Wednesday, 15 November 2023

Bills

Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023

Second reading

Debate resumed.

Sam HIBBINS (Prahran) (14:54): As I was saying, I was just really concerned by some of the language used by government members in their contributions, which seemingly indicated ‘Oh, well, if you’re thrown off the scheme at the end of 130 weeks or if you’re denied access to the scheme for certain mental injuries, then you’re back to work. Everything is okay’. Well, that is not the case, this sort of suggestion that people who are claiming WorkCover are somehow illegitimate or that if you are part of that cohort that has significant injuries that do not allow you to return to work for some time, somehow with a bit of tough love, off the scheme, there you go, you will be right back to work. No, I am disappointed by that sort of language.

The reality is that the WorkCover system can work better and be fairer for people who need it, and we can have a system that does not actually make things harder for them in the first place. As I said, this bill does not make things easier for them. It makes things harder. This is coming after the Royal Commission into Victoria’s Mental Health System and findings and recommendations from that royal commission specifically going to creating mentally healthy workplaces and supporting people experiencing mental illness at work. This bill and the changes in this bill to WorkCover are completely inconsistent with those recommendations from the royal commission and really inconsistent with the approach that we have taken to mental illness and mental injury for some years now in terms of the destigmatisation of mental illness. This bill restigmatises people with mental illness and punishes people who are experiencing mental illness and mental injury at work.

To the details of the bill, it makes a number of amendments to the Workplace Injury Rehabilitation and Compensation Act 2013, the Accident Compensation Act 1985 and the Occupational Health and Safety Act 2004. It has much stricter eligibility requirements for mental health claims, with the definition of mental injury narrowed and specifically excluding stress and burnout, and it proposes the introduction of a whole-person impairment test of more than 20 per cent for workers who are on the scheme after 130 weeks. In addition to that, disputes over eligibility may no longer go to arbitration and must go to the courts instead.

Mental health injuries currently account for 16 per cent of all WorkCover claims. As I said, we have come a long way in destigmatising mental illness, and it has taken a lot of hard work to get to that point. But these new eligibility requirements being proposed are just too narrow. They are going to preclude a significant number of legitimate mental health injury claims. As I said, what is going to happen for these workers under these changes? Is their mental injury just going to go away? It is going to have a really harsh effect on them, with far-reaching effects. They are just going to be pushed now to our already overstretched public health system. It is going to push them onto the hospital system and emergency departments and will actually increase demand on our mental health system, because people will have no other support.

Claims caused by stress and burnout will be ineligible under the changes, with new criteria stipulating that mental health injuries be caused by a single traumatic event, but this ignores the fact that often workers who suffer mental injury due to vicarious trauma, ongoing exposure, distressing events or unreasonable workload will most likely have their claims rejected. Employees who are working excessive overtime because they cannot argue against it or do not want to risk their employment are just going to have to have to suck it up, really, according to this government. As I said, it is this ongoing exposure that will lead to mental health injury, rather than just a single event. This is a workforce, particularly within our public sector, that is already stretched, already stressed and already close to burnout. We have seen that the number of mental injury claims is significant for government services, for our schools and for our health services. It is the government who should be going in and improving their workplaces there, not getting rid of eligibility for workers and denying them access to the scheme.

In relation to the 13-week provisional payments there are a number of issues with this proposal. Number one, they only cover medical expenses, so you will not be entitled to workers compensation in the first 13 weeks. The reality is it can take weeks or months to access supports such as psychologists and medical treatment. The payment is only for a scheduled fee, so the worker needs to pay up-front fees and be reimbursed down the track. You have got medication for mental ill health issues that take weeks or months to actually start working or often require trial and error. It is a situation where people are going to be pushed to seeking alternative diagnoses, and it creates potential for diagnosis creep.

The whole-person impairment test of more than 20 per cent is a significant concern. Under the current scheme workers are entitled to receive ongoing benefits if they can establish they have no work capacity on an ongoing basis, but under these changes, in order to get payments after 130 weeks, they are going to need to have an impairment of more than 20 per cent in addition to having no capacity on an ongoing basis. So you are going to have people who cannot work due to an injury at work being denied access to WorkCover, being kicked off the scheme. For example, a disc herniation under the guide is assessed as 10 per cent. This is not a suitable benchmark to be given for the different types of jobs and injuries that people have. It is made purely with finances in mind so that they can kick a whole bunch of people off the scheme and save the money.

