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Thursday, 18 September 2008
Page: 7919

Mr HARTSUYKER (Deputy Manager of Opposition Business) (12:34 PM) —At the outset, let me say that I fully support moves towards the rationalisation of workers compensation and occupational health and safety and towards making our workplaces safer. We need to do all we can to ensure that workplace accidents are kept to an absolute minimum and that, when accidents do happen, those affected can easily access financial support while they are unable to work and the physical support necessary to achieve a return to work whenever possible. Safe Work Australia is tasked with developing national policy, monitoring legislation and codes of practice, developing consistent enforcement policies and raising awareness of health and safety at work. It will report to the Workplace Relations Ministers Council. If Safe Work Australia achieves these aims, it will be a step forward.

However, the government should be aiming higher and trying to overcome the obstacles to reform that have existed for many years. The Safe Work Australia Bill 2008 will not do that. After looking more closely at what we should be trying to achieve, I would like to raise some issues with the structure of Safe Work Australia and then examine the political obstacles that will provide a test for the government and its good intentions. At the heart of this bill is the need to reform Australia’s systems of workers compensation and occupational health and safety with the overarching problem that each state and territory maintains its own regime, with Comcare operating at a federal level. This multiplicity of regimes imposes an unnecessary burden on any company operating interstate, without any corresponding benefit for employees. Indeed, in terms of the competitiveness of our economy, one could argue that employees are disadvantaged by reduced job security. For instance, Optus has calculated that a single national self-insurance scheme for occupational health and safety alone would save up to $2 million of its $6 million annual workers compensation costs. Insurance Australia Group estimates that multiple schemes added some $10.1 million to the cost of setting up its national IT platform and cost about $1.7 million annually to run.

As long ago as 2006, the Productivity Commission calculated that a reduction in regulatory compliance costs could result in a saving of $8 billion a year—0.8 per cent of GDP—through developing a national approach to policy making in a range of areas. Australia has a population of just 21 million, and we are trying to compete with countries like China and India, which have huge and potentially profitable internal markets and vast export potential, yet we handicap ourselves with these unnecessary costs. The European Union, with its population approaching 500 million and its diversity of languages and cultures, is continually rationalising across national boundaries.

We have been slow historically in dealing with inconsistencies between our states, and we continue to drag our heels. Our failure to rationalise, to put aside state and sectional interests for the national good, is holding Australia back. The benefits to the health service, say, of saving nearly one per cent of GDP, as I mentioned, would be substantial. What if these resources were diverted to our schools? What if savings of that order could be offset against the cost of an emissions trading scheme or invested in clean and renewable energy production? It is high time we put the national interest above state interests.

Of course, this kind of reform has been on the agenda of the Council of Australian Governments for some time, but it has to be said that there has been little progress to date. The cynic might suggest that the coalition government was never going to make any headway in transferring powers from Labor run states, even if it was good for the nation—and I would suggest they were right. Turkeys do not vote for Christmas—and don’t we have some turkeys running our states and territories! In the last few weeks, however, the cosy position of wall-to-wall Labor administrations has been looking less secure, as voters have indicated their desire that the turkeys should be plucked and stuffed. Western Australia is certainly a notable example. In the meantime, as we await further opportunities at the ballot box, we surely have the right to expect some progress.

I acknowledge that the aims of Safe Work Australia do represent some progress—but do they go far enough? I note that Safe Work Australia will ‘prepare, monitor and revise model occupational health and safety legislation and model codes of practice’ and ‘develop a compliance and enforcement policy to ensure nationally consistent regulatory approaches across all jurisdictions’. The adoption by all states and territories of model legislation would at least mean that companies operating interstate would only have to comply with one set of requirements in the workplace. However, it would still mean dealing with a different jurisdiction in each state and territory. Any changes to the model legislation would have to be enacted in each state or territory, with the distinct possibility that differences would again arise between jurisdictions because of different legislative timetables.

