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Thursday, 5 April 2001
Page: 26550


Mr CAMERON THOMPSON (11:57 AM) —Today we are discussing the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2000. This bill amends a couple of different pieces of legislation. I want to speak most directly about the amendments that this bill makes to the Safety, Rehabilitation and Compensation Act 1988, which provides the legislative basis for the Commonwealth Public Service workers compensation scheme.

The SRC Act provides compensation and rehabilitation for injuries and diseases leading to death, incapacity or impairment. That is its basic function. It provides the capacity for such things as weekly incapacity payments, lump sum compensation for permanent impairment, lump sum compensation for non-economic loss, lump sum compensation and benefits for the dependents of the deceased, and the provision of household and attendant care services and rehabilitation.

Of course, the benefits that accrue to workers under this scheme are based on the degree and duration of the incapacity. It is appropriate then, when looking to make amendments to these bills, that the government seeks to balance a fair system of compensation together with a fair system of assessing that compensation. The government is to be congratulated for taking a responsible attitude to that and also for making a fair assessment of its own responsibility to provide a scheme that is funded adequately and that represents good value to the taxpayers of Australia who want to see injured workers properly compensated and want to see an effective system of compensation in place.

In looking at the background to this bill, I note that prior to the establishment of the act that is currently in place, the SRC Act, there was an earlier act in 1971. That particular act had a different style, a different modus operandi, when it came to assessing people's capacity to access compensation and those other benefits that are provided by the compensation scheme. It is interesting to note that, under that 1971 act, between 1976 and 1986 expenditure on compensation by the Commonwealth increased by 700 per cent, from $25.04 million to $203.29 million per annum. This was the period under that 1971 act, the Compensation (Commonwealth Government Employees) Act 1971. Under that act, a worker needed only to demonstrate that their employment was a contributing factor to the contraction of a disease. You can see that that particular wording is quite loose, and I think it is fair to say that having that fairly opaque and non-prescriptive description of the involvement of a worker's employment in their capacity to access compensation was very much a contributing factor to the subsequent blow-out in the expenditure on workers compensation. This illustrates very clearly the obligation that remains on the government to try and balance access to that area with the natural requirements of a government to be very frugal with taxpayers' dollars and to use those dollars responsibly; in other words, to have an effective compensation scheme but not to have it operating in some sort of profligate way.

In some of the documentation that has been circulated among members looking at this particular bill, it is interesting to note that the number of claims being received by Comcare, which is the body that administers the SRC Act on behalf of the Safety, Rehabilitation and Compensation Commission, between 1995-96 and 1999-2000 has actually fallen by more than half. There were 15,657 in 1995-96 and 6,488 in 1999-2000. If we divide that up and look at some of the specific areas, stress claims fell from 1,846 to 620, which is about a third of that 1995-96 figure. That is a significant fall. Occupational overuse syndrome—I suppose RSI is what they are referring to there—fell from 1,550 to 795 and back injuries from 2,709 to 1,037. Obviously there has been a significant falling away of claims, and it is interesting to speculate as to what the reason might be. In trying to come to grips with this, I looked at the table and it struck me that there was one column, multiple injuries, where there was not that direct or general slide downwards in terms of the number of claims. Multiple injuries, for example, began in 1995-96 at the number of 49 and completed the term at 41. In the interim it had gone up and down to numbers like 20 and 60; it was all over the place.

It seems that some of these things are affected by not only the manifestation of the illness but also the culture of the workplace. I think that some of these issues—about whether people are aware of occupational overuse syndrome, for example, or whether they believe that stress is a big issue—can impact on the number of claims. I think it is very positive to note that overall decline in the number of claims. I do not think that you can make the same generalisation about multiple injuries, however, so it is interesting to compare the different rates of the number of claims being received.

One of the tables that was shown in the Bills Digest was very interesting with regard to cultures. The table provided in the Bills Digest on page 29 assesses the incident rate of injuries by jurisdiction and duration per thousand employees. It is interesting to note that the highest rates, by quite a margin, of injuries by jurisdiction and duration per thousand employees were in the ACT. That includes injuries that persisted for a period of five days or more, 30 days or more or 60 days or more. In all of those three categories, the rates are significantly higher in the ACT than in any other jurisdiction.

Interestingly, at the other end of the scale was the Commonwealth. The Commonwealth had the lowest numbers in all of those three categories. It is interesting to see the difference in culture that applies over that time. There is some reason why the ACT is more prone to having a higher number of injuries and a longer duration of their impact, and there is a reason why the Commonwealth's rate is lower; I would submit that it is largely cultural. It behoves the people administering the schemes—in other words, the governments in particular—to strive to maintain a culture in which the period of injury is reduced and the process back into rehabilitation and back into the workplace is expedited. That is something that clearly the Commonwealth is doing a very good job of, certainly in recent years.