I also note that the AMA guides to determine the whole-person impairment are problematic in that they measure the severity of impairment rather than disability. The whole-person impairment accords higher priority to body regions that are deemed more important to functionality. They were never intended to be used for compensation impairment. They are complex, they are difficult to use, they can lead to inconsistent and inaccurate evaluations of impairment and they do not consider – and this is really important – the unique circumstances of each individual case, such as the person’s occupation, their age and their overall health. I mean, just look at the difference between certain injuries – a physical injury like what you might have as a manual labourer over the age of 50 compared to an office worker in their 20s. It is a one-size-fits-all approach that is just unworkable, and it is going to result in injured workers who are unable to work being unable to receive a payment. Furthermore, injured workers can only use one of mental or physical injury, even if they are both caused by the same incident.

This is just an attempt to claw back some money, and it is injured workers who are going to be paying for it. We all agree the scheme needs reform, but unfortunately the scheme has been for far too long weighted in the favour of agents who want to minimise payment and maximise profits. We have had a number of investigations, inquiries and reports into WorkCover from the Ombudsman. We had the Rozen review. There have obviously been already a number of reviews into WorkCover and actions that have needed to be taken, but they have not been taken by this government. They have not done the serious and the real reform that is required. We have heard from injured workers who have told how they have struggled to navigate the system when they have sustained an injury and are suffering from impairment, often at great distress, waiting for surgery or in pain or on strong medication. The process they have to go through is overwhelming and stressful, so we need to have a system that does not make things worse for people, it actually makes things better for them. Limiting eligibility, stigmatising mental health and penalising workers in making up for a financial shortfall is not the solution.

Quite rightly, the unions, advocates, mental health experts and injured workers are not buying in any way, shape or form the government’s spin on this, and quite rightly they have told us they are advocating to reject this bill. The government say that they have consulted widely. Well, if they had listened, they would not be bringing forward this bill, because they have been told that they should not be bringing forward this bill and that this bill should be opposed. This government is acting like a heartless insurance company instead of a good government that helps injured people in the workplace and actually prevents injury in the first place.

The Greens are opposing this bill. I urge all other parties to oppose it. We will consider the opposition’s reasoned amendment. Whilst well meaning, I think it is unlikely we will be seeing a freeze in premiums for 24 months regardless of whether this bill fails or passes, as stated in the reasoned amendment. But overall, as I said, this bill is anti-worker. It is not a modernisation in any sense. This takes WorkCover backwards, and it has got injured workers paying the price for the government’s own mismanagement of the scheme. I urge all members to oppose this bill.

Nina TAYLOR (Albert Park) (15:05): I will seek to acquit various matters that have been raised in the chamber with regard to the proposed reforms to do with WorkCover. I would like to emphasise that it is absolutely a priority that this scheme be sustainable into the future so it can truly benefit Victorians who are going to need to be using these support mechanisms in the future. I do think that there has been a little bit of poetic licence with the flavour and the way it has been described by, perhaps, the opposition and the Greens on different angles, but I will speak to some specific elements.

On the one hand we know that with the coalition’s war on WorkCover, that continued when they were last in government. They ripped $641 million from the scheme in four years, so I find it a little bit rich now that they are suggesting on the one hand do not increase premiums – so how are they proposing that this scheme be sustainable? They cannot have it both ways. They have a pretty ordinary record in this zone, so their credibility with regard to the way they have described the various elements of these proposed reforms is pretty thin. They are on pretty thin ice there, so I do not give credence to some of the aspersions that were truly cast in the chamber. I think they were quite unfair, to say the least. If we look at history, we can see that they really are not looking out for the – they cannot be taken seriously to be suggesting the sustainability of this scheme if they do not want us to, at a minimum, bring in line the premium increase relative to other states as well. I think that just does not fly.

On the other hand, respectfully, I think with the Greens I did not hear any solutions. I also heard ‘Yep, let’s just keep rolling on and let the whole thing collapse, and then no-one benefits’. You cannot have it both ways. You want to say ‘Do some reform’ – lovely, where are your solutions? ‘No, just do things’ – okay, we will do things then. I will limit my sarcasm there, but again, when people are lobbing in the sledges you need to be a little bit careful, because obviously we take a lot of pride when it comes to looking out for the mental health of Victorians. Hence we certainly have implemented as a result of the Royal Commission into Victoria’s Mental Health System – of itself an acknowledgement of the significant gaps, to say the least, that we have had in mental health in our state and the significant impetus for reform, which we have heeded. I know that we have certainly already implemented many of the reforms, and there is more reform to come. I will speak more to that shortly.

