‘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

New city laneway set for renewal
New city laneway set for renewal

Gresham Street is the latest West End laneway set for transformation, with plans for two new small venues – one a French aperitif bar and the other a speakeasy featuring walls lined with vintage books.

Renovations are in progress while the Small Venue Licence applications are pending, and the Full Story »

Our Mob: from Munch to Maralinga
Our Mob: from Munch to Maralinga

The Adelaide Festival Centre’s new Our Mob exhibition features a diverse collection of Indigenous art ranging from a political take on Edvard Munch’s The Scream to a young boy’s impression of the fallout from nuclear testing at Maralinga.

“It’s about bringing artists from all over the stat Full Story »

Bangarra celebrates cultural resilience
Bangarra celebrates cultural resilience

Bangarra Dance Theatre’s Kinship brings together the past and present in a two-part work that celebrates a traditional creation story and also explores the issue of Aboriginal identity in the 21st century.

Artistic director and choreographer Stephen Page says the two stories in the production – Full Story »

Annabel Langbein’s Chocolate Bark
Annabel Langbein’s Chocolate Bark

RECIPE | New Zealand chef Annabel Langbein, whose popular show The Free Range Cook airs on Australian television, has taken a seasonal approach to the presentation of recipes in her latest cookbook.

This chocolate bark comes under summer, but we reckon it would be delicious at any time of year.

“T Full Story »

Is Australian TV just too tepid?
Is Australian TV just too tepid?

TELEVISION | A special thing happened in August this year: Foxtel launched BBC First, a premium channel showcasing the best of contemporary British television drama.

As a global channel that chose Australia as its inaugural audience, here’s how it describes itself:

BBC First celebrates humanity in Full Story »

Laneway The Third opening
Laneway The Third opening

Adelaide’s first permanent container bar launched its third year of operation this month with a party to celebrate the 2014 season  - Laneway The Third.

Full Story »
Strathalbyn
Strathalbyn

This charming, two-storey home, built in 1856, is currently used as a bed and breakfast.

Full Story »
Are those Americanisms really American?
Are those Americanisms really American?

Comment | Those much-hated Americanisms might not be as American as we think, argues Baden Eunson.

From time to time, Australians complain about the apparent encroachment of Americanisms in our language, and the Brits seem none too happy about it either.

George Bernard Shaw famously said:

England an Full Story »

Faulkner retained for Test squad
Faulkner retained for Test squad

CRICKET | Mitchell Marsh has been declared fit for selection for Wednesday’s first Test against Pakistan but Australia have said they’ll keep fellow allrounder James Faulkner in Dubai on standby.

Marsh, who strained a hamstring on September 30, looked untroubled when bowling seven overs Full Story »

Partners

Let’s Do This !
Let’s Do This !

An open letter from Nick Reade, Chief Executive BankSA.

At BankSA it’s no surprise that we’re passionate South Australians. As the local bank in South Australia we’re proud to have held a special place in the State for over 166 years. A lot has changed in that time, particularly how our custom Full Story »

Flinders lawyers – trailblazing (and very employable)
Flinders lawyers – trailblazing (and very employable)

CONTENT SUPPLIED BY FLINDERS UNIVERSITY | Flinders University Law School’s Dean, Professor Kim Economides, is a man on a mission.

It’s Thursday morning in his office at Flinders’ Bedford Park Campus and he has been discussing how to get the message out about the employability of Flinders law g Full Story »

Surprising similarities: Scotland and Sicily
Surprising similarities: Scotland and Sicily

Scotland and Sicily might appear to be poles apart in language, climate, religion and temperament, but a new book reveals significant parallels and resonances between the two.

Scottish literature specialist Professor Graham Tulloch and Italian film and drama expert Dr Luciana d’Arcangeli from Flin Full Story »