Workers Compensation Amendment (Protection Of Injured Workers) Bill 2017

Photo of construction worker on scaffolding
08 March 2018

Mr ALISTER HENSKENS ( Ku-ring-gai ) ( 11:04 :48 ): I lead for the Government in debate on the private member's Workers Compensation Amendment (Protection of Injured Workers) Bill 2017. I thank the member for Epping for his substantial contribution to this debate. Contrary to what has been said by the member for Campbelltown, by presentation of this bill the Labor Opposition shows that it is entirely not ready for government and ought never be trusted with the levers of power in this State. It is no favour to workers to put in place a workers compensation scheme that will go bankrupt. It brings no benefit to someone injured at work to not be able to provide proper benefits. For one moment let us leave aside the sanctimonious speech made by the member for Campbelltown and consider that a Labor Government in 2006 took away workers rights when Labor reformed an unsustainable and financially bankrupt workers compensation scheme.

The Labor Opposition cannot now say that under no circumstances can workers rights be taken away in respect of the workers compensation scheme because that is the very thing that John Della Bosca and the Labor Government did in 2006. In this space governments must take into account three important factors. The first is the economic context in which a workers compensation policy operates. The second is the financial sustainability of the workers compensation system. Thirdly, and not unimportantly, since Government members are not a pack of heartless and cold-hearted people, we must take into account what is fair in all the circumstances to the injured worker. I suggest that that is exactly what this Government did in 2012 when it introduced workers compensation reforms. Prior to 2012 the workers compensation scheme was financially unsustainable.

As I have already stated, no favours are done for workers by giving them an unsustainable workers compensation scheme. I suggest that that reform struck an appropriate balance that took into account fairness to injured workers. I will deal with that shortly when I discuss the bill in greater detail. It is important to remember that in 2012 the policy was formulated in a context in which the policies of the Labor Government in this regard and in other regards had put New South Wales last in all economic indicators in the nation. Even Tasmania was ahead of New South Wales at that time. It is important to understand that workers compensation premiums from the Labor workers compensation scheme prior to 2012 cost jobs.

It is important to remember that any workers compensation scheme is a cost to business and, therefore, a cost to jobs. As a Government we have a duty to try to minimise that impact on small businesses—which are the largest employer of people in this State—and ensure that they can give people jobs. Prior to 2012 the workers compensation scheme increased the cost of employing labour in New South Wales, made us uncompetitive with other States and pushed jobs out of New South Wales and into other parts of Australia. It is no coincidence that when the Government introduced the existing Workers Compensation Legislation Amendment Act 2012, along with other reforms, employment in this State increased. Let us remember that under Labor New South Wales had the highest unemployment rate of any State in the nation.

New South Wales now has the lowest unemployment rate in the nation. Nearly 140,000 jobs were created over the past year, representing an employment rate growth of 3.7 per cent, which is higher than the long-term average of 1.6 per cent. More than 44 per cent of the full-time jobs created nationally over the past year were created in New South Wales, with many jobs created in regional New South Wales. For 31 consecutive months, the New South Wales unemployment rate has been the lowest in the country. Today the unemployment rate is 4.8 per cent, nearly 1 per cent lower than the unemployment rate of any other State in the Commonwealth. This jobs growth has not happened accidentally; it is the consequence of the hard work done by the Government, including the record $80 billion infrastructure program. It is a consequence also of legislation such as the Workers Compensation Legislation Amendment Act 2012, which reduced costs to business and made it easier for people to employ workers.

There can be no workers compensation scheme unless there are workers. To make the scheme relevant, the primary objective has to be to give people jobs. That is what this Government has done. Despite the gloom and doom we heard from the member for Cessnock, I remind the House of some of the benefits that flow to workers under the 2012 Act, which the member for Epping pointed out in his contribution. The current scheme, which this bill seeks to amend, was introduced after the Government made some hard decisions. Of course, governments are elected to make tough decisions that are in the best interests of the State. In 2012 the Government increased the amount paid to the vast majority of injured workers and the protections afforded to them.

