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| Workers Compensation Legislation Amendment (Benefits) Bill 2008 |
| Monday, 01 December 2008 | ||||||
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Mr MIKE BAIRD (Manly) [10.29 p.m.]: I lead for the Opposition in debate on the Workers Compensation Legislation Amendment (Benefits) Bill 2008. As we embark upon debate on the legislation, I note that the Minister in his agreement in principle speech laid out the premise of the bill, and my speech will be directed towards assessing whether the bill achieves those objectives. I await the Minister's comments in his reply. During the Minister's speech, he stated:
The Minister also stated that the bill contains "an incentive for large employers to improve workplace safety". The bill's premises are admirable and are supported by the Opposition. Certainly the Opposition believes that potential exists for the bill to go towards addressing those premises. But what I should note and concentrate on during debate is how the Government and this State have performed in addressing some of the key statistical indicators and unfortunate circumstances around the issue of people losing their life at work. In 1987-88, 209 fatalities occurred at work. The incidence of workplace fatalities has decreased, as reflected in the most recent statistics, which for 2006-07 show 137 incidences. Those statistics should be a sobering reminder for all members of the House, particularly as we approach debates on this issue, that a great deal of work remains to be done to reduce workplace fatalities to an absolute minimum. Whatever way one wants to approach the topic, the incidence rate for 2006-07 at 4.7 fatalities per 100,000 workers is not acceptable to any member of the House. We therefore must continue to facilitate change, work with businesses and devise terms and conditions relating to employment practices to ensure that workplace fatalities become a thing of the past. The statistics indicate that we have moved forward, with a reduction in the rate of workplace fatalities of approximately 34 per cent based on figures for 1987-88 and 2006-07. But let us not forget that every single statistic represents the loss of a life which, when considered as a single event, is tragic enough, but more so when the incidence is extrapolated. What does the bill propose to do? First, in amending the Workers Compensation Act 1987 it aims to increase the lump sum death benefit paid to the estate of a worker who has been killed as a result of a workplace injury from $343,550 to $425,000. I will deal in greater detail later with the very nice round figure that has been selected because I think that figure needs to be explored a little further. The increased amount will be payable in respect of death that occurs on or after 24 October 2007, and is payable in addition to funeral expenses and weekly payments for dependent children. Lump sum death benefits also will be available to firefighters as well as emergency and rescue workers. Secondly, the bill provides that the lump sum death benefit must be paid to a deceased worker's estate, if the worker dies leaving no financial dependants. Thirdly, it removes the discretion to reduce the amount payable as a lump sum death benefit to a deceased worker's dependants on the basis of partial financial dependency without preventing apportionment of the amount of the death benefit among multiple dependants. Those two parts of the third objective make sense because they avoid the trauma of trying to prove dependency or co-dependency in probably the most difficult circumstances that a family member would ever face. The bill also introduces an alternative method of calculating workers compensation insurance premiums for large employers, requiring them to launch a security deposit or to guarantee to provide security for the payment of premiums. Given the lateness of the hour and that the shadow Minister is a member of the upper House, I will address the main tenets of the debate and try to be brief, particularly bearing in mind the legislative program that members face over the next 48 hours. The theory of the bill is reasonable but, as usual, the facts require testing and questioning in many respects. I look forward to the Minister or the Parliamentary Secretary addressing the points I discuss when they reply to the debate, as they attempt to address or unravel some of the concerns. The lump sum death benefit amount is increased and is proposed to be $425,000, but what is not clear is how that amount was arrived at. Is it indexed in some way, shape, or form, to a cost-of-living parameter? Does it ride on the back of actuarial advice? Obviously, the amount has been based on expert advice. The increased cost will amount to approximately $11 million, based on the numbers that I have been able to use. But the real point is why $425,000 has been chosen. Bearing in mind the current interest rate, which has been reduced to 4.25 per cent unless I am mistaken, and applying that to $425,000 to obtain a weekly amount, the result is still below the statutory level that is required for pensions. That begs the question: Is this too low, or is it too high? It is difficult to ascertain the true position without information being shared. The Opposition looks forward in the concluding stage of the debate to the Government providing insight into how the number was determined, why it makes sense, why it should not be $500,000 and not $400,000, and why that particular number has been selected. Certainly an increased premium accompanies the higher amount, notwithstanding the assurances that have been given. I will discuss premiums in more detail shortly. The Opposition would like some science applied to the calculation of lump sum benefits. I hasten to add that the Opposition does not begrudge the higher payment: certainly, the amount seems too low as it currently stands. The Opposition also appreciates that a number of stakeholders have been involved in discussions. However, the Opposition also believes that it is not unreasonable to expect the Government to give some insights, provide details, and reveal the methodology behind determining that figure. The bill also refers to "large employers", but does not define "large employers" despite that provision being fundamental to the whole premise of the bill. I will discuss later certain large employers in the context of alternative premium calculations. From the discussions I have had with industry, a large employer might be categorised as an entity that pays $1 million in premiums, but we nevertheless need to understand who a large employer is. The definition is fundamental to the calculation of premiums. Outside the amount, the second main point is concern relating to premiums. The Opposition's understanding, which has been formed through discussions with industry and stakeholders, is that basically 92 per cent of people will not be affected by the calculation of premiums, and most premiums will remain pretty much unchanged. The onus is on the Government to confirm that. When changes are introduced, we need to understand in the context of premiums why some commentators believe that, if there is an impact, it will be almost negligible because almost everyone involved will not be affected by it. However, clearly some people will be affected by it, and the Government should provide the figures. How many people will be affected? What is the quantum? Are they happy with the resulting benefits? I ask the Minister or the Parliamentary Secretary to respond to those questions during their reply. Add to: Write Comment
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