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Tuesday, 27 March 2007
Page: 16


Senator MURRAY (1:36 PM) —On occasions the second reading debate contributions on bills are of varying quality. But I must say I have enjoyed listening to those second reading debate contributions I have heard to date on the Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006 because I think they have been well and comprehensively presented. In particular, a number of opposition senators have made contributions reflecting a very practical experience of the issues at hand. So I for one have valued their contribution. I valued too the minority report written by the opposition senators. It was well constructed. It happened to be double the size of the government senators’ report. Of course, quantity does not always equal quality; but in this case it certainly did. It covered the matters as they should be covered.

The Safety, Rehabilitation and Compensation and Other Legislation Amendment Bill 2006, which amends the Safety, Rehabilitation and Compensation Act 1988, aims to amend the act to maintain the financial viability of the Commonwealth workers compensation scheme. In other words, this amending bill is about money. If in fact the Comcare scheme is not under the pressure that the government maintains it is, it brings into contention many of the criticisms as to its motive and outcomes. The government believes the scheme is under growing pressure from increasing numbers of accepted claims, longer average claim duration and higher claim costs.

The main amendments will amend the definition of ‘disease’ to a higher threshold, to mean an injury which was caused or aggravated by work to a ‘significant degree’; amend the definition of ‘injury’ to exclude injuries arising from ‘reasonable’ administrative action; remove claims for non-work related journeys and recess breaks; amend the calculation of retirees’ incapacity benefits vis-a-vis changes in interest rates and super fund contributions; update measures for calculating benefits for employees that include definitions of earnings and super schemes; ensure that all potential earnings from suitable employment can be taken into account when determining incapacity payments; enable determining authorities to directly reimburse health care providers; and increase the maximum funeral benefits payable under the scheme.

My conclusion from the evidence presented to the committee is that there is insufficient evidence of a significant threat to the financial viability of the scheme. The scheme itself is in good shape, and the financial statements indicate that. The major effect of the change encapsulated in this bill appears to be a reduction in costs to the Commonwealth and employers and a shifting of those costs to the employees affected by injury—and, of course, to the taxpayer through the broader welfare benefits system. While the bill addresses some inequities in the deeming rate used to calculate benefits, these are not retrospective; and it does not satisfy the criticisms that have been levelled against this process.

The changes to the key definitions of ‘disease’ and ‘injury’ tighten access for injured employees to the scheme. The matters of a lack of clarity in the new provisions; non-coverage of journey claims, physical activity and off-site recess breaks; and notional superannuation contributions and suitable employment were raised in evidence given to the Senate Standing Committee on Employment, Workplace Relations and Education. That committee report came down on 20 February 2007.

The Democrats’ policy is to strike a balance between the legitimate interests of unions, workers and employers. This bill does not achieve that. This bill will further reduce access to the scheme, reduce the fair access which presently exists and erode the compensation component payable to workers; all, as far as we can see, on an unnecessary basis. Amongst those expressing an opinion on the bill, Australian Air Express, Telstra and the Australian Lawyers Alliance supported the bill or aspects of it. The ACTU, CPSU, AMWU, CEPU, CFMEU, RTBU, the Law Council, SCOA, AFDO, the Mental Health Council and others opposed the bill or parts of it.

This bill will pass because the coalition has the numbers in the Senate. Many people still do not realise what that means and naively expect modern members of the coalition to exercise a conscience vote. I had an email conversation with a concerned citizen, who had received supporting noises from a Liberal senator and thought this senator might stop this bill. He also thought that Senator Fielding’s vote mattered. In part I answered: ‘If Senator Fielding is opposed to the bill, then you have to get two members of the coalition—Liberal or Nationals—to vote against the bill. In my experience, apart from the courageous Senator Joyce, the rest of the coalition senators almost never do that. If Senator Fielding supports the bill, you need three coalition members to vote against the bill. That is just not going to happen. Sorry, but that’s how it is.’

