Return To Work Corporation Of South Australia (Crown Claims Management) Amendment Bill Committee Stage

LEGISLATIVE COUNCIL
20TH JUNE 2017

Return To Work Corporation Of South Australia (Crown Claims Management) Amendment Bill

Committee Stage

In committee.

Clause 1.

The Hon. T.A. FRANKS: I rise to ask the minister if he has been provided with a cheat sheet or some sort of fact sheet with some 10 or so questions that I asked at the second reading stage to provide answers to, or should I just start to read them out again?

The Hon. P. MALINAUSKAS: Yes.

The Hon. T.A. FRANKS: Excellent.

The Hon. P. MALINAUSKAS: I believe the Hon. Tammy Franks asked about the increased cost for Education, particularly in the area of special needs. Government agencies, including Education, are already fully budgeted for future costs associated with workers compensation claims. The proposed arrangements will result in no net expenditure increase but rather a change in the nature of expenditure over time from the direct costs of workers compensation which will phase down to a payment to ReturnToWorkSA.

I understand that on 31 May the Hon. Ms Franks asked a question regarding the AEU's concerns that principals will spend more time in the tribunal. The proposed changes will not impact on principles. DECD has a central Injury Management Unit that will continue to have oversight of work injury claims and will liaise with the claims agents regarding any disputes that may arise. It was also asked what is the government's motivation or was this associated with privatisation. The minister has answered this question in the other place and made it very clear that it is not part of some conspiracy theory in aid of privatisation or 'fattening the pig'. As the minister himself said, 'There is no market and there is no pig.'

There was a question regarding no evidence that the system is broken and whether the public sector is underperforming. The rationale for change is not based on the performance of the public sector, as previously stated. It is about consistency, efficiencies and streamlining the management of work injuries. ReturnToWorkSA has made significant improvements in the quality and consistency of claims management services to over 50,000 registered employers and their workers in the state over the last two years. The government considered whether there were any opportunities for the Crown to also benefit from strategies that ReturnToWorkSA has employed.

Taking into account that ReturnToWorkSA is solely focused on work injury claims as its core business, it makes sense to streamline the management of work injury claims for the Crown. The Crown, although one employer, operates in silos with the individual agencies replicating claims management processes. There is no overarching risk management approach and most agencies have developed their own processes and practices in the management of their work injury claims. ReturnToWorkSA has developed IT systems and data analytics that would be of huge benefit to the Crown in identifying and managing risks. This level of data capability is currently unavailable within the Crown.

I believe the number of staff impacted was a source of concern. The Commissioner for Public Sector Employment issued a communication in May to all agency chief executives stating that over the next 12 months, there would be no reduction in Crown injury management workforce as a result of the transition of work injury claims management to ReturnToWorkSA. Crown injury management staff will continue to be required to manage the current claims, as only claims with a date of injury on or after 1 July will be managed by ReturnToWorkSA. Some of these claims may require management for up to three years (inclusive of medical entitlements).

In addition, there will still be a requirement for all agencies to have ReturnToWork coordinators in accordance with section 26 of the Return to Work Act 2014 to work with ReturnToWorkSA to support their injured employees in their recovery and return to work.

I understand you are wondering whether public sector claims managers have to train EML and GB case managers. My advice is the answer is no. ReturnToWorkSA's claim management agents are skilled and trained in the management of work injury claims.

Regarding your question on consultation, there has been extensive engagement and consultation with key partners regarding the implementation of the transition. This has included regular fortnightly meetings with the Commissioner for Public Sector Employment, SA Unions and the PSA regarding the transition. All unions and associations have received formal correspondence regarding the proposed changes.

Governance and working committees are in place with key government agencies to oversee and contribute to the implementation of the transition. An information session for all government injury management and HR staff was presented by the Commissioner for Public Sector Employment. Crown injury management staff have been extensively engaged in a variety of workshops regarding the changes for the opportunity to consult on the implementation of ReturnToWorkSA's service delivery model.

Meetings with agency CEs, CFOs and HR officers have been held to discuss the transition, provide information on the financial impacts and discuss the new service delivery model. The government project team continues to work with all key partners to ensure that all appropriate consultation and engagement continues to occur.

How have public sector employees been informed of the changes? I am advised that public sector employees have been provided with a number of written communications from the Commissioner for Public Sector Employment, as well as a face-to-face information session run by the commissioner. There have also been eight workshops run by the Office for the Public Sector for public sector injury management staff. There is also a website that provides information on the changes, as well as the opportunity for public service staff to ask any questions. There are also frequently asked questions on the Office for the Public Sector website.

How have injured workers been engaged or communicated with? I understand that until such time as the bill is determined, it is deemed unnecessary to contact injured workers.

I understand that one of your questions, the Hon. Tammy Franks, was: why is Minda, RSB and also RDNS exempt from the changes?

