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Thursday, 5 April 2001
Page: 26559


Mr MOSSFIELD (12:46 PM) —It gives me great pleasure to be taking part in the debate on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2000. This is a very complex bill. What does it do and why? Leaving aside the industrial chemical section, which is generally fairly minor and very technical, I will concentrate on issues relating to safety, rehabilitation and compensation. The bill makes a number of changes to the compensation regime for Commonwealth employees. Some of these changes Labor is supporting and some we are opposing. I said in a speech in this House in June 1997 that—again, referring to employees who come under this legislation—of all the benefits the trade union movement has won for the working people of this country over a long period, there are certainly none more important than workers compensation. This bill gives me the opportunity of striking a blow for the trade union movement, particularly in view of the major attacks on trade unions and on the people involved with them that we hear every question time. In view of that, it is worth while recognising the valuable work that the trade union movement does in relation to workers compensation.

This bill covers, principally, 206,000 employees of the Australian government, Telstra, Australia Post, the Australian defence forces and the ACT government. I have some concerns that some of the changes being proposed in this legislation are designed to reduce the basic safety net entitlements of workers compensation. In the speech that I have referred to that I made in 1997, I spoke about the government's intention to change the safety, rehabilitation and compensation legislation to make it harder to claim compensation, and this legislation has proved me correct. We must remember that this bill is specifically aimed at Commonwealth employees and no-one else. I feel that government members often forget that they are the employers of more than just their own personal staff. They are employers of the entire Commonwealth Public Service, and the political decisions that they take affect those employees, and this bill certainly does.

This probably comes back to the stress related issues that are contained in this bill and to our reluctance on this side of the House to compromise in the area of stress, because stress, whether it is caused by a decision of an immediate employer or whether it is caused by a government decision, is stress. If stress happens in the workplace, irrespective of the reasons, we believe it should be fully compensatable—which I think is the current decision—and the government is trying to alter that.

Some of the other changes proposed in this bill clearly demonstrate that, as employers, the government and government members care little about the rights of their employees to fair compensation for work related disease and injury. However, I am willing to grant that there are some positives in this bill. Labor is supporting measures such as extending access to workers compensation to people aged 63 and over. It is an anomaly in the legislation that currently all workers compensation for Commonwealth employees ceases at 63. This arbitrary age is a puzzling one. I would question why the drafters of the legislation chose it but, seeing that we are now changing it in this bill, the question is moot. Labor is supporting the changes to the hearing loss rules. At present a person must suffer 20 per cent loss before they are compensated. This bill changes that to 10 per cent and brings it in line with Victoria, Western Australia and Tasmania. The shadow minister has moved an amendment to this legislation to reduce that figure to five per cent. Five per cent of hearing loss is compensatable in South Australia, the Northern Territory and Queensland, and six per cent in New South Wales. Whatever the final figure is—whether it is five per cent or 10 per cent—it will be better than the current 20 per cent hearing loss required at present.

However, there are a number of other measures within this bill that the Labor Party will not be supporting. We will not support the erosion of workers' rights. It is as simple as that. Let me just say that, because of my background in the trade union movement, I feel very strongly about protecting what we have won over a long period of time. Once again, in defending the role of trade unions, and even the role of people who were previously trade union officials and are now in this place, I make the observation that there are more lawyers on the government side of the House than there are union officials on our side. Given the choice of union official or lawyer, I know which one I would choose. I know which profession cares more about people, about their working conditions and about their financial situation, their safety and their wellbeing—and, of course, union fees are a lot cheaper than legal fees.

Government members and ministers who spend much of their time bashing the trade union movement and the people who work in it should remember that there are a lot more lawyers here than there are union officials. As a representative of my constituents and as someone who has fought most of his life for the rights of workers, I will not stand idly by and watch the achievements gained over many years eroded by this heartless government. What this legislation does in a very technical way is reduce access to workers compensation for workers incapacitated as a result of their employment. This legislation makes changes to the definition of what a disease is and what an injury is. It gets very technical in defining each term. It also makes the onus of proof that any such disease or injury is indeed work related, and therefore compensatable, that much more difficult.

