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Govt reaches 'compromise' on workers compo reforms

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The State Government has modified its contentious workers’ compensation reforms and come up with a “compromise” it says protects both injured workers and businesses.

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The Government will pull its current Bill which prompted a backlash from unions and introduce new legislation tomorrow, following “very substantial negotiations and discussions” with worker representatives and business lobby groups over the past week.

“An agreement has now been reached by the Government with both unions and business for a compromise to see this change through the Parliament,” Premier Peter Malinauskas told reporters this morning at a press conference joined by several union and business leaders.

“This is the right thing to do. This is what good industrial relations look like – unions and businesses working closely together with government to ensure that we get outcomes that both protect the interest of injured workers but also protect the interests of business, particularly small business.”

Malinauskas said the new Return to Work (Scheme Sustainability) Bill 2022 would enable workers to be compensated for cumulative injuries while also protecting businesses from significant hikes in premiums, by increasing the threshold for workers to qualify as seriously injured.

Earlier this month, the Government introduced laws seeking to close a perceived loophole in the state’s Return to Work Act by ensuring workers’ injuries are treated individually rather than cumulatively.

It admitted some workers would be “worse off” under its original Bill but said changes were needed to protect businesses from skyrocketing premiums.

The proposed laws were introduced following a landmark legal decision in favour of injured truck driver Shane Summerfield, who was left permanently injured after a 2016 workplace accident.

Summerfield was granted additional compensation for complications from his original injuries, including an ongoing limp and back pain.

The Government’s proposed reforms prompted a significant backlash from the union movement and Labor’s state executive, which last week demanded the proposed laws be withdrawn following concerns injured workers could be left in poverty.

Business groups claimed if the legislation didn’t pass, premiums would rise by 30 per cent, leaving employers with no option but to limit wage increases, reduce staff numbers and cut hours.

But this morning, Malinauskas said “a compromise has now been met” that allows the “Summerfield principle” to remain but prevents exorbitant premium hikes for business.

“A new Bill will be introduced into the Lower House of Parliament tomorrow,” he said.

“That Bill will provide for the retention of the Summerfield decision. But it will also see the serious injured worker threshold increase from 30 per cent to 35 per cent.”

Malinauskas said that would “result in downward pressure on the levy so that we can retain the Summerfield principle but at the same time not see the levy go above 2 per cent”.

“On this model, Return to Work are forecasting that the mid point of the break-even premium rate will be 1.9 per cent, so not the dramatic increase of going to a minimum of 2.2 per cent,” he said.

Malinauskas said he hoped the Bill would pass the Lower House this week to move to the Upper House in the next sitting week.

“It is our hope that now that a broad agreement has been reached between both unions and business that we can now enjoy the support of the Upper House and I would certainly hope that David Speirs would come to the party and provide Liberal Party support for this legislation so this issue can be dealt with,” he said.

Malinauskas said the Government had also committed to a review of the management of the scheme, including having a “close analysis” of what other states are doing for improvements.

“And then in five years’ time, in 2027, the Government is committed to seeing a broader review of the scheme,” he said.

SA Unions secretary Dale Beasley said “retaining the Summerfield principles is a significant improvement to the situation that workers faced a fortnight ago”.

“It’s certainly not perfect; I don’t think we should have gotten to this point to begin with,” he said.

“Hopefully the Government when we come up against challenges like these in the future will open the dialogue far earlier and hopefully before legislation has been put on the table.”

Shop workers’ union secretary Josh Peak said “there is no doubt that this new proposal is a significant improvement on the legislation that was before the parliament a fortnight ago and means that our most severely injured workers are going to be protected from further change”.

“Not everything about this plan has our wholesome support but we do believe that this proposal represents a significant improvement on the previous bill,” he said.

Australian Nursing and Midwifery Federation state secretary Elizabeth Dabars said “this has been a harrowing experience most of all for the workers affected by it”.

“We don’t like every aspect of this legislation, we do think that ultimately workers are still negatively affected but, that said, it is a vast improvement on what we were presented two weeks ago,” she said.

“We look forward to the root and branch review that we have called for.”

Business SA chief executive Martin Haese said: “Business SA called upon the former Marshall Government to address this matter in 2021. They chose not to so on that level we commend Premier Malinauskas for leading this change.”

“However let’s not forget that over the last two years the business community has borne the brunt of some extreme disruption,” he said.

“What we on behalf of the business community in South Australia do not want to see is a pronounced increase in return to work premiums. So a lower premium for employers in this extremely uncertain environment is a better premium.”

Australian Hotels Association SA boss Ian Horne said “we endorse the position taken by Business SA on behalf of a number of organisations”.

“Our industry has certainly bore the brunt of COVID for two years… the last thing our members need… is the threat of escalating workers’ compensation fees,” he said.

“So we also call on the crossbench and the Opposition to work with the Government to get this legislation through as a priority.”

In a statement to InDaily, Opposition leader David Speirs did not say whether the Liberals would support the new Bill, but accused Labor of “playing policy on the run”.

“Peter Malinauskas succumbed to union pressure and tried to claim his backflip as a brilliant midnight deal when in actual fact he’s been forced to clean up his own mess,” he said.

“This is like an arsonist setting fire to their own house and then getting credit for putting out the blaze.”

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