Nobody can question our commitment when you think of a $6 billion investment. Now, when you say big figures, sometimes we can blur the line, but $6 billion is not exactly being stingy with regard to reform in a space that really is incredibly delicate, noting that the human mind is precious and nurturing change and healing in that space is not easy. It is complicated. I have personally witnessed people who have had protracted mental health claims and processes and also those who have been able to return to work more expediently. I will not attempt to compare the two, because each case will have its own story and each workplace has its particular circumstances, but nevertheless – and I do not want to provide detail, because I do not want to give away the individual’s details. But suffice to say that seeing a quicker return to work for a colleague that I recall, it was actually a beautiful surprise to see how well they were able to get back on track and be able to be truly productive for themselves – I am not necessarily just saying for the workplace but in terms of being able to be fulfilled and to live a rewarding life as well. I can see where the impetus is, and I think at the core of this there are two elements. One is the sustainability of the scheme into the future, but also there is ensuring that people get that support when they need it to maximise the possibility of them being able to go back to work and have a rewarding career throughout their lives. Of course there will be varying circumstances, so I am not in any way wishing to generalise about individual workers and their particular experiences – absolutely not. I think that we could all agree that putting in place mechanisms to support a safe and supported return to work has got to be a good thing, but that will be obviously relative to individual workers and their particular circumstances. I am just being really careful not to generalise, because this is obviously a very nuanced space.

There are a couple of other points that I want to raise – and I note that time is marching on – with regard to the return-to-work mechanism. I think I should put this as a baseline caveat: all workers who make a mental injury claim, including stress-related claims, will continue to have access to provisional payments for psychosocial support for 13 weeks regardless of whether the claim is ultimately accepted. That is an important early intervention. I just want to pick up on a couple of points, because I think there was a little bit of a blurring of the line. Provisional payments for mental injuries cover the costs of GPs to develop an action plan to support recovery and include payments for psychologists, counsellors, psychiatrists, cost of medication and travel to treatment and services. This includes the worker having facilitated discussions conducted by occupational rehabilitation providers to help the worker and employer to identify and address barriers to returning to work. I just want to be very clear about that, because I felt that particular element was potentially being diminished in terms of what it actually does provide.

Workers with stress and burnout claims will still be able to access these provisional payments for 13 weeks to cover medical treatment alongside enhanced psychosocial supports through Return to Work Victoria to help them return to their workplace. It is easy to draw a bit of a blunt instrument and to perhaps cut out some of the very significant elements of this reform, and I think we just have to be careful in the chamber when we are discussing this, because obviously there will be those listening and it would be awful to artificially trim, for want of a better word, for the sake of an argument, what exactly the reforms will deliver. We do want Return to Work Victoria to have a focus on mental health, particularly given mental injury claims represent around 16 per cent of all new claims and around 50 per cent of costs to the scheme. Without change, mental injury claims are projected to represent about 30 per cent of all new claims by 2030.

Just to reiterate a very important point, these reforms are not being brought forward in a vacuum. It was a Labor government that delivered the royal commission into mental health. I know I mentioned that earlier, but I think it is very easy to have simplistic and binary arguments – that sort of, you know, ‘Not looking, not looking’ – and just zone in on one element of a reform without setting a proper context for the mammoth reforms that are continuing, as they should, in this state when it comes to addressing mental health per se. We are getting on and implementing all 74 recommendations, backed by, I will reiterate, $6 billion in funding – the largest investment in Australia’s history. But in saying that, I do not wish to in any way oversimplify the complex space in which we are operating when we are talking about helping to support workers back to work, because obviously individuals and the mind and healing – I do want to allow for individual contingencies in that space as well, particularly as I am not a medical practitioner.

The other thing that I do want to say with regard to return to work, in my 20 seconds, is that research shows that the longer a person is disconnected from work, the worse their health outcomes are. Safe and suitable work is good for health as it provides a sense of purpose and economic independence. I am not generalising with those comments; I am just saying it is a core principle for reform in this space.

David SOUTHWICK (Caulfield) (15:15): I rise to make some comments on the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023. It is clear from what we have seen over a number of months now, where the rubber has hit the road, that the WorkCover scheme is broken here in Victoria. The government has had a number of years to fix it, but particularly in the past six months we have seen a number of businesses writing to us – they are on the brink, particularly a number of these small businesses writing to us – and saying their premiums have now hit such a point that they are really questioning the potential of the business being able to continue. I know from listening to a fair bit of talkback as well that that is consistent. It is not just in my electorate where we have had a number of small businesses contact us, but it seems to be throughout the state. I know a number of my colleagues have raised this point as well. Average increases of 40 per cent – I mean, this is not a 5 per cent increase, these are 40 per cent increases and some much larger than that.