Currently, the Safety, Rehabilitation and Compensation Act sets out separate tests for establishing entitlements to compensation for disease and injury. A disease requires employment to be a material contribution before it is compensatable, whereas an injury is only required to occur at work. Court decisions have held that a natural progression of disease which causes a disease at work is compensatable. The easiest example of this is someone with a history of heart attacks who has a heart attack at work. That would be compensatable under the act.

This bill seeks to overcome these court decisions, and any injury caused as a natural progression of a disease not associated with work would not be considered an injury under the act and there would be no workers compensation payable. The government are claiming that the reason that they are doing this is that the original intent of the legislation introduced by Labor in 1988 has been subverted by the courts. The obvious question I would ask is: why is the government so interested in enforcing Labor's intent? When have they ever been interested in making sure Labor's policies have been introduced and enforced in full?

There must be another reason, and there is. It is the sheer bloodymindedness of an ideologically driven government that seeks to destroy the entitlements and rights that workers and their unions have achieved over a period of time. It must be, because there is no economic argument for making it harder to claim compensation. In the 10 years before the introduction of the act in 1988, Commonwealth expenditure on workers compensation had increased by over 700 per cent and there was a real problem. However, now the situation is very different. The scheme is self-funded and the premiums are the lowest in Australia, currently at one per cent. In Western Australia and the ACT they are over three per cent and in New South Wales, South Australia and Tasmania they are all nudging the three per cent mark. Only in Queensland are they less than two per cent: currently they are around 1.8 or 1.9 per cent.

We must also realise that the number of claims is already dropping, and has been since 1991. Recent figures bear this out. In 1996 there were 28,807 claims; in 2000 there were fewer than 20,000 claims. This was not achieved by making it harder to claim via legislation, such as this is attempting to do; it was achieved with the introduction of occupational health and safety legislation and the subsequent action on that issue. The focus shifted away from compensation and into prevention, which, as we all agree, is always better than cure. There is no need for these changes: the scheme is not under threat.

Another problem with going into such detail and complexity, as the government does with this legislation, is that the victim's costs of claiming compensation will go up. The more technical you are and the more demands you place on determining the connection between the injury or disease and the employment, the more you are reliant on medical assessment—expensive medical assessment. How is a `contributing factor', a `close connection' or a `material degree' different from each other? Who decides? There will be the employee's doctor and the employer's doctor and of course they will not agree, so there are other experts to be called in, all at great expense.

The amendments in this bill will result in a more restrictive regime than any of the states currently have. This legislation will result not only in a blow-out in medical expenses but also in a blow-out in legal expenses. When the rules are made very complex and technical, more disputes will arise as people disagree over whether or not they qualify for compensation: one doctor says one thing and another doctor says another thing. Where does it wind up? It winds up in the court of law as challenges to rulings are made. The more complex the definitions and legislation are, the more lawyers will charge to sort them out and the individual cases will last longer, which again adds to the expense.

Here we can use the current situation in New South Wales, where its government is attempting to redraft its WorkCover legislation. One of the major problems there, and I quote from an article in the Sydney Morning Herald on 28 March, is that lawyers now earn almost as much as injured workers from WorkCover, taking $422 million a year—compared with $438 million in benefit payments—almost equal to the amount of money that the workers get out of being injured. That, I would suggest, is one of the difficulties that we may also find in this piece of legislation, that the legal costs will explode.

