‘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.”

 Next
 Prev

Highlights

Remembering SA’s migrant hostels
Remembering SA’s migrant hostels

Adelaide | Heidi Brasse was only a small girl when she arrived in Adelaide with her family from Germany, but her father’s diary helps her to remember.

“Food that you could throw to pigs and the beds squeaked like mad. The countryside here, though is really rather beautiful,” noted her fath Full Story »

Kelly & Co joins national firm
Kelly & Co joins national firm

Local law firm Kelly & Co has joined national independent Australian firm HWL Ebsworth Lawyers.

Aiming for a 1 July 2014 start date, the 14 Kelly & Co partners will be joined by their legal and support teams in moving to HWL Ebsworth to add another national firm to the South Australian legal Full Story »

Small Change, big flavour
Small Change, big flavour

PHILIP WHITE REVIEWS | Whitey discovers two beaut off-the-wall babies made at a very shiny price by a bloke of uncommon gastronomic intelligence – don’t forget your Small Change.

Small Change White
$20; 11.9% alcohol; screw cap; 93 points

Fillets, Flipper, Filth, Furber, Snow, Whitey  Full Story »

What’s on in Adelaide
What’s on in Adelaide

WEEKEND PICKS | There’s ample entertainment on offer in Adelaide over the Easter long weekend, including the popular Kite Festival, cutting-edge exhibitions and a stunning showcase of ancient Chinese culture.

Adelaide International Kite Festival

All eyes will be on the sky at Semaphore, with the Full Story »

The Invisible Woman
The Invisible Woman

FILM REVIEW | Ralph Fiennes produces, directs and stars in this adaptation of the prize-winning book The Invisible Woman, by Claire Tomalin.  Such combinations can signal that ego has the upper hand or that the leading actor simply has greater faith in a story than do others.  Either way, this is Full Story »

Like Father, Like Son
Like Father, Like Son

FILM REVIEW | Wanting the best for his child and ensuring his success is a priority for Tokyo architect Ryota Nonomiya.

Strict discipline, routines, piano lessons and immaculate presentation are part of life for six-year-old Keita as he is groomed to live up to his father’s expectations in this st Full Story »

Helen Reddy concert
Helen Reddy concert

Helen Reddy fans from all over SA were out in force for the singer’s concert at the Adelaide Festival Centre’s Festival Theatre this week.

Full Story »
Medindie
Medindie

This Georgian residence was designed by Chris Diamantis. It features “Parterre” gardens, a spacious master bedroom suite with a walk-in robe and a stylish en suite with under-floor heating. The formal lounge/living room has a gorgeous fireplace, French doors with dual dining spaces and a Full Story »

AFL form guide
AFL form guide

AFL | Under-siege Richmond have reacted to last week’s third AFL loss of the season by dropping key forward Ty Vickery for tonight’s clash with Brisbane at the Gabba.

Richmond have recalled Ricky Petterd to shake up their forward line which coach Damien Hardwick says was cumbersome in la Full Story »

Partners

Targeting the silent thief of sight
Targeting the silent thief of sight

Flinders University researcher Dr Tiger Zhou has won a prestigious Lions Medical Research Foundation Scholarship in Medicine to search for genes that cause glaucoma – the world’s leading cause of irreversible blindness.

Valued at $105,000 over three years, the scholarship will assist Dr Zhou to Full Story »

Top police officer’s memories of Flinders
Top police officer’s memories of Flinders

“Always remember that we are here for the little person.”

It is 1993 at Flinders University and mature age student and serving Federal police officer Luke Cornelius has just heard Law Professor Elliott Johnston utter ten words that he will carry with him for the rest of his life.

Although he wo Full Story »

Flinders gives its elite athletes a sporting chance
Flinders gives its elite athletes a sporting chance

Juggling university study with the normal range of external demands is already a big ask: add in the time required to train for an elite level sport, and the degree of difficulty becomes daunting.

Thanks to a round of sports scholarships presented recently at Flinders, the task faced by a group of s Full Story »