In October 2012 the single statutory rate payable to injured workers who had received 26 weeks of payments was $439.50 per week. The 2012 reforms introduced a new deemed weekly benefit of $736.72 per week for injured workers. That is a substantial increase in the benefits paid to injured workers—it went from $439.50 per week to $736.72 per week. Today the figures are even higher than they were in 2012—they are now $828.72 per week, an increase of more than 60 per cent. Today injured workers are entitled to receive up to 95 per cent of their pre-injury average weekly earnings and 80 per cent after 2½ years, which is more than the weekly payments they would have received under the old Labor scheme, which was broken and unsustainable.

The reforms introduced by the Government in 2015 provide and reinforce protections for those who are most in need, including the provision of minimum benefits for injured workers with the highest needs. This provides protection for young and low-paid workers who are tragically injured in the workplace, resulting in a permanent impairment of more than 30 per cent. Injured persons are provided with a minimum payment of $814 per week, regardless of what their pre-injury earnings were. This minimum weekly payment is targeted to provide protection to young workers, apprentices, and even the barista who prepares the Deputy Speaker's morning coffee—those who need it most. In 2015 the Government increased the amount payable to injured workers' families in the event of a tragic death in the workplace from $524,000 to $750,000, an increase of almost 40 per cent. The amount is now $781,900.

In 2015 the Government increased also the amount payable to those who are injured at work and receive a permanent impairment of more than 10 per cent, as assessed by a medial specialist. This increased the amount payable to a worker with an assessed permanent impairment of 20 per cent from $30,250 to $50,760, which is an increase of more than 65 per cent. For injured workers who sustain a more severe injury and are assessed as having a permanent impairment of more than 56 per cent, the impact and increase is even more dramatic. The amount increased from $146,850 to $320,540—more than double. When a sustainable and reasonable workers compensation scheme is devised, we are able to target higher payments for the most severely injured workers, as long as we do not waste money within the system and provide inappropriate benefits. The reforms also protected New South Wales workers from the potential job losses associated with the projected 28 per cent increase in workers compensation premiums in 2012.

Without the Government's 2012 changes, there would have been a 28 per cent increase in premiums, which employers would have had to pay. That is the critical thing. So many jobs have been saved and created by ensuring that that impost on employers did not take place. I turn to schedule 1 to the bill to explain why the Government opposes the proposed provisions. I will not necessarily deal with the provisions in order of importance, but in the order in which they appear in the bill. Item [1] of schedule 1 to the bill seeks to omit section 10 (3A), which deals with journey claims. After hearing the contribution of the member for Cessnock, one would have thought that there was no compensation for journey claims.

In fact, there is quite extensive compensation for journey claims under the existing Act. At the moment, with regard to section 10 of the Act, a worker is protected under subsection (3) for the following types of journeys:

(a)the daily or other periodic journeys between the worker's place of abode and place of employment,

(b)the daily or other periodic journeys between the worker's place of abode, or place of employment, and any educational institution which the worker is required by the terms of the worker's employment, or is expected by the worker's employer, to attend,

(c)a journey between the worker's place of abode or place of employment and any other place, where the journey is made for the purpose of obtaining a medical certificate or receiving medical, surgical or hospital advice, attention or treatment or of receiving payment of compensation in connection with any injury for which the worker is entitled to receive compensation,

(d)a journey between the worker's place of abode or place of employment and any other place, where the journey is made for the purpose of having, undergoing or obtaining any consultation, examination or prescription referred to in section 74 (3),

(e)a journey between any camp or place:

(i)where the worker is required by the terms of the worker's employment, or is expected by the worker's employer, to reside temporarily, or

(ii)where it is reasonably necessary or convenient that the worker reside temporarily for any purpose of the worker's employment, and the worker's place of abode when not so residing,

(f)a journey between the worker's place of abode and the place of pick-up referred to in clause 14 of Schedule 1 to the 1998 Act,

(g)a journey between the worker's place of abode and place of employment, where the journey is made for the purpose of receiving payment of any wages or other money:

(i)due to the worker under the terms of his or her employment, and

(ii)which, pursuant to the terms of his or her employment or any agreement or arrangement between the worker and his or her employer, are available or are reasonably expected by the worker to be available for collection by the worker at the place of employment.