When you are in a situation where the small businesses need to continue to pay the premiums – effectively insurance – because the system is broken, we need change. We respect that, and we certainly have been prepared to look at that, but what we have seen here is that the government has had effectively since 2018 to actually look at this as part of that review and to fix it. But now here we are in our second-last sitting of Parliament, and the government are trying to rush in some changes, which are really important changes to legislation that may or may not fix it and in some cases may actually make things worse.

I support the great work the member for Eildon has done on this in the consultation that she has provided from speaking to a number of organisations, including the Victorian Chamber of Commerce and Industry and the Australian Industry Group. – and I know Tim Piper has been very vocal on this – as well as the Master Builders, the South East Melbourne Manufacturers Alliance, a number of the insurers agents like Allianz, Gallagher Bassett, EML and CGU, and as the member for Eildon quite rightly pointed out, Trades Hall as well. So there are concerns right across the board when it comes to this rushed legislation to attempt to fix a broken system that has been poorly managed by what is now the Allan Labor government. I know that the member for Eildon has spoken to a number of small business associations, and the feedback has been very, very consistent: get it fixed, but let us not get into a situation where we have got to come back to the drawing board again. I certainly support the member for Eildon’s reasoned amendment, which includes that this house:

agrees to freeze premium increases for 24 months and then limit increases … in line with CPI for a further 24 months in order to provide certainty to businesses …

That is actually quite the key here, because it is the uncertainty that is causing a lot of the instability for many of those small businesses. If they close, jobs get lost, and unfortunately it is Victorians that miss out. So you have got to look at following the flow here to keep those small businesses afloat, and that certainty in terms of a freeze for 24 months to get this right is a really, really important thing for us to do.

Secondly, it asks the government to provide the:

… details of the commencement date, structure, objectives, functions and funding of Return to Work Victoria …

That is important because this particular structure, this part of the bill – there is no detail, and what we do not want to do is to set up yet another bureaucracy with more costs that could already be done by the existing bureaucracy if the systems were changed to give them more reporting functions and more direction. You just cannot keep setting up new authorities and new boards and expect things to be fixed. We know that all that does is add to costs and delay processes and everything else. We need to understand what this Return to Work Victoria is actually going to do: who is going to fund it, when is it going to start, how is it going to be paid for and how does it create more efficiencies in the system? This is what it seems this minister has done: the minister, the member for Essendon, has rushed in, had a crack at this with no detail but has just done whatever he possibly can to fix it. We saw already in question time today that this minister is not across the detail, and if you are not across the detail, Victorians end up paying the price. So it is important to get this right. We are happy to give the minister more time to get this fixed and get it right, but do not rush this in and ultimately have us all having to pay for it.

The third part of this reasoned amendment is to provide a detailed analysis and comparison of public and private sector claims for physical and mental injuries and also commit to increasing the focus on prevention strategies for each sector. We need to look at this. This is really important in terms of the style of claims. Mental health – let us divide this up. We have seen the cases surge, we have seen the cost surge, but what does this actually mean and what are the claims, public and private, in terms of the types of claims? We know the big issue around the long tail, which ultimately talks about not the cases that are sorted and solved quickly but the ones that take months and in some cases years to get sorted. That is where the cost is, that is where the complexity is, and we need to understand what we can do to better fix those.

The rest of the reasoned amendment states:

(4) makes available the reports on the modelling for the legislation; and

(5) commits to reporting annually to Parliament on the implementation and progress of the new arrangements, prior to the proposed legislative review in 2027.’

These are all very sensible, and I would hope that the government will see fit to support those. We could work together to actually get this sorted, because what we have seen is a system that continues to grow in cost, and ultimately Victorians end up paying for this. I think we need to look at what we are going to do in terms of fixing some of the costs. If you look at the time frames, in 2019–20 WorkCover’s net result was $3.3 billion in the red and the performance from insurance operations was similarly $3.5 billion in debt. Net profits have varied over the last three years, posting a $176 million loss in 2022–23. Despite ongoing cash injections from the government totalling $1.3 billion, the performance from insurance operations remains $1.8 billion in debt. So this system is broken. WorkCover is broken. Labor broke it, and now Labor expect us to trust that they are actually going to be able to fix it. We have got no confidence in that, and certainly the rushed manner in which this legislation has been brought before the house only adds further uncertainty and a lack of confidence in the government being able to deliver this.

