GETTING WORKCOVER BACK ON TRACK

17 June 2007

WorkCover and the employer lobby have mischievously misrepresented WorkCover's financial situation to argue for cuts to worker entitlements, yet both are failing to meet their own responsibilities to injured workers.

SA Unions President, Nick Thredgold says a discussion paper commissioned as a precursor to the state government's WorkCover inquiry explodes myths about WorkCover's performance and will be a great asset in helping to inform those intending to lodge submissions to the inquiry.

Mr Thredgold says the discussion paper was prepared by an independent workers' compensation expert, Dr Kevin Purse, who is with the Hawke Research Institute of UniSA.

"Dr Purse has examined WorkCover without fear or favour, and cut through the hysteria and misinformation generated by self-interested parties such as Business SA."

His dispassionate analysis contains a series of suggestions and warnings that SA Unions will consider in forming its submission to the inquiry, and which it is hoped other interested parties will also take into consideration.  They include -

Debate about WorkCover's financial situation has been distorted by a simplistic preoccupation with the scheme's unfunded liability.  Perversely, the criticisms have come at a time when WorkCover's bottom line is trending upwards.  Asset growth ($1.12 billion to $1.288 billion, net increase of $168 million) has outstripped the estimated unfunded liability ($652 million to $694 million, net increase $42 million), which is a very rubbery figure in any event.

WorkCover's excellent investment performance has been ignored, which means its liabilities have been seriously overstated.

A more accurate and statistically robust assessment of performance would reduce the scheme's unfunded liability by $300 million.

It is counterproductive to financially penalise workers for poor management by WorkCover and employers.

Incongruities with WorkCover's proposals to adopt a compensation system modelled on that of Victoria.  Dr Purse says WorkCover and some employer groups are attempting to pressure the state government into reducing weekly payments in line with Victoria, yet Victoria has acknowledged deficiencies in its system and is actually looking to improve payments similar to South Australia.

WorkCover and employers have meanwhile failed to include positive aspects of the Victorian scheme such as the availability of common law damages.

The key to improving WorkCover's performance is boosting return to work rates through better management and improved support for injured workers.  Cuts to compensation are no "incentive" to return to work - but simply a recipe for cost shifting for work injuries on a massive scale.  Yet that's what WorkCover and the business lobby is demanding, while hypocritically seeking to have their return to work obligations watered down.

"This discussion paper reveals the real priorities for getting WorkCover back on track.  It's not the inflated arguments of the rabid business lobby which wants to slash and burn compensation for injured workers, but rather it's about improved management, ensuring employers meet their responsibilities and more accurate financial assessment."

"We must not lose sight of WorkCover's reason for existence - it's there to provide support for injured workers and get them back to gainful employment.  Fair support and compensation assists that process and ultimately benefits business through improved productivity."

"SA Unions is working on a comprehensive submission to the state inquiry, but suffice to say one of its central arguments will be to reject the WorkCover Board's recommendation to slash worker entitlements as unnecessary and counterproductive", Mr Thredgold says.