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Thursday, 24 February 1977

Mr DEPUTY SPEAKER (Mr Lucock -Is leave granted? There being no objection, leave is granted.

The table read as follows-


(a)   This table should be read in conjunction with the attached notes.

(b)   Items:Voluntary Insurance; Social Security; Repatriation; Sick Leave; Superannuation.

(c)   Rough estimates only.

(d)   Hospital and Medical Expenses covered by Medibank at a cost of $35m work, $25m road (1975-76 prices).

Mr E G Whitlam (WERRIWA, NEW SOUTH WALES) - I thank the House. And when we think about it, why should the figures surprise us? Plainly any federal government can administer such a scheme more economically than States or private bureaucracies. It already has the machinery and the experience to do so. All the methods of financing the scheme recommended by the working party, the section of its report dealing with the feasibility of a riskrelated tax on employers was the work of the Australian Government Actuary and officers of the Australian Taxation Office and the Australian Bureau of Statistics. They recommend that the collection of payments by employers should be the responsibility of the Commissioner of Taxation. What could be more obvious? The federal government has had 60 years experience of making periodic payments in the case of age and invalid pensions and more than 60 years in the case of veterans. The cost of collection under Labor's scheme would be almost nil and the costs of making payments would be minimal.

Before describing the essential features of our scheme, a word about experience overseas. New Zealand and various states and provinces of the United States of America and Canada have all acted to relieve the social and economic costs of accident compensation. In 1966 New Zealand first acted on the recommendations of a royal commission chaired by Sir Owen Woodhouse who, of course, was the chairman of the committee upon which the present scheme is based.

In 23 years of office Liberal-Country Party governments in Australia failed to heed the example set by other governments and failed to take any action of their own. They failed to recognise the hardship and injustice imposed on accident victims by the antiquated common law system. My Party in 1971 adopted the policy of establishing a national compensation insurance scheme to replace third party and workers' compensation, and guarantee families and individuals a minimum income sufficient to maintain an acceptable standard of living.

In March 1973 Mr Justice Woodhouse was again commissioned, this time by my Government, to report upon the scope and form of a nationwide system of rehabilitation and compensation for all injured persons. This Bill, based substantially on that report, provides a scheme by which Australian residents will receive automatic earnings-related benefits when they are injured or incapacitated either temporarily or permanently from any cause. The injury may have been received at any place and at any time. When the scheme is in operation any employee or any person will be eligible for compensation for incapacity as a result of personal injury, providing that person is over the qualifying age and meets certain broad residence requirements. Personal injury' includes any physical or mental disability or damage and certain illnesses contracted as a result of the personal injury or in the course of employment. The benefit proposed is a weekly sum in respect of all incapacities. The sum for total incapacity is calculated on a percentageup to 85 per cent- of the weekly earnings of the applicant immediately before his injury.

The scheme is to be administered by a government department. There is to be no contest over proving liability, no lawyers and no judge or jury. A social welfare policy administration will assess claims and provide benefits and allowances. The administration will also deal with the rehabilitative aspect of the scheme. It will set safety and health standards and co-ordinate activities across the full range of the social welfare area. In other words, the scheme does away with the common law system of once-and-for-all, lump-sum assessments of damages. Lump-sum awards preclude speedy settlement of claims as the final cost of the injury is often not determined for years. They also fail to take into account the effects of inflation or any deterioration in the victim 's condition. Under the scheme in the Bill benefits will be continually reviewable. All benefits will be automatically adjusted in accordance with rises in the consumer price index. Minor personal injuries and severe facial or bodily disfigurement may be compensated by way of lump-sum payment. Other benefits include sums to dependent relatives and children of deceased persons and the payment of funeral expenses.

Let there be no talk of handouts and extravagances under this scheme. As I have shown, it will save money, not waste it. Even if there were no savings the scheme would be a vast improvement on what we have now. The removal of injustice, uncertainty and delay is a compelling reason for reforming the present cumbersome structure in one way or another. I put it forward as a general proposition that any form of insurance, indeed any community activity that is compulsory for everyone by law, is best administered in uniform fashion by a government agency established for that purpose. This scheme and Labor's Medibank scheme are based on the same principle. That principle is the need to establish the most rational, just, humane and efficient procedures to administer any social welfare scheme from which the whole community benefits and to which the whole community is obliged to contribute. The present system of compulsory State workers' compensation and third party insurance, like the Fraser Government's compulsory health insurance, are intrinsically extravagant and inefficient. Medical and hospital treatment have to be paid for, but the present State workers' compensation and third party insurance schemes and the present Federal health insurance scheme make medical and hospital treatment unnecessarily expensive for patients and taxpayers.

In Australia the Federal Government is the government best suited to establish the new procedures. A uniform national scheme is selfevidently the best way to eliminate costs, overlap and duplication, and to reduce the administrative overheads entailed in scores of different, competing companies. The States know the social and economic shortcomings of the present system but there is little they can do on their own, for they do not have the apparatus to collect the revenue or to disburse the benefits. As in all such reforms it is imperative that the initiative should come from the Federal Government. It has the opportunity and the duty to give a lead. It has the constitutional power. The Solicitor-General, Mr Byers, has given an opinion that the scheme we propose is fully within the limits of the Commonwealth's authority. In my experience every opinion Mr Byers has given, on legislation or in administration, has been upheld by the High Court. There has never been a successful challenge to any Bill or any action which he has advised.

The whole thrust of policy under this Government has been to devolve upon the States responsibilities which are properly and traditionally those of the Federal Government. In all this the objective is not so much to bring administration closer to the people or to involve the community in programs of local or regional concern. That m itself would be a proper objective and one supported by the Labor Party. What the Fraser Government has sought to do is reverse the historic consensus of a generation of Australian politics, the principle adhered to by successive Labor and Liberal governments, ever since the Second World War that the prime responsibility for social welfare and security, and for all reforms and initiatives in this field, rests with the Federal Government. As I pointed out last week, that was the underlying motive of the Government in appointing the Bailey and Holmes inquiries into aspects of social welfare. Even the Bailey report, while recommending that the States should have the primary role in operating schemes for rehabilitation, nevertheless proposes that the Commonwealth retain 'a policy, evaluating and funding role'. In any national rehabilitation and compensation scheme worthy of the name, that should be the minimum role for the Federal Government. No Federal Government can in justice ignore its obligation to explore and develop a new system of compensation and rehabilitation, in consultation with the States and the interests concerned, and remove the intolerable shortcomings of the system as it now stands. I believe that the scheme proposed in this Bill is in principle and detail the best that can be devised. How long must the people wait? How long must justice be denied? I commend the Bill to the House.

Mr DEPUTY SPEAKER (Mr Lucock -Is the motion seconded?

Mr Lionel Bowen -I second the motion and reserve my right to speak. I live in hope that I will have enough time to say something.

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