WorkCover SA buggered and to be decommissioned


WorkCoverSA, a multi-billion dollar State Government corporation, is a basket case and beyond redemption, a senior Minister has admitted. Attorney-General and Industrial Relations Minister John Rau confirmed  that WorkCover is “buggered” and would be decommissioned.

WorkCover SA to be decommissioned

‘Beyond redemption’: WorkCover to be decommissioned

WorkCoverSA, a multi-billion dollar State Government corporation, is a basket case and beyond redemption, a senior Minister has admitted.

Attorney-General and Industrial Relations Minister John Rau confirmed today that WorkCover would be decommissioned.
“It’s buggered,” Rau told InDaily.

“We’ll decommission the scheme and start again.

“It’s been amended, patched over and fiddled with for years and in the process has become so disliked, the only thing to do is to rub it out and start again.”

WorkCover administers workers’ compensation for more than 430,000 employees of almost 50,000 businesses.

Last year it managed 16,774 claims, collected $667 million in employer levies and paid out more than $809 million in cliams.

The gap between income and expenditure is mostly covered by a massive $2.25 billion investment fund; its holdings in shares, property and cash delivered investment returns of $253 million.

Even with the investment income, WorkCover’s projected gap between estimated claims and estimated income leaves it with an unfunded liability of $1.366 billion.

Rau, who took over responsibility for WorkCover early this year, has been doing an internal review of the organisation, and doesn’t like what he sees.

He expects to name seven new members of its board by the end of this month, along with a new chairman.

Current chairman, Philip Bentley, retires on 31 October.

“The scheme has been poorly administered,” Rau said.

“People have been left sitting on the scheme; there’s been a glaring failure to address early intervention and early action to return to work.”

Rau, however, had little detail of WorkCover’s replacement.

“I hope to have a basic set of policy principles in place by the end of December; certainly in time for the March State election.”

For the 300 staff  at WorkCover’s head office in King William Street, the future is clouded after Rau’s stinging attack on the organisation.

“The culture at WorkCover, the structure within the corporation; it’s just not working.”

There have been major changes in recent months with the new appointments at senior executive level since its latest chief executive officer Greg McCarthy took the job when his predecessor Rob Thompson left unexpectedly last year.

As recently as last week, McCarthy had an optimistic view of initiatives he hoped would turn around the scheme’s performance.

“2013-14 will see us roll out these initiatives,” McCarthy said in the Corporation’s annual report, released last Wednesday.

“For example we will shortly roll out our early intervention model that will, with the claims agents, see workplace consultants visiting the workplaces of small business to assist workers and employers in the return to work process.

“I look forward to continuing to work with the entire team at WorkCoverSA, the claims agents and Scheme stakeholders to ensure we deliver improved return to work outcomes for all South Australians which, in-turn, should see a further improvement in our Scheme’s financial performance.”

WorkCover’s continuing increase in future debt was meant to be fixed by extensive reforms in April 2008, that came into force in July that year.

When the new laws were in place the unfunded liability had reached $984 million.

The reforms sparked angry protests from unions, not convinced they would do anything other than marginalise injured workers.

Employers were hoping improved scheme performance would deliver lower levies.

The liability went down slightly for two years to $982 million in 2009-10 and $952 million in 2010-11.

In 2011-12 it took another major leap as WorkCover Corporation posted a $1.389 billion in 2011-12.

History shows that despite a succession of further changes to claims management, legal services, redemptions and executive staffing, WorkCover’s promised improvements have failed to eventuate.

The model of a State-owned Corporation administering workers compensation was the social democracy dream of the Bannon Labor Government’s industrial relations Minister Jack Wright.

Responsibility for compensation was taken from the private sector insurance companies and a structure set up to ensure  all employers carried the responsibility of paying premiums.

It has now evolved into a Corporation where responsibility for the management of worker’s claim is outsourced to private sector agents Employers Mutual SA and Gallagher Bassett.

Its legal advice and representation services are outsourced to Adelaide law firms Minter Ellison and Sparke Helmore.

Rehabilitation services are provided by a raft of suppliers.

Rau now accepts that the SA model is the “worst” of Australia’s 11 workers’ compensation systems.

Right now, he doesn’t have the answer, but promises it won’t be a return to the pre-1986 model.

State Liberal Leader Steven Marshall agreed with the Rau assessment, but scoffed at the proposed timing for a replacement.

“Yes, I agree; it’s buggered,” Marshall told InDaily.

“But it’s a bit rich for the Minister to say ‘we’ve failed for 12 years but I’m not bringing a new idea to parliament’.

“He’s not even game to have it tested, rather he wants to say ‘trust me’.

“History suggests that’s not a good idea.”



