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- 18 November 2003
Workers Compensation Amendment (Insurance Reform) Bill
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Page: 5136
Second Reading
Deferred division
Mr SPEAKER: Order! The House will now proceed with the deferred division on the question, That the word stand.
The House divided.
Ayes, 52
Ms Allan
Mr Amery
Ms Andrews
Mr Bartlett
Ms Beamer
Mr Black
Mr Brown
Ms Burney
Miss Burton
Mr Campbell
Mr Collier
Mr Corrigan
Mr Crittenden
Ms D'Amore
Mr Debus
Mr Gaudry
Mr Gibson
Mr Greene | Ms Hay
Mr Hickey
Mr Hunter
Mr Iemma
Ms Judge
Ms Keneally
Mr Knowles
Mr Lynch
Mr McBride
Mr McLeay
Ms Meagher
Ms Megarrity
Mr Mills
Mr Morris
Mr Newell
Ms Nori
Mr Orkopoulos
Mrs Paluzzano | Mr Pearce
Mrs Perry
Mr Price
Dr Refshauge
Ms Saliba
Mr Sartor
Mr Scully
Mr Shearan
Mr Stewart
Mr Tripodi
Mr Watkins
Mr West
Mr Whan
Mr Yeadon
Tellers,
Mr Ashton
Mr Martin |
Noes, 36
Mr Aplin
Mr Armstrong
Mr Barr
Ms Berejiklian
Mr Brogden
Mr Cansdell
Mr Constance
Mr Debnam
Mr Draper
Mr Fraser
Mrs Hancock
Mr Hartcher
Mr Hazzard | Ms Hodgkinson
Mrs Hopwood
Mr Humpherson
Mr Kerr
Mr McGrane
Mr Merton
Mr Oakeshott
Mr O'Farrell
Mr Page
Mr Piccoli
Mr Pringle
Mr Richardson
Mr Roberts | Ms Seaton
Mrs Skinner
Mr Slack-Smith
Mr Souris
Mr Stoner
Mr Tink
Mr Torbay
Mr J. H. Turner
Tellers,
Mr George
Mr Maguire |
Pair
Question resolved in the affirmative.
Amendment negatived.
Motion agreed to.
Bill read a second time.
In Committee
Clauses 1 to 4 agreed to.
Mr CHRIS HARTCHER (Gosford) [3.40 p.m.]: I move the following Opposition amendment:
Page 4, schedule 1. Proposed section 154B, lines 19-22. Omit all words on those lines.
The amendment omits subsection (5) of proposed section 154B, which provides:
The liabilities of the Nominal Insurer as insurer under a policy of insurance can only be satisfied from the Insurance Fund and are not liabilities of the State, the Authority or any authority of the State.
Quite extraordinarily, the employers of the State are required by the Government to pay money into the fund, and the Government says by statute that it will administer that fund, yet though it administers the fund the Government accepts no responsibility for it. The Government says it is setting up the fund, making people pay money into it, and it is going to manage and control it, yet it is not its responsibility. Whose responsibility is it? One has to go back to the 1987 Act to find out that responsibility rests nowhere, because it is not clear from the 1987 Act as to who is responsible for the fund.
The Auditor-General and the Solicitor General have both at various times drawn attention to the fact that nobody accepts responsibility for the fund or its failure. That leads to the Government having a fund, which, if it cannot meet its responsibilities, the Government is not responsible for, yet the Government retains the power, under the 1987 Act, to levy the employers, that is those people who hold premiums for workers compensation insurance, with any deficit. The purpose of this proposed subsection is to reinforce the idea that the employers of New South Wales have to pay money for workers compensation insurance, have no control as to how the premiums are calculated, have no control over the management or administration of the fund, yet at the end of the day they will be saddled with the bill if the fund goes broke.
The Government needs to assess who is going to accept responsibility for workers compensation. We are not trying to amend the 1987 Act—that would be outside the leave of the bill—so the Government will retain the power to impose levies on employers. The purpose of this amendment is to draw attention to the fact that the time has come to work out who is responsible for the fund. If the Government has an answer, let it say so. The Solicitor General gave an opinion; the Auditor-General gave an opinion. The purpose of this subsection is to reinforce that opinion. Payments are made into this fund for thousands of workers employed by the private sector and the public sector. The Government is saying that if the fund goes broke it will not accept any responsibility. Proposed section 154B says that the liabilities of the fund can only be met from the fund, and, if the fund is in deficit, they are not liabilities of the State, the authority or any authority of the State.