The bill allows for these instrumentalities to be exempt from the commencement date that will apply to the rest of the Crown. In respect of each of these instrumentalities, the minister has given clear assurances that we will work out a way so that they are not negatively impacted. ReturnToWorkSA is working with the entities in question to explore the most appropriate insurance arrangements for them. The options to be explored include private self-insurance or premium paying employer in the general registered scheme. As mentioned, the minister has made it clear that he will ensure that these organisations are not negatively impacted by this proposal.

Finally, I understand you are asking why the Return to Work Corporation of South Australia Act is being amended. The Crown cannot form part of the registered ReturnToWorkSA premium paying scheme without a legislative amendment. As the bill represents a change to the administration of the Crown scheme, not a change to the entitlements within the scheme, it is appropriate that the amendment be to the Return to Work Corporation of South Australia Act, which deals with the administration and operation of the Return to Work Corporation.

The Hon. T.A. FRANKS: I thank the minister for his answers from the information that he has been provided with. I note that in fact in my second reading contribution I said that I was not at all engaging in the debate about whether or not this was fattening up the pig, so I found it interesting that that was one of the answers. I am not sure that the minister covered the response on asking for the Bentley-Latham report to be tabled and how much has been spent on the Bentley-Latham report. They were two glaring omissions in the answers to the questions I put on notice in the second reading debate.

I also asked quite specifically for the number of claims managers currently employed in the public sector to be provided. When I asked for the consultation process, I did not ask for meetings, I asked for a list of the external and internal stakeholders to be provided. I will add to that: at what point were they engaged in this consultation? Was it in the drafting of the bill, or was it after the bill was already prepared? If the timing could be provided, that would be useful.

I did raise concerns that have been raised with me by the AEU of South Australia. They had had a meeting with me the day before I made my second reading contribution; as we know, this bill has been a somewhat rushed process. The AEU has now had time to write, I think, to other members of parliament, but certainly to myself and so I reiterate some of their concerns. They have raised concerns that I would certainly like addressed when we resume at clause 1. I note that we are probably going to report progress now.

They have flagged that the loss of DECD self-insured status will result in the following occurrences: the loss of experienced DECD claims management staff; the imposition of a return‑to‑work premium on schools and preschools; increased costs overall to DECD schools and preschools; increased administrative accountability for leaders; increased administrative workload for leaders; salaried costs of injured workers performing modified duties being met by schools and preschools; the loss of early intervention support; increased legal disputation; and DECD schools and preschools losing control of human resources and human resources outcomes.

I ask the minister to take that on notice and bring back a response in the continuation of the debate on this bill in clause 1. I also seek leave to table the letter that the AEU of South Australia has sent to myself, dated 2 June 2017, outlining their concerns, and ask that the minister respond to that letter in the debate.

Leave granted.

The Hon. T.A. FRANKS: Further, given that we have not been provided with the payment amount for the Bentley-Latham report, can the minister confirm that amount? Certainly, I have been told that it is $111,288.02. It would be good to know whether the price there is indeed right or not. With that, I have several other questions, but it would have been good to get all the questions answered as we commenced clause 1. I certainly look forward to the response to the AEU's written verbalised concerns.

The Hon. P. MALINAUSKAS: We will take some of those questions on notice. The one that did jump out from the Hon. Ms Franks that we do have an answer for at hand is, of course, the number of staff working in claims management. I am advised that number, as mentioned earlier, is approximately 140 FTEs.

The Hon. R.I. LUCAS: Just before we report progress and apropos of the earlier discussion, can I just quote for the minister's benefit the actual sections from pages 26 and 27 of the Bentley‑Latham report in relation to management expenses. They relate to this issue about ReturnToWorkSA saying to the government that they are going to reduce costs because they are more efficient.

What Bentley-Latham have said to the government is that currently the level of management expenses in the insured scheme—that is, ReturnToWorkSA scheme—is significantly higher than in Crown agencies. They say that the current costs for the insured scheme are around 0.5 per cent of remuneration, which is 39 per cent of 2015–16 injury year claim costs. Page 26 of the report notes that the equivalent figure for existing Crown agencies is 28 per cent of 2015–16 injury year claim costs, or 0.3 per cent of total remuneration.

Management costs are actually 28 per cent of total costs in the existing arrangements that are in SAPOL and DECD and others, and it is actually 39 per cent in ReturnToWorkSA. Clearly, there are no savings to be achieved, according to Bentley-Latham. My question when we reconvene is: does the government accept what Bentley-Latham, their own confidential advisers, have said, 'Hey, it's actually more efficiently being handled in terms of management costs and expenses by SAPOL, DECD, Health and a variety of other areas as opposed to the equivalent costs in ReturnToWorkSA'?

The Hon. P. MALINAUSKAS: Again, we will take those questions on notice.

Progress reported; committee to sit again. 

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