16 Responses to “WorkCover SA buggered and to be decommissioned”

  1. More of Changes, having experienced the ‘reforms’ of Barry O Farrell in NSW, I am talking about what has happened in this state and what I have stated is correct. It is unfortunate that you have such a corrupt union movement in SA, but judging by what is happening in NSW and Queensland now, the alternative for your state is not that and believe me you would not want it. In my own personal case, my union helped through all of the nastiness of the system and I would be dead in the water without them. Unions like governments are a reflection of the people who are in them or voted for them. I would like to see what benefits the union movement gains from destroying WC as they would not gain any monetary advantage doing that. You do not seem to be worried about the main beneficiaries of WC changes anywhere in Australia and that is the Insurance industry, surely they are not benevolent and blameless in SA, because in NSW, they and the government conspired together to destroy our WC, despite the protests of the unions.

  2. Privatised Workers Comp is in fact an across the board wages cut which is regressive and hurts lower paid workers the most, requiring workers to pay for their own insurance negates the obligation of employers to provide safe workplaces. And if anyone thinks competition between insurance providers will result in lower prices, think again, just have a look at the prices of Green Slips in NSW for an example. Companies that have self insurance like Woolies and Coles have dreadful conditions placed upon injured workers, this is not an option we should even consider. One thing that is never mentioned in any of this is the fact that we can use the courts apart from Workcover or Tribunals despite their statements that we can’t. Everyone has a right to have their case heard in a court, that is the basis of English common law and is in our constitution, the biggest problem with this is the reluctance of the legal profession to do this. Looking back on my situation, I wish I had taken that option so that the judge could have heard all of the harassment and bullying I was subjected to and given me a judgement that probably would have been fairer (but like all of us, I did not know that was an option at the time) The legal system is separate to government. If you have a 15% whole body impairment it is possible to sue your employer for strict negligence and not use Workcover at all. Liberal and Labor are both shades of grey, however most of the time Liberal is a darker shade because of their ideology – see NSW. As far as the unions are concerned, they could do a lot more, but as there have been concentrated efforts to reduce union membership and as they are also involved in other issues (like in NSW where the government is trying to make it illegal for them to contribute to any political action – hence lack of action on WC) and it will remain a point of extreme disappointment for most injured workers until unions can get stronger. I think the only way we can think out of the box on this is to identify legal avenues which they have not thought of and take action in this manner as well as bombarding politicians with complaints.

    • Unions SA is involved in it up to their neck. The Union boys are the ones who installed the current premier after mutilating both the existing treasurer and premier we elected. The current premier was the same bloke who as a WC lawyer, helped the govt really screw over one high profile injured worker.

      Did he get his reward for going along with destroying that mans life? Or did he get his reward for covering up child sex attacks in his schools when he was Ed Minister?

      There’s your UNION BACKED guy!

      As for unions and no shows in the workplace. Legendary in SA. They only play at the big end of town. The govt and politics. The only thing they bother with when it comes to workers and the little guy, is collecting their money, which it seems is used for political purposes and not for helping the people who paid their dues.

      They only appear to concern themselves with things they can get in the media, and which are used for political leverage. Please see note above on installing one of their boys as Premier. Its all about them, not us.

      If I was a crooked workplace, all I’d have to do is make a donation to the cause, and it all goes away.

      Crooks dealing with crooks. Thats all it is.

      More of the Changes November 18, 2013 at 1:34 pm
  3. Have a look at this link which explains some other aspects of the changes.

    Already, any deemed serious injuries under workcover have been moved off the claims agents and on to workcover corp. Non-serious injuries (I think less than 40% whole of person) are going to get nothing but return to work under the insurer agencies.

    Now have a look at this. The SA Labor govt has now done the same thing to motor accidents. Comp will only apply to serious accidents. Same thing as workcover.

    All this is leading to only someone who is now a disabled person (one who has had their life and ability to live it destroyed) being able to seek some kind of help from the govt. Highly likely under the new NDIS system, which by the way is also focussed on less help, and more restrictions to treatment and a strong return to work focus. Even for the now totally disabled.

    For those who champion the Labor party and the Unions and believe the rhetoric, these things are the brain childs of the Labor party, and with the blessings of the Unions who said and did nothing to stop this.

    It seems the govts wanted to take the money for these insurances, but use their muscle to get out of paying for anything when it comes to claims.

    As far as injured workers are concerned, we are now caught in the crossfire of a system they are getting rid of (already legislated and including such things as no medical expenses after 12 months off income support) and a new system of pay for your own insurance or get lost.

    Its too late for us. We are already injured, already disabled, and didnt have our own insurance because we were covered under the govt insurance scheme. So what happens to us now? Throw us out on the street?

    This is wrong on so many levels.

    And now this.

    If you want to appeal a decision by the SA Labor govt or one of its agencies, you have to go to a Govt Tribunal run by and for the govt. You can no longer get it before a judge in a court to get it looked at fairly and independently.

    Have they got it covered or what???


    And this.

    ““Perhaps it is time to think outside the square, encourage self-insurance and diminish the role of WorkCover and allow the introduction of private insurers…The free market will enable employers to source insurance where their needs are best met by the premium quoted.”