The Government is walking away from accepting any responsibility at all. It wants all the power, all the money, but none of the responsibility. That is simply not good enough. It flies in the face of all economic and corporate responsibility. No corporation would be allowed to set up a fund and walk away from responsibility for it. We have laws that make directors liable for recklessly incurred expenses. That is why the authorities have attempted to extradite and prosecute Christopher Skase and other people, because they were responsible for organisations but ran them and their finances into the ground. The Government can run this fund into the ground but, according to the Act, it has no liability.
Everybody in this State needs to be conscious of the implications of this provision. There has not been a lot of debate about it, because the legislation is being rushed through Parliament. Standing orders have been suspended, not once but twice, to force it to debate, and there was another suspension of standing orders a few minutes ago. The Government is arrogantly determined to ensure that Parliament does not subject this legislation to proper scrutiny.
When I sit down the Parliamentary Secretary will simply read out a response supplied to him, saying that the Government does not agree with the amendment, that the fund is self-sustaining, that the Government has done wonderful things with workers compensation premiums, and that according to some actuarial reports it has brought down the deficit. A lot of figures are always thrown about when one debates workers compensation, but the bottom line is that the Government wants to control the employers' money but it will not accept any responsibility for it. Sheree Martin wrote to me:
On November 5 2002, I attended a meeting with the Hon. Craig Knowles in his Ingleburn office.
We spoke to Mr Knowles about poor medical and nursing practices, failure to resuscitate patients, poor medical cover through the hospitals—
The CHAIRMAN (Mr Mills): Order! I remind the honourable member for Gosford that the Committee is dealing with an amendment to workers compensation legislation. Attempting to read a statutory declaration into Hansard is out of order. I ask the honourable member for Gosford to return to the subject of his amendment.
Mr CHRIS HARTCHER: I am, Mr Chairman, because I am relating the experience of a worker in this State who has workers compensation.
When Ms Fraser mentioned Jennifer Collins … Mr Knowles became angry—
Ms Marianne Saliba: Point of order—
The CHAIRMAN (Mr Mills): Order! The honourable member for Gosford will resume his seat.
Ms Marianne Saliba: What the honourable member is doing is not relevant to the debate. The Chairman should expel him from the Chamber.
The CHAIRMAN (Mr Mills): Order! The point of order is upheld.
Mr Carl Scully: That was grossly out of order.
Mr CHRIS HARTCHER: To hear the Leader of the House—
The CHAIRMAN (Mr Mills): Order! The honourable member for Gosford will return to his amendment.
Mr CHRIS HARTCHER: I am only too pleased to return to my amendment. The honourable member for Illawarra is yelling out remarks and the entire gang—the honourable member for Bathurst, the Leader of the House, and the honourable member for East Hills—are all standing there like spear carriers ready to throw their spear. Employers are leaving this State, they are pulling their money out of New South Wales.
Mr Carl Scully: Back to the bill, are we?
Mr CHRIS HARTCHER: I was always on the bill. I was talking about workers compensation. Employers are leaving this State because they cannot afford the premiums. In the border areas near Queensland there are examples of people relocating from Kingscliff to the Gold Coast to get the benefit of the far lower premium structure in Queensland. Similarly on the Victorian border, employers are doing the same from Albury to Wodonga. Employers proposing to invest in this State will walk away from their investment proposals when they see the enormous cost of workers compensation premiums.
I have previously given the example of the coal industry. It estimates that it is paying an extra $1 a tonne because of workers compensation premiums in this State. This greatly adds to the competition problems it faces from Queensland, Indonesia or South America coal and trying to maintain its markets in Japan and, to a lesser extent, China. All these costs impose massively on industry in this State; they are a burden and reflect the Government's failure to administer workers compensation. It is extraordinary that the Government wants to take the money off people and yet deny those very people the benefit of having any say in the administration of the fund. That is why I have moved the amendment, which we will divide on.
Mr GRAHAM WEST (Campbelltown—Parliamentary Secretary) [3.51 p.m.]: The Government opposes the amendment, which would undermine a fundamental tenet of the bill. The bill establishes a Nominal Insurer to enable a seamless transition from the current managed fund insurers to a more efficient, centralised scheme for the provision of workers compensation while minimising disruption to the employers and workers of this State. The Nominal Insurer is not merely some fictitious entity devised by the Government; the Nominal Insurer is an integral component of the goal of the bill, to allow the scheme funds to be centralised into a single fund to enable the most effective investments of the scheme funds and the performance of the insurance functions under the scheme.
The Workers Compensation Act 1987 provides for insurers to hold scheme funds in trust, an arrangement that directly corresponds with that proposed in the bill. Section 196 (3) of the Act provides that scheme funds cannot be applied to the Consolidated Fund. Subsection (2) provides that insurers have no beneficial interests in scheme funds, which are held in trust by insurers for the purposes for which the scheme is established, that is, for the benefit of employers and workers.