The current provisions with regard to journey claims are extensive. What does the member for Cessnock want to take out of the current Act? He wants to take out subsection (3A):

A journey referred to in subsection (3) to or from the worker's place of abode is a journey to which this section applies only if there is a real and substantial connection between the employment and the accident or incident out of which the personal injury arose.

In other words, if the worker goes off on a frolic and there is no real connection between the journey and the employment that is protected for the worker then the worker is not able to make a claim. Does the member for Cessnock think that this provision is unreasonable? The bill before us today would potentially add costs to the workers compensation scheme for journeys that have no relationship or substantial connection between workers and their employment. It is the imposition of these sorts of unreasonable claims that made the workers compensation scheme unsustainable in 2012. I would suggest that it is hard to justify the deletion of section 10 subsection (3A), which is sought in item [1] of schedule 1 to this bill. It is a fair requirement for any journey claim against the workers compensation scheme that the journey has a real and substantial connection between the worker's employment and the accident or incident out of which the personal injury arose. This legislation is a good example of why the Labor Opposition is not ready for government.

I spoke about jobs going interstate and an example of why that is occurring is that the Victorian Labor Government does not have workers compensation legislation that allows journey claims. The Western Australian Labor Government and the South Australian Labor Government do not have workers compensation legislation that allows journey claims. Tasmania and the Northern Territory do not allow journey claims, but with some exceptions. The New South Wales law is currently the most generous of comparative legislation in other jurisdictions. The New South Wales scheme provides protections for this sort of claim, while most workers compensation schemes in the country do not. However, the member for Cessnock has said that the New South Wales scheme is not generous enough.

I remind members that a responsible government must try to balance the budget in making these sorts of decisions. It is important to note that if a claim is made for a journey in a motor vehicle on a public road, but that journey falls foul of section 10 subsection (3A), there is still the possibility of the driver making a motor vehicle insurance claim. This means that an injured worker would have the possibility of making a claim under a different scheme, and therefore there is no need to lump the workers' compensation scheme with costs that are covered by other insurers. If that were the case, the cost would be shifted onto employers when that cost is already covered by another scheme. This is an entirely unreasonable provision. Item [2] of schedule 1 to the bill seeks to change section 32A of the existing Act to change the definition of "suitable employment". The current Act states:

suitable employment, in relation to a worker, means employment in work for which the worker is currently suited:

(a)having regard to:

(i)the nature of the worker's incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and

(ii)the worker's age, education, skills and work experience, and

(iii)any plan or document prepared as part of the return to work planning process, including an injury management plan under Chapter 3 of the 1998 Act, and

(iv)any occupational rehabilitation services that are being, or have been, provided to or for the worker, and

(v)such other matters as the Workers Compensation Guidelines may specify, and

(b)regardless of—

which means it is looking at the capacity—

(i)whether the work or the employment is available, and

(ii)whether the work or the employment is of a type or nature that is generally available in the employment market, and

(iii)the nature of the worker's pre-injury employment, and

(iv)the worker's place of residence.

This change seeks to remove the proviso and, by the introduction of what is proposed in new items [2] (e) to (h) in schedule 1 to the bill, to turn a workers compensation scheme into an unemployment scheme. Again, this involves a shifting of cost from one system that is designed to look after unemployed workers—that is our unemployment system—to the employers who have to pay premiums for the workers compensation scheme. It is another huge impost on business, which is unnecessary. In those two respects and in the other respects identified by the member for Epping concerning items [3], [4] and [5] of schedule 1 to the bill, it is entirely clear that the bill should not stand.

The provisions and the workers compensation reforms that were introduced by this Government in 2012 and 2015 provide an appropriate balance between protecting injured workers and the need for a sustainable workers compensation scheme. This bill will put at risk the viability of the current scheme. To take one example, the change proposed in item [3] of schedule 1 to the bill would cost approximately $5 billion, as the member for Epping pointed out. That would alone bankrupt the system. This bill should not be passed. It cannot be passed, and no responsible Opposition would propose a bill of this kind.