Lost productivity and costs are also associated with properly conducting a court case. Some years ago, as a union official, I witnessed an industrial accident and I volunteered to be a witness for the injured worker. I was invited to go down to the workers compensation tribunal. I went down there on three or four mornings, a couple of afternoons, a day here and a day there. It all added up to lost productivity as far as I was concerned, and also for my employer. In the end, I was not called to give evidence. So that shows you that there is some inefficiency in how workers compensation is carried out on the legal side. This legislation has the potential to exacerbate the situation that I have just referred to. We currently have a compensation regime that is more efficient and costs less than the state schemes, but this bill will make the compensation scheme harder and more costly to access. It does not make any sense without looking at it from a purely ideological point of view.

There are many within the government, particularly cabinet members, that are far greater ideologues than anyone on our side of the House. They say, `Damn the torpedoes. Let's just get the worker.' I think that relates to the previous minister for industrial relations, the new Minister for Defence, who seems to forget that no business can function without somebody working there. Workers create the profits for the companies—it is as simple as that. Yet this government at every turn seeks to destroy the wages, conditions and entitlements and protection that workers have won over a number of years. Some of this legislation is good and some of it is very technical but, like much of the government's agenda, it is mostly anti-worker.

My contribution so far relates to my own experience and is based on the information that we have been provided through the shadow minister, the trade union movement and the Bills Digest. I once again recognise the role that the trade union movement plays in all aspects of the industrial legislation, particularly in compensation. I notice that in his contribution the shadow minister commented that the trade unions had not been greatly involved in drawing up this legislation. If that is the case, that is certainly a shame.

I would like to finalise a couple of points that relate generally to workers compensation, particularly for people who work for the government. One issue that has caused confusion amongst people who receive a settlement for a compensatable injury is the difference between compensation for non-economic loss, which is for pain and suffering and loss of quality of life, and compensation for economic loss. There are two clear distinctions here: non-economic loss and economic loss. Compensation for non-economic loss is made solely for the pain and suffering and expenses resulting from an injury. It also is paid for loss of limb or impairment and for loss of enjoyment of life. It does not contain any amount to compensate the person for lost earnings or lost capacity to earn as a result of an injury. Compensation for economic loss is for exactly that—the loss of income.

Many compensation cases are based on a lump sum out-of-court settlement. In such cases, it is usually taken that 50 per cent of the lump sum is for economic loss and 50 per cent is seen as compensation for medical expenses, legal fees, pain and suffering. That 50 per cent economic loss component is then divided by a single person's cut-off figure under the pension income test—currently $543.63 per week—to set the number of weeks for which this sum provides replacement earnings. A number of my constituents who have received out-of-court settlements for injuries are not aware that 50 per cent of that settlement will be used as income replacement, which will affect their social service payments.

It seems to be a weakness in the system that injured workers are not advised of this, and in many cases they go away from the court feeling as though they have got a lot more out of it than they actually have. On other occasions, they spend a lot of the money they receive for economic loss on maybe fixing up the house, on family related expenses or on other things only to find that they have not got sufficient money to actually see their way through. Many such people agree to a settlement under duress, in that they are advised that the figure offered is the maximum they can get and that if they proceed with a court settlement they may get less. This is something that would cause considerable stress also. The worker who has been involved in a case for a long period of time reaches the point where they have got to make that decision, and they act then on the advice of their advisers. Whether it is right or not, I do not know.

The period for which income replacement applies is referred to as the `preclusion period'. The member for Lalor, in her contribution, raised this point. It does appear that this problem is fairly widespread. Injured workers whose preclusion period spans the introduction of the GST also suffer a further economic loss in that their preclusion period is based on the pre-GST income test rate of $422.90 per week and no adjustment is made to take into account the post-GST income test rate of $543 per week, which would result in a reduction in the preclusion period and therefore an earlier entitlement to social security if they were unable to continue work. This seems to be a major concern amongst workers, and for those people whose precluded period spans the introduction of the GST there is certainly a disadvantage. This, once again, shows how the GST is affecting many aspects of the lives of working people. It is quite possible that this was unintended initially, but the government has been asked to fix it up. I have actually put a motion on notice regarding this issue. (Time expired)

Debate (on motion by Mr Sciacca) adjourned.