The bill preserves this arrangement. The Workers Compensation Insurance Fund, to be held by the Nominal Insurer, is also a purpose trust and the bill provides that scheme funds cannot be applied to the Consolidated Fund. The bill expressly states that scheme funds are to be held by the Nominal Insurer for the purposes for which the scheme is established, that is, for the benefit of employers and workers. The Nominal Insurer will simply step into the shoes of the current managed fund insurers, while the consolidation of scheme funds and the establishment of a single entity will allow the scheme to be managed more efficiently. The amendment proposed by the Opposition is without merit.
Mr BARRY O'FARRELL (Ku-ring-gai—Deputy Leader of the Opposition) [3.53 p.m.]: I acknowledge the Parliamentary Secretary's reply and I continue to support the arguments advanced by the honourable member for Gosford. But the Opposition remains concerned that it can be said, "slander and she could lose her home or career"—
The CHAIRMAN (Mr Mills): Order! The Deputy Leader of the Opposition will cease reading from the statutory declaration and resume his seat. I direct the attention of the honourable member for Davidson, who now has the call, to the amendment moved by his colleague the honourable member for Gosford. I remind him that strict rules of debate apply in Committee.
Mr ANDREW HUMPHERSON (Davidson) [3.54 p.m.]: This is a matter that the former Auditor-General, Tony Harris, has referred to on a number of occasions. The deficit in the WorkCover scheme has been regarded by the current Government over a number of years as a deficit that is the responsibility of the employers of this State. Effectively it is a burden on employers and employees. But the fact is that it is the Government that actually manages and has total responsibility for the scheme. It is the Government that should carry responsibility for the deficit. It should be shown on the balance sheets of the Government. The most recent Auditor-General has been silent on it but for the purposes of good accounting, transparent and open accounting, it should be shown as a deficit, a debt in a whole-of-government sense.
The $2.98 billion deficit or debt should properly and appropriately be shown on the balance books of this State. When the Treasurer issues his accounts and his statements with the budget every year it should be shown as a deficit against the Government. Yet it is a debt that has been placed against employers. So potentially and very readily those employers, should the Government want to clear some or all of that deficit, would be paying, which would impact very directly and substantially on employees and employment. If we are going to have proper and transparent and appropriate accounting, proper transparency in every respect, this amendment should be supported. It is not appropriate to very deliberately, by way of this amendment to proposed section 154B—
Mr Alan Ashton: Lines 19 to 22.
Mr ANDREW HUMPHERSON: Correct, subsection (5), which we are seeking to excise from the bill. It is not appropriate for it to be retained. In recent years we have argued that as long as the Government has the responsibility for managing the scheme, the deficit and debts that relate to it should be shown as part of the public sector accounts. They have not been. Tony Harris indicated that very strongly and has reasserted that ever since he became Auditor-General. In terms of transparent and appropriate accounting it has to be the case. We supported transparency. When the following comments were made—"Mr Knowles said he would launch an investigation. When I left, however, I felt very worried about his relationship to Jennifer Collins"—it is clear from that statutory declaration that there were concerns about the transparency of government accounting in this State.
Mr Alan Ashton: Point of order. This has nothing to do with the bill being considered by the Committee. I ask you to direct the honourable member to bring his remarks back to the amendment before the Committee.
The CHAIRMAN (Mr Mills): Order! I uphold the point of order. The honourable member for Davidson is using the same tactic as the two previous speakers. He is well aware that members who speak in Committee should debate only the amendment under consideration by the Committee.
[Interruption]
The CHAIRMAN (Mr Mills): Order! I will direct the honourable member for Davidson to resume his seat if he continues.
[Interruption]
The CHAIRMAN (Mr Mills): Order! The honourable member for Davidson will resume his seat.
[Interruption]
The CHAIRMAN (Mr Mills): All members will resume their seats.
[Interruption]
The CHAIRMAN (Mr Mills): I call the honourable member for Davidson to order for the second time.
Mr CARL SCULLY (Smithfield—Minister for Roads, and Minister for Housing) [3.59 p.m.]: I move:
That the honourable member for Davidson be not further heard.
The Committee divided.
