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Tuesday, 27 March 2007
Page: 5


Senator SIEWERT (12:49 PM) —Once again, we are presented with a bill from the government with the intention of watering down the rights and entitlements of workers. The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 is the next instalment in a long line of government interventions and legislative changes that undermine both industrial relations and occupational health and safety. In recent sittings, we have seen the Occupational Health and Safety (Commonwealth Employment) Amendment Bill, which dramatically reduced the role of unions in occupational health and safety arrangements in Commonwealth workplaces. It also greatly reduced the powers of Comcare and health and safety representatives in Commonwealth workplaces. The Greens argued very strongly at the time that we believed this would undermine safety in the workplace.

Then we had the Building and Construction Industry Improvement Bill and the Building and Construction Industry Improvement (Consequential and Transitional) Bill, which we believe impact very significantly on the ability of workers to look after safety in their workplaces. I remind the House that, on average, 50 deaths occur each year in unsafe workplaces on building sites; this is almost a death a week. At the time, we expressed concern—and we continue to express concern—that safety is being significantly undermined in building workplaces. We then had the amendments to the trade practices legislation in relation to independent contractors. We also indicated a great deal of concern for the safety of independent drivers.

The stated rationale for the current bill, the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill, is to maintain the financial viability of the workers compensation scheme established under the Safety, Rehabilitation and Compensation Act 1988. Yet there is no evidence to suggest the scheme is in danger. On the contrary, the Commonwealth workers compensation scheme is among the most effective in the country. Statistics from the 2006 Comparative performance monitoring report, the CPM report, cited in a number of submissions to the Senate inquiry into the bill, demonstrate:

  • The Commonwealth jurisdiction has one of the best Assets to Liabilities Ratio;
  • The Commonwealth jurisdiction has the lowest premium rate of any Australian jurisdiction;
  • The scheme does not have escalating claims numbers or costs;
  • The incidence rate and frequency rate of compensated claims in the Commonwealth jurisdiction is decreasing; and
  • An actual analysis of claims costs for the Commonwealth jurisdiction shows little overall change.

To my mind, these amendments seem to be less about protecting an effective system of workers compensation and more about limiting and restricting the system to the detriment of workers.

It is also noteworthy that the bill is presented at a time when we see the expansion of the Commonwealth scheme to non-traditional government employers and encouragement by government for employers to leave state systems for the federal system. So we see the government expanding the system for employers and at the same time limiting access to the system for employees.

In speaking to these changes, I would like to particularly focus on three key aspects: the new definitions of ‘disease’ and ‘injury’, journey cover and off-site recess breaks, and calculation of retiree benefits. The minister in his second reading speech noted:

The definitions of ‘disease’ and ‘injury’ are of central importance ...

This is precisely why we believe the changes being proposed are of great concern. The changes to these two definitions have the potential to significantly limit access to the workers compensation scheme for what we believe are unjustifiable reasons.

The bill introduces a new definition of ‘disease’ which now requires that an ailment suffered by an employee or the aggravation of an existing ailment was contributed to to a ‘significant degree’ by the employee’s employment by the Commonwealth or a licensee. The bill goes on to define ‘significant degree’ as ‘substantially more than material’. The current definition refers to ‘a material degree’. This is a significant and unnecessary change. It is significant because it creates a much greater threshold test, which will mean many work related injuries will be excluded.

I am particularly concerned about the impact of the new definition on people with existing conditions, particularly psychological conditions, and also where multiple causes of injury are identified. As the CPSU put it in their submission:

The test presumes that it is possible to weigh the relative causes of an injury and arrive at some sort of quantitative assessment of the relative importance of each event. We believe this presumption is misconceived and extremely problematic, especially so in the context of mental illness. Mental and psychological illnesses often have multiple causes, and it is very difficult to determinatively assess the relative weight of each cause.

The new definitions of ‘disease’ and indeed ‘injury’ have the potential to discriminate against people with mental and psychological illnesses. The government attempts to justify this change by arguing that it returns to the original intent of the act—that is, that the person’s employment was ‘more than a contributing factor to the contraction of the disease’.

But it is an unnecessary change because in the recent Federal Court decision of Comcare v Canute 2005, French and Stone found that there must be a close connection between the disease and the employment. The current definition would therefore seem to be entirely adequate and in line with the intention of the act. Furthermore, as the Law Council of Australia comments in its submission to the inquiry into the bill, a new definition will require testing through litigation, whereas there is clarity as to the meaning of the current definition. I am also concerned that the new test will reduce the incentive for employers to maintain safe workplaces. Again, this is a particularly real concern for people who are predisposed to mental health problems, where there may well be less incentive for employers to provide sufficient support and appropriate staff management.

