Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The government is committed to ensuring that Australian workplaces are safe, flexible and productive and to reducing the risk and impact of workplace injury and disease.

It is vital that people injured in the course of their employment are given every opportunity to get better and return to work.

This requires a modern workers compensation scheme that meets the needs of today's workforce and is sustainable into the future.

Early and effective rehabilitation, as well as appropriate financial compensation, are essential to helping people recover and get back to doing the things that are important to them, including their jobs.

The Safety, Rehabilitation and Compensation Act 1988—also known as the SRC Act—covers Australian and ACT government employees and the employees of 33 corporations licensed under the Comcare scheme.

In 2012, the now Leader of the Opposition, as workplace relations minister, commissioned the first comprehensive review of the scheme since its introduction in 1988. When the then Hawke government minister Brian Howe introduced the SRC Bill into parliament, he stated that the aim of the changes was to provide assistance to those employees most in need—the long-term incapacitated.

Unfortunately, since 1988 the scheme has had piecemeal amendments that have made it out of step with community standards and evidence based practices.

The 2012 review commissioned by the Gillard government found that the scheme does not give injured employees enough support and incentive to return to the workplace. In addition, the scheme allows injured employees to make claims for conditions that are unrelated to work and to undertake treatments that are not evidence based. People are not getting back to work as quickly as they should and this is causing costs to increase and creating negative perceptions of the scheme within the community.

Indeed, even the left-wing ACT Green-Labor government has criticised the Comcare scheme, saying:

The Comcare system is quite burdensome, not only for claimants but for their employers as well. The focus we want to see is recovery and rehabilitation for our staff and getting them back to the workplace. The studies show that if you get people back to work earlier, their lives are better in the long run..

Using the recommendations from the review as a starting point, building on feedback from stakeholders and also adopting some reforms that have been advanced by state Labor governments, this government is proposing a package of reforms that will rehabilitate people and get them back to work, target support and improve the scheme's integrity and viability. The reforms will also ensure that loopholes in the legislation that allow people to take advantage of the scheme are closed.

Importantly, and unlike most of the state and territory schemes, the proposed measures will ensure that the Comcare scheme continues to provide eligible injured employees with income payments until pension age and lifetime medical and rehabilitation expenses.

Ensuring a stronger focus on rehabilitation and return to work

With regard to ensuring a stronger focus on rehabilitation and return to work the bill includes a number of changes to assist employers to meet their rehabilitation obligations and engage more effectively with injured employees in the return-to-work process.

The amendments facilitate this cooperation by better enabling employees and employers to work together. It is important that employers are prepared to accept responsibility for managing injuries, ensuring support where injuries occur and enabling people to get back to work as soon as possible.

Employers will have an increased responsibility and greater incentives to provide alternate work or reduced hours to injured employees.

Injured employees will be encouraged to participate actively in their injury management and rehabilitation. Where they are able to do so, they will be required to seek, engage and remain in suitable employment.

The bill also strengthens an employee's access to rehabilitation and, in specific circumstances, Comcare will have the power to commence or take over rehabilitation.

A large body of evidence based research has established that many health problems can benefit from work based rehabilitation and an earlier return to work. Using this evidence as a basis for improvement, the compensation payment system has been restructured to provide targeted financial incentives to return to some form of work as soon as safely possible.

Systemic incentives to remain on workers compensation for extended periods will be removed by providing for more graduated reductions in income replacement payments and reducing compensation payable where an injured employee refuses employment while having a capacity to earn in suitable employment.

Targeted support for injured employees

There will be targeted support for injured employees. Many employees, when they are injured, need to take time off work to recover and will often draw on their savings or leave entitlements while their workers compensation claim is being considered. If claims are not processed quickly, leave entitlements and savings can be quickly exhausted, access to medical treatment can be delayed and this, in turn, can impede recovery and eventual return to work.

To reduce the financial stress of illness and injury, the scheme will now provide for provisional medical payments of up to $5,000 before a claim is determined. The employer will have immediate rehabilitation responsibilities.

The amendments will also ensure that the money spent on medical treatment and post-injury care and support services is better targeted and that services are provided by trained professionals.

Professional, monitored, post-injury care will be provided to employees for the first three years of their injury, with uncapped, long-term or life-long care available to the catastrophically injured after this time.