Consistent enforcement policies would also be welcome. I am sure that we have all heard stories of how inspections on one side of a state border can result in a warning, advice and a follow-up visit, whilst, on the other side of that border, the same set of circumstances results in immediate prosecution. Any move towards consistency is welcome, but how much better it would be if federal legislation were enforced by a single federal enforcement agency, with presumably some saving on cost to the taxpayer in addition to benefits to business.

Turning to the composition of this new body: of 15 members, nine will represent the Commonwealth and states and territories. The remainder would be made up of two representing employers, two representing employees, an independent chair and the chief executive officer. It would make recommendations to the Workplace Relations Ministers Council, as I said previously. Its composition is, therefore, heavily political, and those members who one would hope would have some practical industry experience will be severely outnumbered. This is of particular importance when one looks at the voting arrangements. It transpires that they will not merely be outnumbered; they will in effect be marginalised. I quote from the explanatory memorandum to the bill with regard to clause 38—Decisions at meetings etc.

This clause provides for a two-thirds majority of the votes of the voting members present and voting to determine a question at a meeting other than a question relating to the model OHS legislation or model OHS codes of practice.

It goes on:

… any decisions concerning model OHS legislation and model OHS codes of practice must be made by an absolute majority of all the voting members representing the Commonwealth, States and Territories.

So any proposal on OH&S legislation and codes of practice, no matter how beneficial or practical, that fails to meet the vested interests of the states and territories will fail to get before the Workplace Relations Ministers Council. The explanatory memorandum continues with reference to clause 40 of the bill:

This clause requires all members (including the CEO and substitute members) to disclose any pecuniary or other interest in matters under consideration by SWA.

Members declaring an interest:

… must not be present during any deliberation by SWA on the matter and must not take part in any decision on the matter.

Then we come to the crunch, and again I quote:


and this is a very important ‘however’—

this requirement does not apply to any decision with respect to the model OHS legislation or model OHS codes of practice. This ensures that the requirements of an absolute majority of the Commonwealth, States and Territories—as provided for by subclause 38(2)—are not undermined by ‘conflicting out’ those members.

This amounts to a political fix—to avoid causing the council any embarrassment by having to veto proposals it knows it cannot deliver. In the matter of model legislation and codes of practice, it seems Safe Work Australia will not be an independent body at all, merely a creature of the state and territory representatives. On the one hand, the government is paying lip-service to the principles of conflict of interest and then, on the other hand, it chooses to ignore them. So much for the independence of Safe Work Australia. It is only independent up to the point at which the interests of the states and territories are threatened, at which point the views and advice of those members with practical industry experience can be virtually ignored. It is the vested interests of the states and territories—and one state in particular—that have resulted in the existing plethora of different rules, regulations and enforcement practices in the first place.

If the government is serious about reform, then how about this as an alternative: a body comprised entirely of employers and employees’ representatives, reporting not to the Workplace Relations Ministers Council but to the Minister for Employment and Workplace Relations, who oversees federal legislation and enforcement? At this point, I acknowledge that some states and territories have gone further down the road of reforming OH&S matters than others. But, as we have seen with prolonged discussions over the fate of the Murray-Darling, it may only take one state to block the reform process, however critical the circumstances.

In order to see how the interests of the states and territories are likely to be represented on Safe Work Australia, we need to look at their record of reform under the present arrangements. The international benchmark for modern OH&S practices in legislation was set following the UK parliamentary inquiry by Lord Robens in 1972. The Robens report noted the apathy that existed with regard to OH&S at the same time and made the following statement:

… safety awareness industry and commerce can only be developed by an accumulation of influences and pressures operating at many levels—that of the boardroom, the senior manager, the supervisor, the trade unions, the worker on the shop floor.

The solution was to establish the principle that every individual involved in the work should be held responsible and liable for what they can practically and reasonably control. This principle of practical and reasonable control has become an international benchmark since it was put forward in 1972. Yet, when we look at the duty of care descriptions in the various Australian jurisdictions, we find that two states have still not yet caught up. In New South Wales, the employer has a total obligation to safety while the employee has only to take reasonable care. In Queensland, the employer again has a total obligation to safety while an employee only has to follow the employer’s instructions. In all other jurisdictions, the duties of care are similar, as suggested by Lord Robens.

