‘Beyond redemption': WorkCover to be decommissioned

‘Beyond redemption': WorkCover to be decommissioned

Adelaide | WorkCoverSA, a multi-billion dollar State Government corporation, is a basket case and beyond redemption, a senior Minister has admitted.

Attorney-General and Industrial Relations Minister John Rau confirmed today that WorkCover would be decommissioned.

“It’s buggered,” Rau told InDaily.

“We’ll decommission the scheme and start again.

“It’s been amended, patched over and fiddled with for years and in the process has become so disliked, the only thing to do is to rub it out and start again.”

WorkCover administers workers’ compensation for more than 430,000 employees of almost 50,000 businesses.

Last year it managed 16,774 claims, collected $667 million in employer levies and paid out more than $809 million in cliams.

The gap between income and expenditure is mostly covered by a massive $2.25 billion investment fund; its holdings in shares, property and cash delivered investment returns of $253 million.

Even with the investment income, WorkCover’s projected gap between estimated claims and estimated income leaves it with an unfunded liability of $1.366 billion.

Rau, who took over responsibility for WorkCover early this year, has been doing an internal review of the organisation, and doesn’t like what he sees.

He expects to name seven new members of its board by the end of this month, along with a new chairman.

Current chairman, Philip Bentley, retires on 31 October.

“The scheme has been poorly administered,” Rau said.

“People have been left sitting on the scheme; there’s been a glaring failure to address early intervention and early action to return to work.”

Rau, however, had little detail of WorkCover’s replacement.

“I hope to have a basic set of policy principles in place by the end of December; certainly in time for the March State election.”

For the 300 staff  at WorkCover’s head office in King William Street, the future is clouded after Rau’s stinging attack on the organisation.

“The culture at WorkCover, the structure within the corporation; it’s just not working.”

There have been major changes in recent months with the new appointments at senior executive level since its latest chief executive officer Greg McCarthy took the job when his predecessor Rob Thompson left unexpectedly last year.

As recently as last week, McCarthy had an optimistic view of initiatives he hoped would turn around the scheme’s performance.

“2013-14 will see us roll out these initiatives,” McCarthy said in the Corporation’s annual report, released last Wednesday.

“For example we will shortly roll out our early intervention model that will, with the claims agents, see workplace consultants visiting the workplaces of small business to assist workers and employers in the return to work process.

“I look forward to continuing to work with the entire team at WorkCoverSA, the claims agents and Scheme stakeholders to ensure we deliver improved return to work outcomes for all South Australians which, in-turn, should see a further improvement in our Scheme’s financial performance.”

WorkCover’s continuing increase in future debt was meant to be fixed by extensive reforms in April 2008, that came into force in July that year.

When the new laws were in place the unfunded liability had reached $984 million.

The reforms sparked angry protests from unions, not convinced they would do anything other than marginalise injured workers.

Employers were hoping improved scheme performance would deliver lower levies.

The liability went down slightly for two years to $982 million in 2009-10 and $952 million in 2010-11.

In 2011-12 it took another major leap as WorkCover Corporation posted a $1.389 billion in 2011-12.

History shows that despite a succession of further changes to claims management, legal services, redemptions and executive staffing, WorkCover’s promised improvements have failed to eventuate.

The model of a State-owned Corporation administering workers compensation was the social democracy dream of the Bannon Labor Government’s industrial relations Minister Jack Wright.

Responsibility for compensation was taken from the private sector insurance companies and a structure set up to ensure  all employers carried the responsibility of paying premiums.

It has now evolved into a Corporation where responsibility for the mangement of worker’s claim is outsourced to private sector agents Employers Mutual SA and Gallagher Bassett.

Its legal advice and representation services are outsourced to Adelaide law firms Minter Ellison and Sparke Helmore.

Rehabilitation services are provided by a raft of suppliers.

Rau now accepts that the SA model is the “worst” of Australia’s 11 workers’ compensation systems.

Right now, he doesn’t have the answer, but promises it won’t be a return to the pre-1986 model.

State Liberal Leader Steven Marshall agreed with the Rau assessment, but scoffed at the proposed timing for a replacement.

“Yes, I agree; it’s buggered,” Marshall told InDaily.