The reason I have drawn the attention of the chamber, and those who are interested in this bill and are listening, to those remarks I made is that you simply cannot presently adjust bills in this chamber under the philosophy of the present coalition government, which does not routinely allow conscience votes. This will not happen unless you give the control of the Senate back to non-government parties. Those who are affected detrimentally by this bill—and they number hundreds and hundreds of thousands of potential claimants—need to understand that, because in the next election they need to cast their vote away from the control of the Senate being held by the government.

So when, not if, this bill is passed, it will have the effect of stripping away terms and conditions of workers as they relate to work related injury and sickness. It will also erode the compensation payable to workers. For these reasons, the Democrats take issue with this part of the government’s continuing industrial relations crusade to wind back worker entitlements and conditions. We oppose it because it goes beyond useful reform and efficiencies. We oppose it because it, once again, shifts costs from a specific agency and mechanism dealing with issues back to the taxpayer community at large. It is not good public policy.

The bill is the government’s formal response to the Productivity Commission’s latest recommendations for changes required in the area of occupational health and safety. The point to be made is that continuing reform and review are necessary, but the policy principles which have applied in key areas like this have to be maintained. Back in September 2004, in the Journal of Australian Political Economy, Kevin Purse, Frances Meredith and Robert Guthrie wrote an article titled ‘Neoliberalism, workers’ compensation and the Productivity Commission’. They said of the commission:

The real significance of its contribution lies in the fact that it provides a veneer of legitimacy for a neo-liberal political agenda designed to curtail the entitlements of those unfortunate enough to be injured as a result of their employment.

That may be a little unkind to the Productivity Commission as a general view of its work, but it does in many respects accurately reflect the intent of this bill. The government is up-front about its intent, which is explained in the explanatory memorandum as being the desire to decrease the number of injuries covered by the Comcare scheme—note: ‘to decrease the number covered’ not to decrease the number of injuries. The number of injuries is going to continue as before; they are just not going to be covered in the same way as they were before.

If, as the government argues, the Comcare scheme is under threat because of the added pressures from increasing claims, the answer should not lie with reducing the rights and protections available to workers and employees. The answer should lie elsewhere with, for instance, a better resourced Comcare or, if necessary, increased levies from employers—which, in my view, are not warranted because the system is viable; right now, it is financially strong—or, preferably, and most importantly, measures to prevent injury and disease in the first place.

It is not necessary to impose other measures, as there is insufficient evidence that there is a significant threat to the financial viability of the scheme. It appears, then, that these reforms will only accompany cost reduction and cost shifting and, therefore, lowering levels of protection for workers and workplaces covered by the Commonwealth.

Most concerning of the reforms are the principal amendments under item 11 that change the definitions of ‘injury’ and ‘disease’ for the purpose of the act. These changes are indeed telling because they will narrow the circumstances under which employees may claim compensation. For a worker to be compensated, he or she will have to show that their injury or disease has a connection with their workplace to a ‘significant degree’. At present, a ‘material contribution’ is used as a definition.

What is in a couple of words? In this case, a great deal. ‘Significant degree’ is defined as ‘a degree that is substantially more than material’. The quantitative and qualitative significance of this shift of definition may turn out to be high. It does not stop there. The definition of ‘injury’ will also exclude injuries stemming from what is considered reasonable administrative action taken in a reasonable manner. An exhaustive list is provided of matters that would fall under the term ‘reasonable administrative action’ as actions relating to appraisals, counselling and the suspension and discipline of employees.

However, the bill provides no guidance as to what is ‘reasonable’—an omission that leaves it open for a very broad interpretation that is unlikely to benefit employees. I am aware that the issue of ‘reasonableness’ has a very broad history of jurisprudential analysis and commentary. The government may well argue that they do not need to define ‘reasonable’ but it does seem odd that ‘reasonable administrative action’ would get an exhaustive list and ‘reasonable’ otherwise does not with respect to this bill.

