2nd Reading Speech

25 September 2018

The Hon. ADAM SEARLE (15:34): I lead for the Opposition in debate on the Workers Compensation Legislation Amendment Bill 2018. The Government does not oppose the legislation.The bill seeks to address a number of the problems caused by the Government’s 2012 workers compensation reformsTo that degree, the provisions in the bill are welcomed but they only start to address some of the issues created by the Government. Honourable members who were present when the legislation was debated in 2012 will remember that the present Government and Parliament enacted significant changes to the New South Wales Workers Compensation Act, founded upon the premise that the scheme was in significant financial difficulty. But when we looked at the PricewaterhouseCoopers report the Government based this on, we saw that that report contemplated and recommended far less drastic measures. The scheme, it was said, could essentially trade out of trouble over an extended period. There were also less drastic measures of the kind that had been embraced in the past than those taken up by the Parliament. When workers compensation arrangements needed to be addressed in the past, governments of both persuasions apportioned the pain across all the different stakeholders—injured workers being only one of the groups who had to make adjustments to ensure the financial viability of the scheme.

When we looked at the report we saw that the key cause of the deterioration in the scheme’s finances was the global financial crisis and much lower returns on investments. This was not a problem unique to New South Wales workers compensation investments; it was a problem being experienced more generally throughout the developed world. There were far less drastic measures available to the Government than the option it took up. It is a matter of record that, in a financial sense, the reforms enacted by the Parliament yielded financial benefits to the scheme far in excess of what was predicted. It is also a matter of record that this was paid for, essentially, by the blood, sweat and tears of injured workers. We fought tooth and nail against the reforms, which were harsh, unfair and, in our view, unbalanced.

Fast-forward six years and the Government, in the shadow of an election less than six months away and perhaps realising the harsh and unrelenting impact of its reforms, is seeking to address some of them in this package. This legislation seeks to do a number of things, one of which is to expand the capacity of the Workers Compensation Commission to deal with disputes between injured workers and the insurer. The bill also addresses the issue of weekly payments to injured workers. This is achieved through a formula known as pre-injury average weekly earnings, which has led to significant criticism of the scheme since 2012. The main criticism is that the formula is terribly complicated and, despite the Government’s claims at the time, many workers are left worse off as a result of this particular change.

The reforms in the bill will make weekly payments more transparent and easy to understand and calculate, and will also allow for the simple inclusion of all earnings in the previous 12 months, including overtime and other additional shifts that are worked regularly. The bill will also allow for indexation of amounts to occur without the need for approval by the Governor and gazettal. This will allow for immediate indexation and increase at the time prescribed simply by notification on the relevant website. The bill also addresses a number of issues arising between the compulsory third party green slip scheme for motor accidents and the workers compensation scheme when the worker is injured while driving for the purposes of work. Currently the injured person may receive damages payment through the compulsory third party scheme and then be required to pay back to the workers compensation scheme all the money that it has provided during the relevant period.

The changes in the bill will clarify and limit those repayments in the future in matters of this kind so that the injured person will only be required to pay back to the scheme the money equivalent to the payments made for lost earnings. The bill also seeks to align the workers compensation scheme with the National Injury Insurance Scheme for the purpose of commutations of medical expenses for persons in the catastrophic injury category—of which, thankfully, there are very few.

We acknowledge that the Government has undertaken significant consultation on the bill and we commend it for doing that. We also understand that a number of stakeholders, including Opposition members and no doubt other persons in this Chamber, are providing a measure of support for the legislation but not because they think the Government is on the right track or has a good record in this area. As I indicated at the outset, they are doing it simply because—given the catastrophic, harsh, unfair and indeed unwarranted reforms made by this Government and Parliament in 2012—this bill is a belated recognition that errors were made and a belated effort to make some correction. A number of stakeholders have lent their support to the measures in the bill because they wind back in some way the catastrophic and unfair changes. The workers compensation scheme is currently around $2.4 billion in surplus. I note—and I think this is taken from the Minister’s second reading speech—it makes a sort of trading profit of more than half a billion dollars per year.

Mr David Shoebridge: It has every year since it was amended.

The Hon. ADAM SEARLE: I acknowledge that interjection. It just goes to further establish our proposition that the reforms proposed by the Government and enacted by the Parliament went much further than was reasonably necessary to correct any deterioration in the scheme finances, given that the key driver of that deterioration was in fact the investment slump caused by the global financial crisis. To the extent that the bill presents the Parliament with an opportunity to correct some wrongs, we support the measures it contains. However, we will also be proposing amendments that have been lodged with the Clerks to make additional improvements. We invite honourable members, including Government members, to support them.