I think it is fitting to understand some of these details – working out where the costs are, targeting those costs and ensuring we understand the real issues between the public and private sector claims. That is really, really important. Where are the pressure points in all of this? What is the type of claim? Again, mental health injuries are on the rise, and we have got to be looking at some of this as well. But we have also got to look at the many, many people that unfortunately look to try and take advantage of some of the system as well. We cannot have that; we have got to make sure that there are processes in place to stop that as well.

Finally, in terms of new authorities and everything else, you cannot just keep fixing things with new authorities. We have got to make sure we have the system streamlined, ready to go and available, and that is why we need a proper understanding of this. Lacking in detail – that is what this bill is. It lacks in detail, it lacks in substance. As I say, there are already a number of stakeholders that are very, very concerned with the fact that the minister has rushed this bill in and has not properly consulted, and we do not know the detail of what this minister is actually trying to achieve. Yes, we do agree that the system is broken, but it has been broken by the current government. We are happy to help fix it, but at the end of the day we have got to do this properly and not in a rushed manner where we end up back at the drawing board once again.

Darren CHEESEMAN (South Barwon) (15:25): It is with some pleasure that I rise this afternoon to make my contribution on the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023. In reflecting on this provision and in reflecting on the history of the bill that we largely accept from 1985, my mind actually turned to a little bit of research that I had done to look at WorkCover-type systems or compensation arrangements that we have had in the state of Victoria.

Indeed the first time, as far as I can see, that the Victorian Parliament sought to regulate or legislate a set of arrangements for workers in this state on this arrangement was 1914, and in reflection on that history I thought about what the nature of work looked like back then. Of course the nature of the workplace back then in so many ways was very different to what men and women would have found in 1985. In 1914 we had in areas such as, say, Ballarat and Bendigo, those very famous goldmining cities and regions, a lot of people who had made their way to those goldfields who originally were working for themselves as they chased alluvial gold on the surface. But as the economics changed and the orebody changed, what we saw was the formation of some very, very substantial mining companies. We saw, as a consequence of that, those mining workers going much, much, much deeper and the nature of the injuries that those workers would endure being that much more extreme by the nature of those dangerous workplaces.

I think the realities reflected in those 1880s and 1890s circumstances and the nature of work not just in the goldfields but indeed in many industrialised workplaces saw the formation of a Labor government and a Labor Party and of course saw the formation of trade union movements and trade unions, who sought to increase the rights of workers in this state, across the country and globally, and through the efforts of those early trade unions we saw the regulation of our workplaces and we saw new laws and new rights introduced into this place.

Then we move the clock forward to 1985. In 1985 after many, many decades of campaigning by trade unions, workers and indeed in so many ways Labor academics and the like, the Cain government had the opportunity in 1985 to introduce a fit-for-purpose, modern WorkCover set of arrangements that has served the people of Victoria since that period in time. That scheme has served our community and has meant that workers who get injured in the workplace can rely upon a scheme to help restore them to good health if indeed their injuries are the types of injuries that enable recovery, or to get them into a state, if they cannot be completely healed, where they can function at home, function in the community and hopefully enable them to go back to work if their injuries enable them to do that through being restored to good health.

I think all of us can reflect on the issues that exist in the workplace today versus the issues that existed in the workplace back in 1985. They are different in so many ways. I can certainly reflect that, as someone who is 47, the nature of workplaces today is quite different to when I entered the workforce. Reflecting on the types of injuries that we see today, sometimes they are quite different and sometimes they are the same, but what I would certainly say is there has been a real shift away from physical injuries to more mental health injuries, and that is a shift that has happened over a significant period of time. Indeed that shift is really creating all sorts of significant challenges to the viability of the scheme that we have in place right now.

From my perspective there are effectively four avenues that any government or any Parliament for that matter might pursue. Option one is to do absolutely nothing, and by doing absolutely nothing what we will ultimately see is the collapse of the WorkCover scheme in this state, because the resources in the scheme to pay out workers when they get injured and to help them get back to a fit and healthy state to enable them to function will just not be available. The alternative is ad hoc arrangements whereby the government puts money in, and indeed for a number of financial years that is exactly what our government has chosen to do to keep the scheme viable. I also note that when the Liberals were given that great gift of government, they actually took money out of the scheme. They attempted to undermine the viability of the scheme. The other course is to reform the scheme so that we get better outcomes by workers to enable them to return to work.