In a similar way, the proposed amendments to the definition of ‘injury’ seem directed at reducing access for people suffering psychological injuries in the workplace. The amendments to the definition of ‘injury’ exclude injuries suffered as a result of ‘reasonable administrative action’. This is an unjustified wide-ranging exclusion that could be read to exclude the effects of any management decisions. It is patently not fair to have such a broad exclusion which in effect allows management off the hook for the consequences of their actions. The changes to these two vital definitions will lead to people not being covered by the scheme who otherwise would have been covered—for no justifiable reason. Furthermore, it would seem that once again it will be the more vulnerable people in our community missing out.

The removal of claims for non-work related journeys, including journeys to and from work, and for off-site recess breaks demonstrates the real intention of this bill to be the elimination of employee rights. Journey cover and off-site rest breaks have been recognised within the scheme for a number of years, and it is merely a cost-shifting exercise to remove them now. The government’s reasoning for eliminating these claims is that employers have no control over such circumstances. There are a couple of points to be made on this reasoning. Firstly, it is illogical—employers also have no real control over work related journeys which are covered by the scheme. Secondly, it is a nonsense to say that journeys to and from work are not work related. Of course they are. Workers are required by their employers to travel to work, usually at given times.

The CFMEU make an important point in their submission to the inquiry: they have had many members injured travelling to and from work when fatigued after working long hours of overtime or doing arduous work. To cut off workers compensation in these circumstances reduces the incentive for employers to provide safe working conditions and shifts the cost from employers to the community. More importantly, the question of control is the wrong issue. Australia rightly has no-fault workers compensation systems. As the Communications Electrical and Plumbing Union submission explains:

Workers Compensation is beneficial legislation with an underlying premise of ‘no fault’. Arguments to exclude compensation on the basis that the employer has no control or fully complies introduces concepts which if extended would exclude many compensable claims and undermine the whole social framework of workers compensation legislation.

Any moves to water down the no-fault nature of workers compensation cannot be supported. Another aspect of making this amendment is that it also could act as a disincentive for physical activity and what could be termed as more ‘environmentally friendly’ forms of transport, such as walking and bicycle riding, and may as a result have adverse effects on the long-term health of workers.

The calculation of retiree benefits and the deduction of superannuation contributions is a major issue for, as I understand it, around 2,000 former public servants, as well of course for those into the future. The current arrangements have resulted in massive disadvantage to retirees under the scheme, with many receiving benefits well below the 75 per cent of normal weekly earnings which the scheme’s charter states as the safety net. The unfairness of the current situation and the fact that the changes proposed in the bill do not fix the problem are demonstrated by the experience of Mr Ian Emery. Mr Emery is currently receiving benefits at a rate of around 43 per cent of his former salary, significantly less than the 75 per cent safety net.

Rather than properly addressing this unfairness, the changes proposed in the bill entrench it. The bill proposes a five per cent deduction that replaces the current superannuation contribution deductions; a new calculation of deemed interest rates; and that the deemed rate applies to gross lump sum payments, not net payments.

There is no real justification for directly reducing entitlements for retirees from 75 per cent to 70 per cent. The five per cent decrease is described by the government as being for notional superannuation contributions. However, retirees are not making superannuation contributions, and they are not getting them returned. If these moneys—the five per cent—are really being deducted for superannuation contributions, as the government claims, then at the very least that money should be credited to the individuals, for example to their super fund.

The current deemed rates provisions of 10 per cent have been acknowledged as unfair. It is about time that the rates were amended. Unfortunately, the government’s response does not go far enough. The bill proposes that the minister may, by legislative instrument, specify the rate of weekly interest on the lump sum. The explanatory memorandum indicates that the intention is for the minister to use the 10-year government bond rate for the previous 12 months. Our concern with this provision is that it sets up a different measurement of deemed rates from those in other government agencies and will still result in higher rates than for persons who receive Centrelink or Veterans’ Affairs pensions.

The unfairness of the deemed interest rates is compounded by the fact that they are applied to the gross superannuation payment, not the net. Thus recipients are being disadvantaged by having amounts deducted that they would never have received. The upshot of the bill’s changes to how benefits for retirees are calculated is that unfairness and disadvantage are entrenched rather than properly addressed—again, another opportunity lost. The Greens oppose this bill and see it as another attempt to further disadvantage workers in this country.