I remind the House that Safe Work Australia can put forward changes to model legislation and codes of practice only on the basis of an absolute majority of Commonwealth, state and territory members. To make progress, it will have to rely on the goodwill of the minority in accepting the position of the majority. This may be optimistic, particularly in the case of New South Wales. The position was tipped even further against employers with the passage of a new OH&S act in 2000 in that state. This provided for a presumption of guilt against the legal employer but not against the employee, and for prosecutions to be carried out by the Industrial Relations Commission of New South Wales, where there is no avenue of appeal and no trial by jury. Therefore, although criminal convictions are recorded, the principles of criminal justice do not apply. Also, unions have the ability to bring prosecutions and can receive half the fines imposed in a successful prosecution. They may also have their legal fees paid. Clearly, it is right that prosecutions should be brought against negligent employers, but surely they should be brought by an independent agency and one which does not stand to benefit financially from the prosecution. It goes against the principles of justice that the person bringing the prosecution stands to gain from it. How would we feel if parking officers took a cut from every parking fine imposed? What impact would that have on the independence or the perceived independence of such officers?

Last year, the Business Council of Australia, the Minerals Council and other business groups and individual companies produced a paper entitled Making work safe. This reported that, with one-third of the national workforce, New South Wales conducted 63.4 per cent of all OH&S prosecutions between 1989-99 and 2002-03. Some 96 per cent of all New South Wales prosecutions resulted in a conviction in 2002-03. What we have in New South Wales is not a regime designed to deliver the best OH&S outcomes and safe workplaces but a punitive system—one heavily weighted against employers, with few obligations placed on employees to take reasonable care for their own safety—and also a cash cow for unions. Is it any wonder that New South Wales, with one-third of our national workforce, the largest state in Australia by virtue of population, is lagging badly behind in terms of economic growth and prosperity? Why on earth would anyone want to do business in New South Wales when they could do business elsewhere? To quote the Making work safe report again:

For any business of size in New South Wales, it is only a matter of time, and luck, before managers, executives and directors face prosecution for incidents where they did not exercise control.

It cannot be quantified, but it is fair to assume that this is adversely affecting the New South Wales economy as business views investment in New South Wales as carrying an unacceptably high, unfair and unjust risk of OH&S conviction for their personnel.

The legislation has also had the effect of shifting the focus of OH&S management from the prevention of injuries to the mitigation of legal risk.

The fact of the matter is that the New South Wales state government is controlled by the unions and, until that control is broken, New South Wales will be an obstacle to change on this and many other issues. There can be no clearer example of the malign influence of the unions than the fate of the New South Wales government’s own attempts to reform. In 2006, with the support of employers, the government put forward draft legislation moving towards harmonisation with other states and territories and going some way to removing the presumption of guilt. First, the consultation period was extended. Then the legislation was referred to the Stein review, which conducted further consultation. The review concluded—surprise, surprise!—that the existing legislation should be retained, though the report of the review was not released until some months later. In response to this, the New South Wales opposition put forward the government’s own draft legislation as a private member’s bill, but it was then voted down. So, after two rounds of consultation, including with New South Wales WorkCover, which was overwhelmingly in favour of reform, there will be no reform of OH&S in New South Wales. I should also point out that the proposed changes did not affect the unions’ ability to profit from prosecutions that they brought, so the cash cow under this legislation was still retained.

There are only a few groups benefiting from the kind of archaic class warfare still taking place in New South Wales and those are the unions, interstate business competitors and international business competitors to those operating in New South Wales. The unions are not making the workplace any safer for their members, and in fact they are just putting their own jobs at risk. By all means, let us harmonise our workers compensation and OH&S legislation, but the dead hand of the trade unions lies over proposals that the government has put forward. If this government is serious about reform, then it will set up a truly independent Safe Work Australia and it will commit to enacting its proposals, whatever the views of the teetering New South Wales state government.