Our proposed additional measures would address the five-year cut-off for injured workers in section 39 of the Act. We think that simply has to go. The arbitrary 260-week, or five-year, cut-off for injured employees is working a terrible injustice. There have already been a number of self-harm and suicide events related to that element of the Act. Having such an arbitrary point in time at which an injured worker is cut off does not suddenly make them healthy, well or able to seek alternative employment.

Mr David Shoebridge: It just makes them poor.

The Hon. ADAM SEARLE: I acknowledge that interjection. It not only makes them poor; in many cases it punishes them and pushes them beyond the edge of financial viability and also to the brink, or in some cases over the brink, of mental collapse. It is really driving a terrible injustice. It is within our capacity to address that, and we should do so. We also want to remove the option for an employer to sack an injured worker after they have been off work for more than six months. That measure was originally put in place to protect injured workers so that they could not be sacked for six months after incurring their injury, but it now seems to have become a milestone for employers.

Mr David Shoebridge: It’s the point at which they do get sacked.

The Hon. ADAM SEARLE: I acknowledge that interjection. It is the point at which some employers seek to take advantage of the legislation and opt out of their social responsibility to those who have been injured while in their employ by saying that it will not be their problem anymore and they will offload those people like some commodity that is no longer needed. We think that is unfair and cruel, and it should be addressed. We will be proposing an amendment that does that.

Section 32A of the Act defines “suitable employment”. It is an Orwellian provision if ever there was one. The legislation proposed by the Government said that suitable employment does not have to be employment that really exists anywhere or that a particular worker or any worker could realistically hope to obtain; it is just employment that might exist somewhere in theory. Injured workers are being held against that benchmark and then turfed off the scheme. We fought that measure tooth and nail when it came before the Parliament in 2012. At every opportunity we have urged the Government and this Parliament to revisit that most unfair provision. We will propose an amendment to the provision so that the job actually has to exist somewhere, the job has to be reasonably situated and within realistic reach of the injured worker, and the job has to be actually available in the market. At present there is no requirement for those conditions to be met, and they should be. The provision should be redefined to have those elements.

Through our amendments we will also seek to restore journey claims that most often affect workers with disabilities because of trips and falls when using public transport but also affect all workers. If you like, it is an ideological thing. When the workers compensation scheme was created the Labor Party took the view that travelling to and from work was part and parcel of going to work.

Mr David Shoebridge: It’s hard to do work without it.

The Hon. ADAM SEARLE: It is indeed hard to do work without it. It is also a social justice measure to ensure that workers are covered. Famously, the Greiner Government took that provision out and the Carr Labor Government put it back in. This Government took it out and we are going to put it back in because it is fair and reasonable and necessary to avoid injustice. We will also insert specific words so that the ability of the Workers Compensation Commission to review and determine a work capacity decision that might be different from that of an insurer is an explicit ability conferred upon the commission.

In its bill the Government is asserting that the commission will have the power because it is no longer explicitly denied. We do not think that is good enough. We want to make it positive to avoid further disputes about whether the Workers Compensation Commission in fact has that power. The power should be explicit because we are not dealing with a court that has certain necessary or inherent functions implied. The commission is a statutory body that has only the functions provided by the Parliament. Frankly, injured workers and their claims should not become tied up in knots over whether the commission does or does not have a certain power. The fact is the power should be made clear and explicit.

Finally, as I outlined, the changes to the weekly payments to injured workers in the bill through pre‑injury average weekly earnings should not be limited only to new injured workers entering the scheme. Our view is that the changes should be applied to existing injured workers because they create a better and more transparent measure that more genuinely reflects pre-injury earnings. We will seek to visit the new definition on all injured workers who are being provided with support in the scheme. Overall, the Government bill should be supported but it is far short of where it ought to go.

As a responsible Opposition and the alternative government in this State, we will propose constructive measures that will take the scheme further towards the goal we think it should have, but even those measures will not right all of the injustices created by the 2012 reforms. There will have to be more said about those things and more done about them after the election. With those words, I urge all honourable members to give genuine and open consideration to the Opposition amendments that have been put forward constructively and in good faith. We urge all members of the House to support them.