Ayes, 50
Ms Allan
Mr Amery
Ms Andrews
Mr Bartlett
Mr Black
Mr Brown
Ms Burney
Miss Burton
Mr Campbell
Mr Collier
Mr Corrigan
Mr Crittenden
Ms D'Amore
Mr Debus
Mr Gaudry
Mr Gibson
Mr Greene | Ms Hay
Mr Hickey
Mr Hunter
Mr Iemma
Ms Judge
Ms Keneally
Mr Knowles
Mr Lynch
Mr McBride
Mr McLeay
Ms Meagher
Ms Megarrity
Mr Morris
Mr Newell
Ms Nori
Mr Orkopoulos
Mrs Paluzzano | Mr Pearce
Mrs Perry
Mr Price
Dr Refshauge
Ms Saliba
Mr Sartor
Mr Scully
Mr Shearan
Mr Stewart
Mr Tripodi
Mr Watkins
Mr West
Mr Whan
Mr Yeadon
Tellers,
Mr Ashton
Mr Martin |
Noes, 35
Mr Aplin
Mr Armstrong
Mr Barr
Ms Berejiklian
Mr Cansdell
Mr Constance
Mr Debnam
Mr Draper
Mr Fraser
Mrs Hancock
Mr Hartcher
Mr Hazzard | Ms Hodgkinson
Mrs Hopwood
Mr Humpherson
Mr Kerr
Mr McGrane
Mr Merton
Mr Oakeshott
Mr O'Farrell
Mr Page
Mr Piccoli
Mr Pringle
Mr Richardson | Mr Roberts
Ms Seaton
Mrs Skinner
Mr Slack-Smith
Mr Souris
Mr Stoner
Mr Tink
Mr Torbay
Mr J. H. Turner
Tellers,
Mr George
Mr Maguire |
Pair
Question resolved in the affirmative.
Mr CHRIS HARTCHER (Gosford) [4.05 p.m.]: The Parliamentary Secretary did not address the fundamental issue before the Committee: who is to accept responsibility for the fund's liability? According to the Government's figures, the fund is in deficit to the tune of $2.9 billion. It was in deficit to the tune of $3.2 billion, but the Government claims that that figure has been reduced. The fund is $2.9 billion in deficit and the Government is not prepared to do anything about it, other than to say it is the employers' responsibility. The proposed section is designed simply to reinforce the fact that the Government is refusing to accept responsibility, and the Parliamentary Secretary has declined to address that salient point.
Every employer in this State needs to know whether he faces further levies by WorkCover under the 1987 Act, which requires the employer to make good the deficit of $2.9 billion. It hangs like a gigantic black cloud over the people of New South Wales. As the member for Lachlan, with his classical education, has said, it is like the sword of Damocles, which hung by a thread according to the Greek myth. I will not speak about Greek myths: I will talk about important matters such as the statutory declaration.
The CHAIRMAN (Mr Mills): I call the honourable member for Gosford to order. He will resume his seat.
Question—That the words stand—put.
The Committee divided.
Ayes, 50
Ms Allan
Mr Amery
Ms Andrews
Mr Bartlett
Mr Black
Mr Brown
Ms Burney
Miss Burton
Mr Campbell
Mr Collier
Mr Corrigan
Mr Crittenden
Ms D'Amore
Mr Debus
Mr Gaudry
Mr Gibson
Mr Greene | Ms Hay
Mr Hickey
Mr Hunter
Mr Iemma
Ms Judge
Ms Keneally
Mr Knowles
Mr Lynch
Mr McBride
Mr McLeay
Ms Meagher
Ms Megarrity
Mr Morris
Mr Newell
Ms Nori
Mr Orkopoulos
Mrs Paluzzano | Mr Pearce
Mrs Perry
Mr Price
Dr Refshauge
Ms Saliba
Mr Sartor
Mr Scully
Mr Shearan
Mr Stewart
Mr Tripodi
Mr Watkins
Mr West
Mr Whan
Mr Yeadon
Tellers,
Mr Ashton
Mr Martin |
Noes, 34
Mr Aplin
Mr Armstrong
Mr Barr
Ms Berejiklian
Mr Cansdell
Mr Constance
Mr Debnam
Mr Draper
Mr Fraser
Mrs Hancock
Mr Hartcher
Mr Hazzard | Ms Hodgkinson
Mrs Hopwood
Mr Humpherson
Mr Kerr
Mr McGrane
Mr Merton
Mr Oakeshott
Mr O'Farrell
Mr Page
Mr Piccoli
Mr Pringle
Mr Richardson | Mr Roberts
Ms Seaton
Mr Slack-Smith
Mr Souris
Mr Stoner
Mr Tink
Mr Torbay
Mr J. H. Turner
Tellers,
Mr George
Mr Maguire |
Pair
Question resolved in the affirmative.
Amendment negatived.
Schedule 1 agreed to.
Schedules 2 and 3 agreed to.
Bill reported from Committee without amendment and passed through remaining stages.
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