    So we get only a govt run and dictated tribunal (no courts allowed) that will end up killing people and so what, to drive people off the system and into “privately insured”.

    So what happens to us? Those of us who had our lives destroyed already through an accident (or negligence we cant sue over) and are left disabled, and unable to live even a slightly normal life, but it happened under the old system?

    More of the Changes November 17, 2013 at 2:13 pm
  4. The Opposition says union heavyweight Peter Malinauskas should not have been reappointed to a new WorkCover board.

    Click on link to read whole article:

    HuntingWorkcover November 1, 2013 at 7:25 pm
  5. – South Australian employers say they have lost powers of vetting staff under proposed Bill

    – Local business groups fear a new State Government Bill – which they were not consulted about – will drive up costs and slow return to work rates of injured workers.

    Click on link to read whole article:

    HuntingWorkcover November 1, 2013 at 7:03 pm
  6. Injured workers ‘driven to suicide’ under compensation scheme, says Independent MP.

    Here is a link to the whole article:

    HuntingWorkcover October 30, 2013 at 3:50 pm
  7. Some more information:

    New Law Society president Morry Bailes … agenda for change.

    -Mr Bailes said reforms also were needed to address the WorkCover workers’ compensation scheme – described as “buggered” last week by Attorney-General John Rau – and injured motorists through Compulsory Third Party insurance rules.

    -“We have an enormous unfunded liability and on the other hand workers are worse off, so the idea of ripping it up and starting again has to be considered,” he said.

    -“New personal injury reforms have also slashed benefits to people injured in a motor accident, while the WorkCover scheme is failing many injured workers and accumulating a staggering unfunded liability.”

    Here is a link to the whole article:

    HuntingWorkcover October 30, 2013 at 12:35 pm
  8. From Adelaide Independent news 21/10/13- Quote”” Attorney General and Industrial relations minister John Rau confirmed today, that Workcover SA would be decommissioned It’s “”Buggered””, Rau told daily.Its been amended, patched up, fiddled with for years And in the process has been so disliked, the only thing to do is rub it off and start again.”” Unquote
    At least this gentleman has the courage to admit a systemic failure, and wants to correct it.
    Only state and Federal governments could address the flaws in the founding Act 1986. Which has evolved into a big hole in government expenditure. And only they could impose heavy penalties for corruption and fraud either by employers, employees, the regulator and / or with conniving with there many agents.
    Those involved with fraud and corruption both the giver and receiver should have heavy penalties and long jail sentences. That could stop the sin, stupidity, and madness of the system.

    • I think you mind find that the gentleman you stated, is in fact using all this as an exuse to dismantle the system even more, in readiness for the NDIS, or a version of the NDIS which is planned to ultimately replace workers comp nationwide. The trouble is, the NDIS has been modelled on the exact failed, rort riddled, bullying, reduced payment for providers system, that currently exists in SA. The SA model that they say is “buggered”.

      Its not a fix. Its a swap. Its been shown to terrify genuine people off the system into the suicide statistics, and be a happy haven for rorters. Most of the rorters being the substandard providers that agree to provide less and less servicesin return for a few bucks. And who among them would agree to that if they werent so bad and so dodgy that they could attract normal clients and not go broke? None of them. So the only ones that will be approved (NDIS provision the same as WC) are the ones who will work for peanuts, screw over injured people and do as they are told.

      Don’t believe everything you read in the media. Read the legislation and what is being passed through parliament.

  9. No doubt there will be savings made to the broke scheme… will be injured workers that pay.

  10. good to see its all about money the bureaucrats fuck it up srcap it and start again and love the trust me

  11. Well for a start, it is not the worst WC scheme in Australia, NSW has that honour. Red Flags go off when I see so many references to money and liability, as well as ‘early intervention and early return to work’. This is all Orwellian double speak for ‘ we want to get rid of any workers compensation for injured workers’ and we will be using the NSW system as a model for this. OK, you want hardball, try this, no workers compensation system equals all injured workers should clog up the legal system with negligence claims and sue for millions. That is what we had before WC and employers hated it.

  12. Im sure the insurance companies will hurt not profiting off of injured workers Rob. The reality cheque – that is why the system is down hill in the first place. The insurance companies don’t work with employees. Only the employers. They are staffed with rehabilitation workers who only know how to push people back to work too soon. The insurance companies don’t have the extensively trained staff in rehabilitation of injuries. There is no quality control on the side of the injured worker. The no fault no blame system is now firmly cemented. Yet WorkCover is fixed on blame. Blaming the injured worker by those who created the system in the first place. It’s failed only because now those in control want to bring a new system to completely. Why not? The legislation now is changing on bullying. People are becoming more aware of the pit called Workcover. A disaster or damage control? Who knows? One thing is sure all injured workers know we will be shoved to the bottom of the pile. Ignored and hurt much more. While the corporation decides how to invest its Money more profitably.

  13. They will have to get some new shell of a system together as soon as possible or insurance comapnies won’t be able to profit off of injured people that would be a real knightmare for them.