“But it’s a bit rich for the Minister to say ‘we’ve failed for 12 years but I’m not bringing a new idea to parliament’.

“He’s not even game to have it tested, rather he wants to say ‘trust me’.

“History suggests that’s not a good idea.”



England dismisses Johnson threat
England dismisses Johnson threat

CRICKET | England have poked the bear, and they better get ready to pay the price.

England captain Eoin Morgan lit the fuse ahead of his team’s World Cup showdown against Australia by downplaying Mitchell Johnson’s match-winning feats in the Tri-Series final.

Johnson tore the heart out o Full Story »

Richardson: Liberals don’t need another hero
Richardson: Liberals don’t need another hero

Comment | Mark Ward is an unlikely Labor hero, and an even less likely member for Davenport.

He’s billed as a “local schoolteacher”, which is true in the sense that he is both local and a schoolteacher, though he has never taught in the Davenport electorate.

He does have one significant impedi Full Story »

Lunch review: Madame Hanoi Bar & Bistro
Lunch review: Madame Hanoi Bar & Bistro

LUNCH REVIEW | Those in the know have been enjoying authentic Vietnamese food for many years in Adelaide’s north-western suburbs. And just recently it seems there is a banh mi vendor on most CBD streets, but the opening of Madame Hanoi Bar & Bistro at the Casino last week has taken Vietnamese Full Story »

Exploring the mystery and wonder of glass
Exploring the mystery and wonder of glass

DESIGN | Glass has attracted creative people for thousands of years and now a new exhibition involving 23 artists, designers and architects showcases the contemporary preoccupation with the material.

Co-curated by JamFactory CEO Brian Parkes and Margaret Hancock Davis, GLASS: art design architectu Full Story »

SA a winner at AACTA awards
SA a winner at AACTA awards

FILM | The 2015 AACTA awards have been hailed as a win for the South Australian film industry, with low-budget horror The Babadook tying for best film with Russell Crowe’s drama The Water Diviner.

The Babadook, a film about a mother plagued by the violent death of her husband and also dealing with Full Story »

Madame Hanoi launch
Madame Hanoi launch

Guests at chef Nic Watt’s new restaurant and bar Madame Hanoi enjoyed French-inspired Vietnamese street food and cocktails to celebrate its opening at the Adelaide Casino last week.

Full Story »

This grand residence is positioned in foothills on a commanding corner allotment, with lavish landscaped gardens and lawns.  It boasts sweeping views over Adelaide to the coast.

More pictures and info here.

Full Story »
Was Colleen McCullough’s work under-rated?
Was Colleen McCullough’s work under-rated?

OBIT | Colleen McCullough, writer of the highest-selling Australian book, has died aged 77. The novel that consumes her legacy, The Thorn Birds (1977), is one that Germaine Greer described as the “best bad book” she had ever read.

The lengthy romantic saga set on an outback sheep station, with a Full Story »

The Theory of Everything
The Theory of Everything

FILM REVIEW | Knowing beforehand that The Theory of Everything is a film about Stephen Hawking, the famous English physicist with motor neurone disease, raises some potentially invidious questions.

Will the movie give us a new perspective on profound physical disability, as with My Left Foot? Or may Full Story »


Survivorship conference seeks to improve cancer care
Survivorship conference seeks to improve cancer care

Many of Australia’s leading cancer clinicians, researchers and policy makers will converge on Adelaide next week for a Flinders University hosted conference focused on caring for the survivors of cancer.

Full Story »
Flinders gears up for SA’s largest open water swim
Flinders gears up for SA’s largest open water swim

Staff, students and friends of Flinders University will flock to Brighton beach this Sunday (February 1) for the Brighton Jetty Classic, South Australia’s largest open water swim.

Flinders’ sponsorship of the event for the sixth consecutive year reflects the University’s commitment to being ac Full Story »

Summer Fun
Summer Fun

CONTENT SUPPLIED BY RAA | The school holidays are now almost at an end and if you’re fast running out of ways to keep the kids busy then we’ve got a few ideas for some great days out that will help to keep them entertained.

Calling all Earth Guardians to Adelaide Zoo

Over the school holidays Ade Full Story »