grave implications for the future sustainability of the scheme—does not seem to have any validity.

Three years on from that contribution by my colleague Bob McMullan there is confirmation of his assessment at the time that there were no cost pressures that would justify this change. I might say at the outset that this proposal did have some initial attraction, and I can understand the superficial attraction of removing as a compensable injury or illness something arising from what is described as normal management activities. However, if you take the time to consider where that leads us, it provides a serious degradation of the operation of the compensation scheme. There are many quite reasonable, normal managerial activities that would be required of workers in a whole range of environments—that is, the management is not acting in an improper way or seeking to have the workers perform duties that would not be reasonably expected of them. Notwithstanding the fact that the management activity is reasonable and normal, it is not uncommon for an illness or an injury to occur in the actual conduct of those duties. If the parliament is going to make an exemption so that workers do not get compensation on the grounds that the activity they were undertaking was in pursuit of normal management activities, then frankly we open a door that would totally undermine the fabric of the compensation system. So we have some serious concerns about the road that this amendment would take us down and again would not support it.

I congratulate the government on their initiative in the bill to bring up to speed, or at least closer to the mark, the provisions with respect to hearing loss. The bill provides greater access to compensation for employees who suffer hearing loss. Presently an employee requires a hearing loss of more than 20 per cent before that loss is compensable. This bill will reduce that to 10 per cent. That 10 per cent figure is comparable with Victoria, Tasmania and Western Australia. However, we note that South Australia, Queensland and the Northern Territory operate a five per cent threshold, and that New South Wales operates a six per cent threshold. Therefore we believe, with a scheme that is clearly operating on a more cost-effective basis than any other in Australia, it is not unreasonable for the Commonwealth scheme to offer the same benefit as most of the states—South Australia, Queensland and the Northern Territory—and certainly closer to New South Wales, and we will be moving an amendment to alter that to five per cent, although it has to be acknowledged that the reduction from 20 per cent to 10 per cent is clearly an improvement.

We will also be opposing the government's attempts to have a requirement that, after that initial hearing loss is made, claimants have to suffer hearing losses in increments of five per cent. We do not consider that, just because an initial claim is made, a worker who suffers a further four per cent loss should be precluded from getting any compensation for that additional loss. I do not think there is any sensible administrative reason behind that. I am not sure what the rationale for that particular adjustment is. But I make this observation about how I think it will operate in practice, if indeed it is introduced. I think you will find, remarkably, that doctors will certify people as having lost hearing in increments of five per cent. I say this genuinely to the government. I am not quire sure what the motivation is for picking a five per cent threshold for subsequent claims, but whatever that motivation is I think in practical terms it will not work. I cannot see the justification for it. As I said, if someone has a four per cent additional loss of hearing I do not see why they should not get compensation for that four per cent loss. I do not see why five per cent is a magical figure. But if indeed that is applied I would be willing to wager that most claimants will, quite miraculously, discover that their hearing loss has been in increments of five per cent anyway. I think it is an unenforceable provision and unjustified. So I strongly urge the government to rethink that.

Finally, I want to make a quick comment about the question of consultation. I did give my thanks at the outset for the consultation and the briefings that were made available to the opposition and I repeat those thanks again here. However, the explanatory memorandum does comment that there was wide consultation with bodies involved. I put on the record that that is not our understanding. Our advice is that there was very little, if any, consultation with the ACTU—the trade union movement—about this bill. I understand that some considerable time ago there had been some discussion, but in terms of the matters that have been brought before the parliament now it is not the case that consultation occurred. That may have been an oversight. It is in everybody's interests in matters of this kind that the departments, the people who administer these things and the people who are involved in representing the interests of the workers should all be consulted. My advice—contrary to the assertion in the explanatory memorandum—is that this did not occur.

There are a number of other provisions in this bill which the Labor Party will support, and I imagine it will be a matter for some discussion in detail in the Senate—although I will during the consideration of the bill in detail in this House be moving a series of amendments to give effect to those matters that I have raised in the second reading debate. I would anticipate that there will be a careful scrutiny of these issues in the Senate. There may be further evidence, information and argument that the government want to advance in respect of those matters that we have flagged. I should say, however, that we are not minded to restrict access to compensation for workers without very strong and good cause. We are certainly not minded to do that against a background of a scheme which, by any measure, has not only operated very effectively in addressing the occupational health concerns of the Commonwealth but also done that efficiently in a very low-cost manner. I think the government will need to revisit those issues if it wishes to see those aspects of the bill looked on with any favour.