I would like to go to a second table—the table on page 28, which covers in particular the Commonwealth scheme profile. Bear in mind what a wonderful record—according to the table on page 29—the Commonwealth has; it is obviously doing something very right. But, when we look at the performance of the Commonwealth over the period and, particularly, at the total workers compensation costs, as a gauge of what is going on, we see that the total workers compensation costs increased every year in the period from 1990 through to 1994-95 and then declined right through from 1995 to 1999. There is a little bit of a kicker at the end in 2000, where it is marginally up, but it is an interesting demonstration of the overall health of the system and the way in which it is operating. When costs are going up like that, there is a very real danger that the administration of the scheme can go beyond the pale and slip out of control, and it is necessary that governments watch it very carefully. So I am naturally very proud, as a member of this government, to be able to say that the period at which it transferred from sliding upwards in terms of costs to coming back down occurred at the time when this government was elected. I believe that this government has been very effective in getting the culture right of how people deal with these issues.

You do no want to deny someone the right to be able to access adequate compensation, particularly rehabilitation, to get back to work should they desire it, should they need it. Anyone injured in the workplace has a right to be able to get that. You do not want frivolous claims to come forward, and you want to be sure that people, when they are in the workplace, are keen to be there to work, to proceed, to provide for their families and to do all those sorts of things, and not to be worried about the consequences of an ill-administered scheme. You do not want some members to be tempted by some thought of malingering or to move off into a scheme because of the potential payouts they see that they might get. It is that culture of the workplace that this government has got right and that I think is overwhelmingly reflected in the figures I have just referred to.

The changes that are being made under this bill to the Safety, Rehabilitation and Compensation Act basically clarify benefits for employees through amendments to that act. It enables earnings to be deducted from compensation that otherwise would be payable. It enables the normal weekly earnings of employees no longer employed to be indexed so as to standardise the calculation of the first 45 weeks entitlement to incapacity payments. It enables changes to the definition of the words `injury' and `disease', in particular to establish a requirement that it be demonstrated that employment made a material contribution to the condition. It also means that compensation is not payable for injury resulting from reasonable counselling in relation to performance. In other words, if there has been counselling to an employee about their performance, that should not result in compensation being payable.

It is unfortunate that, as things stand at the moment, it is possible for an employee who is underperforming and who receives counselling from their employer to make a claim. But what else would you expect if that were the case? It behoves the employer to tell their employee what problems they may have with their performance. If, as a result of that the employee claims it is stressing them out and a claim is issued, the way things stand at the moment, compensation can be paid. I do not think that is necessarily right. We cannot have a situation where underperforming employees are never told and are allowed to continue to underperform. There has to be a degree of rigour in the workplace and it is wrong that, in the process of giving counselling or, indeed, terminating employment at the end of it all, a claim can be made. As things stand at the moment, if a termination occurs it can result in a claim for compensation because of the stress, difficulty, high blood pressure or whatever else the employee may say has been brought about in their system. I do not think that is right at all.

It is right that this bill should set out to try to clarify that and to make it clearly understood on all sides. It means that there would be no access to lump sum payments for economic loss from impairment prior to December 1988. It also enables—and this is quite significant—those employees over 63 years of age to receive benefits. We are obviously recognising that age is not a barrier to employment and older employees should be entitled to benefits. That is something that this bill facilitates. It provides greater access to benefits for impairment caused by hearing loss. I heard the opposition spokesman applauding that move, and suggesting some additional changes that he would like to make. Whichever way you look at it, recognising hearing loss as an important area of impairment is a good outcome, and is something that should be dealt with adequately.

It allows the dependants of a deceased worker to take common law action, and it ensures that people providing rehabilitative treatment and services meet necessary standards and that Comcare will oversee the establishment of the standards that those people would be required to meet. Standards across the system and accountability for those standards are becoming more clearly recognised, and it is appropriate that they should apply in this area. One other thing is that we do have changes in the licensing arrangements, with a generic licence replacing five specific licences. In itself, I do not think that is significance, but it is worthy of note. The bill does make changes to the Industrial Chemicals (Notification and Assessment) Act 1989 but, as I understand it, those changes are mostly technical and minor.

The bill sets about endeavouring to balance the cost of work related injury with access to fair compensation and rehabilitation for injured workers. I believe the change being introduced by the government will keep the system accountable and effective. If there is going to be an effective compensation scheme, it has to work hand in glove with the needs of the employees themselves, and I think this legislation recognises a lot of those difficulties that currently exist and targets them for change.

I note the comments in the Bills Digest from the Public Sector Union lament the fact that, because the system is currently operating in a financially stable manner, there is no need to make those changes. I do not think that is an appropriate way to look at the situation. It is important that we continue to look at our obligations and, regardless of the stability of the scheme, look at making the scheme better. I think that is the aim of this bill and that it is going about it in an effective and practical manner, and I certainly commend the bill to the House.