
Issue No 91		06 April 2001

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Interview

Costa on Compo

Interview with Peter Lewis

Labor Council's secretary gives his take on the Big Stink over Della's workers compensation package.

Are you surprised that it has come to this?

Well our preference would have been for consultation before the bill was introduced, but I am not surprised at the concern, the feeling, the outrage that has been expressed by the unions. This is a cornerstone issue for the Australian union movement and any Labor government ought to understand that unions will quite vigorously defend workers' entitlements in relation to workers' compensation.

What do you think the government's game plan was?

I think that the government handled it very, very badly. It should have consulted broadly in a formal process to ensure that their concerns in regard to dispute resolution were the focal points of the passage. What we have got here is the government saying that it's focussing on simplifying dispute resolution, but everybody is concerned about the benefits structure within the proposed package.

On the actual merits of the argument, you have been on the WorkCover Board for a long period of time, what is wrong with the scheme at the moment?

The reason we have got a deficit is because our premiums have not been increased over the years to ensure that the premium rate and the underlying risk rate were balanced. So there is no doubt that the reason there's a deficit in the scheme is because employers haven't paid the cost of workers' compensation - the true cost of workers' compensation in this State. That is the first thing that needs to be established.

The reason there has been an underestimation of premium clearly leads into the secondary issues about the role of common law, the role of statutory benefits, and most importantly dispute resolution and the role the insurers play in that.

My personal view is that the way this ought to be resolved is by a sensible package that recognises there has to be some form of deficit reduction levy placed on this scheme. Our actuaries are telling us that if you had a very small deficit reduction levy applied over a long period of time you would get the scheme back into balance.

At the same time I think the Minister is right. We need to look at dispute resolution. We need to find a streamlined process. But the current one which is based on a bureaucratic administrative system is not going to be acceptable to the unions. There needs to be some mechanism for appeal because they all feel that they have been treated unfairly, and in addition there needs to be a focus on the fundamental issues - and they are workplace safety and rehabilitation.

If you look at this policy it is very, very one sided. It deals with one set of issues. It doesn't deal with the issues that unions believe are the most important. That is workplace safety, rehabilitation and compliance.

I am really surprised that this policy has nothing in it in relation to compliance. It has been estimated in the building industry for example, that around 25% of employers are failing to pay their workers' compensation premiums, or are operating in a shonky way. Having premiums that don't meet the full quantity of workers that they have got employed.

So all of those issues should be brought into the package - and we have a balanced package - this package appears to be very one sided.

The government is obviously spooked by the large number in the actuarial deficit. Is an actuarial deficit something that you should be concerned about?

I think you have to be concerned about an actuarial deficit. But the key thing with the WorkCover deficit is that it has been relatively stable - stabilising. If it is the underlying deficit minus two one-off factors of the GST and change in investment performance plus the under collection of premiums, the actual deficit itself has stabilised.

So I think the government is wrong to try and beat up a climate of crisis in the scheme. The deficit itself, as we all know, is a long term deficit - this is an actuarial deficit based over a long period of time - and it is clear that the scheme has enough cash flow to fund its daily requirements in terms of meeting costs and workers' entitlements.

There is no crisis in the sense that necessitates a rushed process. There is an opportunity to sit down and sensibly discuss these issues through. Now, you can get an actuary to say anything. They tamper around with the two or three variables that are critical to assessing the deficit. I can produce an actuary that says that the deficit is lower. I'm sure others can produce an actuary that says the deficit is even higher. But that is not the real issue.

The real issue is that the scheme has cash in it. It can fund its ongoing liabilities. There is no need to rush in with a package that is very one-sided.

Are their issues where compromise could be made?

The onus is on the Minister to establish that there are no benefit reductions. Certainly our analysis is that there are quite clear examples where benefits are reduced to a large amount of potential beneficiaries. That is the problem. He is claiming that the system that he has introduced might lead to a reduction in benefits. He hasn't established that.

That has been the third phase of this campaign. I am hopeful that when we get to a point where we can establish clearly that the guidelines are an inappropriate way to measure medical disability and as a consequence of that we can modify those and get to a situation where workers' benefits are not jeopardised or diminished by the process.

Let's make that clear - there is no compromise in that area. Any package that goes before the parliament that reduces workers' benefits will be opposed by the Labor Council.

Where there can be room to compromise I think is on dispute resolution and the issue to do with compliance and the issues to do with rehabilitation. I think we need to focus in on those as soon as possible, but the first hurdle is to get over the threshold issue of benefit reduction.

If the government doesn't withdraw the legislation in the next week before Easter, what can they expect after the Easter break?

They are not going to withdraw the legislation before Easter. They've told us that. They have got four and a half weeks. The more appropriate, I suppose, phrasing of that question, is if the government doesn't compromise or display some flexibility in the period leading up to Easter, there is likely to be an intensification of industrial action after Easter.

That is unfortunate. We don't want that but unions feel very passionate about this issue and they are having workplace meetings discussing the issue, and I can clearly see a section of our affiliated base taking industrial action after the Easter break if this issue is not resolved.

What sort of action do you think that will be?

I think there will be a variety of action, depending on the sector, and I don't want to canvass the details of that - that is up to the Labor Council's campaign committee to work through that, but clearly the passion is there, the desire to defend benefits is there and the industrial muscle is there as well.

Finally, if you were a betting person, what do you think are the odds of the Della Bosca package getting through Parliament as it currently is?

I think the package will not get through as it currently is. I think there needs to be, as I said, compromise, flexibility and negotiation and some additional elements added to the package. Particularly elements dealing with compliance, rehabilitation and workplace safety.

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  Issue 91 contents

Interview: Costa on Compo
Labor Council’s secretary gives his take on the Big Stink over Della’s workers compensation package.

Politics: Della's List
All Labor members of Parliament were this week asked to indicate whether they would support injured workers. More than half said 'yes'. Here they are.

Unions: Picketing Joy
Rowan Cahill chronicled the definitive dispute of 2000 for Workers Online. He looks back on the battle and the lessons to be drawn from the workers at Joy.

History: Vale Tony Mulvihill
The environment, migrant workers and the hairy nosed wombat have reason to be thankful for the active citizenship of Tony Mulvihill.

Economics: Stopping the Rot
A national campaign is underway to persuade politicians from both the major parties that they need to be addressing the issue of poverty within Australia.

International: East Timor – Beyond the Headlines
It’s now more than 18 months since the violence and bloodshed following the popular consultation on the future of East Timor was front page news in Australia.

Technology: Online Breathing Space
The global collapse of faith in new technology has given journalists a chance to prepare themselves for the real revolution, writes David Higgins

Satire: Howard Cuts Beer Price to Get Voters Drunk
Prime Minister John Howard has agreed to cut the excise on beer, in the hope cheaper drinks will help get the country drunk enough to vote for him.

Review: The Battle for 96.9Fm is Over
What would you get if you crossed 2DAY FM, 2MMM, JJJ and MIX 106.5 FM? A fairly commercial radio station that wouldn’t know the difference between throwing up, stuffing up, growing up or breaking up.

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» Employment, Environment Vital to US-Australia Trade Deal

» Extra $1.37 Billion Needed for Unis

» Campaigning Workshop Establishes Local Campaign Initiative

» Activist Notebook