Employees who have been seriously injured will still have access to lump sum payments to help them achieve a better quality of life. Under the proposed changes, the maximum lump sum payment amount will be increased from $242,000 to $350,000.

For those with less serious injuries, these payments will be more accurately scaled to allow for higher payments for those who need more support.

More timely access to compensation payments will be achieved with the introduction of time frames for determining claims and resolving disputed claims, as well as improved information-gathering powers. Employers will also be required to lodge claims more quickly, and within specified timeframes, once they are notified of a claim.

To provide assistance to employers in meeting their obligations under the new time frames, the amendments will enable more accurate calculation of income replacement. This will better take into account today's labour market conditions and the changing industrial profile of employers in the scheme.

To ensure that there are no gaps or inequities in the payment of entitlements to workers nearing pension age, eligibility for income replacement will be linked to the national age pension age and the five per cent reduction in compensation payments for employees accessing superannuation benefits will be removed.

Scheme integrity and viability

With regard to maintaining scheme integrity and viability the bill also seeks to ensure that the workers compensation system deals with employment-related injury and disease.

When the government of the day introduced the SRC Act 27 years ago, it recognised the need to ensure that employers were not paying for non-work related conditions and introduced changes that required employees to show a close connection between their condition and the employment in which they were engaged.

Despite this intention, this distinction has been blurred over time through judicial interpretation of the legislative provisions and unreasonable constraints have been placed on employers ' management of the workplace. This has resulted in increased premiums and pressures on scheme sustainability.

The amendments will distinguish more clearly between work and non-work related injuries and limit the payment of compensation to employees who have sustained injuries due to work or the workplace. Existing provisions will be strengthened to require a clear causal connection with work before compensation is payable.

The amendments will also clarify the matters to be taken into consideration for psychological claims and introduce new thresholds for specified pre-existing conditions such as heart, brain and spinal injuries to ensure that th e scheme is accepting liability for conditions that are work-related.

As the workers' compensation system was never designed to prevent employers taking reasonable action to manage their employees, the proposed amendments will clarify the range of reasonable management actions that, when reasonably undertaken, should not give rise to compensation claims.

In order to address rapidly escalating scheme costs and ensure the long-term viability of the scheme, Comcare will be permitted to establish schedules that specify the amounts payable for medical treatment and medical reports, and legal services obtained by claimants. Currently, there are no limits on the amounts that Comcare pays for these items.

Schedules will not only reduce lengthy dispute time frames but provide greater certainty and transparency for service providers and claimants.

Scheme costs will also be reduced by excluding overtime and allowances in the calculation of compensation payments after the first two years.

The integrity of the scheme will be underpinned by a three-stage sanctions regime in which employees who do not meet their medical treatment and rehabilitation obligations will have their compensation rights suspended or cancelled.

Most people are willing and eager participants in the injury management and rehabilitation process and welcome every assistance to recover and resume their normal lives. Those who refuse to utilise the scheme ' s resources to get better and return to work will no longer be able to do so with impunity.

In recognition of the government's commitment to the unique nature of military service, Australian Defence Force (ADF) members with coverage under Part XI of the SRC Act will be exempted from all but two of the proposals being introduced in the bill.

These proposals relate to the calculation of permanent impairment compensation and will ensure that a member or former member of the ADF will not receive less compensation than an employee covered by the Comcare scheme with the same level of impairment. The government's agreement to these changes is a reflection of our commitment to recognising the unique nature of ADF service.

The government will also create a new act to separate ADF members and former members from the existing SRC Act.

The Comcare scheme is one of the few remaining Australian workers' compensation schemes that provides, and will continue to provide, income payments until pension age and lifetime medical and rehabilitation payments. This bill will ensure that we have a fair and sustainable long-tail scheme into the future—one of the only remaining in Australia.

A majority of these reforms have been inspired by the Review commissioned by the now Leader of the Opposition or from reforms made by state Labor governments, including from the Bracks government in Victoria.

These reforms ensure that the scheme will remain one of the most generous in Australia but the focus will shift towards getting people back to work rather than just providing compensation.

The government's reforms will be better for workers by promoting injury prevention, but supporting those who are injured to recover and, most importantly, assisting them to get back to work.

I urge all members to support the changes in this bill and commend the bill to the House.

1 ACT Minister Mick Gentleman, 'ACT dumps Comcare', Canberra Times, 26 February 2015

Debate adjourned.