State Insurance and Care Legislation Amendment Bill 2022 an all or nothing proposition for families

11 May 2022

Ms JODIE HARRISON (Charlestown) (11:49): I speak on the State Insurance and Care Legislation Amendment Bill. I note from the outset that the bill comes in response to a recommendation of the independent review undertaken by Robert McDougall, QC, into Insurance and Care NSW, or icare, and the State Insurance and Care Governance Act 2015, which called for this Parliament to give consideration to expanding the powers of commutation and settlement of lump sum death benefits, subject to the approval of the Personal Injury Commission.

The bill also comes in response to recommendation 9 of the Standing Committee on Law and Justice 2020 review, which called on the State Insurance Regulatory Authority [SIRA] to investigate other options for injured workers and insurers to reach settlements and exit the scheme.

Though these recommendations address different issues, they both take into consideration stakeholder concerns about the limited ways that claimants and insurers can reach settlements. The bill addresses two main areas of concern.

The first is a provision for compromise between claimants and insurers during the settlement of lump sum death benefits. I note there is broad agreement amongst stakeholders that the changes proposed in the bill are beneficial, but I further note that there are some reasonable reservations regarding the way the Government has gone about implementing those changes in legislation.

The second area of concern addressed by the bill is the matter of commutations. A commutation is an agreement between a worker and insurer to forgo future compensation or medical expenses and instead issue a lump sum to the claimant. This is a much more hotly contested provision, with a range of stakeholders warning that any change to this complex area of the law may have severe unintended consequences.

True to form for this Government, it is proposing sweeping policy changes—which may have an extraordinary impact on businesses, insurers, the workers compensation system as a whole and, most importantly, injured workers and their families—without adequate explanation of its plans and goals.

Before I discuss my concerns about the way the bill proposes to tackle commutations, I will highlight some issues surrounding lump sum death benefit payouts which the bill seeks to correct.

Every workplace death is an unimaginable tragedy. Every single worker, no matter what they do for work, should be able to expect that they will come home safe and sound at the end of the day. On 28 April we observed the International Day of Mourning for those lost to work‑related incidents or illnesses. We should never stop our efforts to protect workers and improve workplace safety. But when the unimaginable does happen—which, unfortunately, is far too often—we should do everything we can to ease the burden on those who are left behind. The bill goes some way towards doing that.

As it stands, the legislation provides an all-or-nothing proposition for families and the insurer over the payment of death benefits where liability is disputed: Either the full amount is paid out or nothing at all is paid, with no room for compromise. I cannot begin to imagine the stress that this high‑stakes proposition places on families and beneficiaries who are already struggling with the loss of a loved one. These sorts of disputes are incredibly complex, always gruelling, and absolutely horrible for people already experiencing grief. As Robert McDougall said in his review:

There is no principled reason why they should not be able to compromise claims, so long as there is appropriate oversight of the compromise.

For the sake of those left behind when a worker is killed, I welcome what I, my colleagues and many stakeholders view as long‑overdue reform. But the question has to be asked: With so much support and such obvious benefits, why is the Government approaching this reform in such a piecemeal way? I note that in 2021 the Government introduced the Motor Accidents and Workers Compensation Legislation Amendment Bill, which would amend the Workers Compensation Act to create an additional compensation entitlement to ensure that the lump sum paid out to a deceased's dependent child would not be eroded over time by fees charged by the NSW Trustee and Guardian.

It is a good idea—it is a way to ensure that a grieving child does not lose their payout to administration fees—but that bill has still not been moved. Why not? Why has it not been packaged with the bill we are debating now? What are the Government's future plans in this regard and why is it being so cagey about them?

That brings me back to my concerns about the elements of the bill relating to commutations. There are benefits to allowing commutations in certain cases. As McDougall wrote:

There are … significant psychosocial benefits in allowing workers and their families to settle claims, avoid the ongoing stress and difficulty that pursuit of a claim can create, and get on with their lives.

But as always with this Government, the devil is in the detail. As the New South Wales Bar Association has pointed out, "The form of the legislation introduced into Parliament provides no indication of the circumstances in which commutations are now to be permitted." Will those commutations be offered on the basis of industry, injury type, the degree of entitlement, the amount of entitlement, gender, age or income? The New South Wales Bar Association surmises that the legislation has been inadequately considered—that it "contains regulatory pathways which could permit the almost complete subversion of the underlying purpose of the scheme".

Unfortunately, coming from the Government of Dominic Perrottet, I would not be surprised if a complete subversion of the workers compensation scheme was the ultimate goal. If we ignore history, we are doomed to learn nothing from it, so let's look at the Premier's history. This is the Premier who wanted icare to be the jewel in his political crown—icare, where serious financial mismanagement at the highest levels led to serious and continual losses even before COVID hit; icare, where executives received bonuses despite those losses and were praised by the Premier for them; icare, which lost its chair and co‑chair to resignation; icare, where there have been dodgy dealings galore, with massive contracts handed out to businesses linked to senior managers, including an $11 million marketing contract given to a company owned by a manager, and questionable tender practices that saw a $140 million contract handed out after a one‑week tender process.

Liberal Party donors enjoyed extra‑cosy relationships with icare as $6 million in contracts were awarded to Korn Ferry, and an $18 million contract went to IVE Group without tender. Staffing arrangements at icare were questionable: The CEO's wife was given a job there, and political staffers on the icare payroll were seconded to the Treasurer's office. But the most egregious of icare's many sins is the underpayment of tens of thousands of injured workers to the tune of tens of millions of dollars.

Ms Kate Washington: Shame!

Ms JODIE HARRISON: It is a shame. This is the largest case of wage theft by an Australian government in the history of our country. It is a black mark for this Premier, this Government and our State. Make no mistake, the responsibility for all of this lies with the man who has overseen icare since its inception—Dominic Perrottet.

This is the Premier who, as finance Minister, brought icare into the world. This is the Premier who, as Treasurer, oversaw high levels of basic incompetence and dodgy dealings at the highest levels and at the very heart of his brainchild, and whose department abandoned an investigation into icare in September 2019, before the problems that I have spoken about were brought to the public's attention. And now this Coalition Government is putting forward legislation that has not been properly considered and leaves far too much open to interpretation.

Given the Premier's history of ignoring mismanagement in the State's workers compensation system, is it really so outrageous to think that he might be willing to overlook the problems caused by this legislation? I do not think so.

After all, the Premier leads a Government that has proven, over and over again, how little it cares for workers. It is a Government that takes every opportunity to sledge the frontline workers who have kept us going through the pandemic. It is a Government that has offered these workers little more than thanks for their hard work and that is overseeing a staffing crisis in our schools, our hospitals and our ambulance service. There is a case to be made for commutations, but I do not trust this Government and this Premier to handle it without the appropriate care.

Over and again the Government has proven that it cannot be trusted with workers compensation. Having said that, this legislation goes some way to fixing what is often a horrendous system for those who are injured but it needs amending to overcome the issues that I and others in this place have raised. I support the amendments proposed by the shadow Minister and member for Canterbury who has worked hard on this bill.