Underpinning this part of the bill appears to be the rather misleading assumption that managerial behaviour is likely to be beyond reproach; that the question of fault could be impartially decided by employers within the scheme. The situation worsens for workers under item 12. It will be the case that claims for injuries sustained while travelling between home and work will no longer be possible, which, as has been clearly outlined, is most unfair in many circumstances. Surely, a number of injuries acquired while travelling to or from work are intrinsically work related? What of the situation where a worker is injured, even killed, when returning home at night extremely fatigued from an extended and arduous shift at the request of the employer? Should not this person and his or her family be compensated? As we know, many people from white-collar workers all the way through to blue-collar workers use their vehicle as a workplace. An architect who is employed by an architectural firm outside a building site is as much using his car as an office as is a Telstra person attending a fault.

The bill retains various travel situations that will remain covered, such as attending places of work related education; obtaining a medical certificate or receiving treatment; and undergoing medical examinations or rehabilitation. Nonetheless, other situations could arise that would cause coverage confusion or should be legitimately covered in these circumstances. If a worker were to sustain an injury during temporary absences on meal breaks, would workers face those problems? It is thought that employers have no control over activities during such breaks; but, as has been outlined by previous speakers, this could be sometimes yes, and sometimes very definitely no.

By removing most journey claims from coverage, the government succeeds in narrowing the range of workplace injuries that Comcare is liable for; it will not—and that is the point—narrow the range of workplace injuries that will continue to occur. So there will be more injuries or the same number of injuries but a lower level of coverage. Once again, this is a shift from a specific process and an institution that is able to cope with those matters at present to a broader welfare or taxpayer supported system. It is a significant cost-shift back to state governments—and, in some respects, back to the federal government—to cover through compulsory third-party claims and the federal government through the Centrelink welfare system.

The Democrats take no issue with the amendments relating to increasing the maximum benefits for funerals and updating the ways in which a retiree’s incapacity benefits are calculated by taking into account interest rate changes. It is typical of many bills that you oppose that they contain elements that you support—and these are such elements that we do support.

However, the amendments that provide a reference scale for adjusting employee entitlements in line with the definitions of ‘normal weekly earnings’ and ‘superannuation schemes’ are troubling, as are those that allow determining authorities to directly reimburse healthcare providers for their service costs. Although less contentious, they are troubling because of the lack of detail about the formula that will be used to calculate entitlements and the lack of clarity to do with the changing rules regarding the direct payment of medical bills by Comcare. The bill leaves gaps in coverage and contains uncertainties, and that can only lead to future problems. But the overwhelming problem with this bill, which is far too harsh for what is necessary, is that it limits the criteria by which workers can claim compensation in the event of a plausible workplace related injury or illness. Its passing will seriously undermine progress made to date in occupational health and safety policy in Australia. It is a clear step backwards.

The Democrats do not support the bill, because it goes beyond useful reforms and efficiencies. The Democrats do not support the bill because there has been little evidence to back the government’s claims of addressing a significant threat to the scheme’s financial viability. The Democrats do not support the bill, because it will result in unnecessary outcomes of reduced access and employee conditions, and poorer outcomes for injured workers. We say to the government: you had adequate notice from the opposition senators’ report and from the committee hearings that adjustments needed to be made to this bill. We say to the government: it is still possible for you, at the end of the second reading debate, to suspend debate of this bill and go away to adjust the bill to ameliorate some of its worst outcomes. What you are facing otherwise is that, when there is an inevitable change of government, either in the next election or later, these provisions will be overturned. You would be far better getting the common agreement of the Senate to reforms and efficiencies that are necessary with respect to Comcare—they will always be necessary, because you can advance these things—than shoving through something that is obviously strongly opposed by the Labor Party. They are the alternative government, and, if they are elected in November, I would expect them to overturn it—and I hope to hear from the Labor opposition a commitment to do exactly that.