The existing set of arrangements is no longer fit for purpose. It is not achieving the outcome that we need, which is to have a financial scheme that delivers for workers and that is affordable for business to support, and that is why this reform agenda is so important. I would prefer not to be here making this particular contribution today, but the reality is that we need to reform this scheme. We need to make these hard decisions now, because if we do not make these hard decisions now, then the scheme will collapse and injured workers will not have a scheme that they can rely on to get healthy again, to get back to work, to get back into a decent family life. It is hard reform but it is necessary reform, and that is why I have decided to make this contribution. It is only ever Labor in government that will, at the end of the day, fight to have arrangements in our workplaces that support workers. I know my colleagues will fight every single day, along with our brothers and sisters in the trade union movement, to make sure we have a set of laws in this country that protect our workers.

Bridget VALLENCE (Evelyn) (15:35): The Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023 might more aptly be named the ‘Save WorkCover from Financial Collapse Bill’, because that is where this Labor government has got us to. Under their watch this tired nine-year-old Labor government have shamefully nearly killed WorkCover. Repeatedly, Premier Allan and the Minister for WorkSafe and the TAC Minister Pearson tell the Victorian people that WorkCover is broken. I find that quite an astonishing admission, given that Labor is in government and 100 per cent responsible for the health of the WorkCover scheme. It is this Labor government that has broken WorkCover.

Labor claim that they are here for workers, but the very scheme that supports sick and injured workers in Victoria has been so dismally managed that WorkCover under Labor is in financial disarray and is at risk of collapse. Even the Labor members in their contributions are saying that it is at risk of collapse. It is at the point where things are so dire that it has needed an injection of taxpayer funds to the tune of $1.3 billion just to prop it up, and not just $1.3 billion from the state budget. Furthermore, the Labor government has whacked businesses – businesses that create jobs and contribute to our economy – with significant hikes in premiums, in some cases for businesses in my community, small and medium businesses, 70 per cent, 80 per cent, 90 per cent higher premiums just this year. Some of these businesses suffering these massive premium hikes had not even had a claim in their workplace in the past five or more years. The government cannot keep whacking business to prop up failed government bodies. Indeed recent analysis that we have seen from the Parliamentary Budget Office, the independent watchdog, reveals that businesses will be slugged $17.8 billion over the next 10 years in additional costs for the WorkCover scheme.

We know WorkSafe Victoria is responsible for WorkCover, and the board of WorkSafe, chaired by a former Labor MP that this state Labor government appointed back in 2022, is now at risk of breaching its fiduciary duties – something that Minister Pearson in fact told us himself. That they are potentially in breach of their fiduciary duties just because WorkCover is in such financial despair is really troubling. It is something that every Victorian should be worried about. It is only Labor that could punish workers so badly that they would seek to strip workers’ ability to make claims for mental injury in the workplace. It is only Labor, who have managed this so poorly that they have nearly killed off WorkCover, that would seek to strip workers’ ability to make claims for mental injury in the workplace. And it is only Labor that could punish businesses so badly that they are hiking premiums to such a significant extent that businesses are actively talking about shifting their operations interstate or offshore, risking Victorian jobs and investment in our state. It is only Labor that has got us to this point.

Sadly, this bill before us that we are debating will go nowhere near to modernising the WorkCover scheme. It is absolute spin to have implanted in the title of the bill ‘WorkCover modernisation’, and Victorians are sick of the spin of this Labor government – this tired nine-year-old Labor government. I think that there is fierce agreement across this Parliament – indeed outside of this Parliament, across peak industry bodies, employers, Trades Hall and unions – that WorkCover does need serious reform, but sadly this bill falls well short and is in no way robust or comprehensive enough to ensure that it will become sustainable. That is the object. The object here is to make WorkCover sustainable, but this bill lacks sufficient detail and is insufficiently comprehensive to make sure that it will become sustainable, which is precisely why the Victorian Liberals and Nationals, in the spirit of wanting WorkCover to survive and thrive for both employers and employees, are exploring ways that we can strengthen this legislation, because we want to see it succeed. We want to see it sustainable. We want it to be there to support those vulnerable workers who through no fault of their own get injured at work, and we want it to support industries and businesses that depend on a sustainable and well-functioning WorkCover scheme.

Minister Pearson really should be hanging his head in shame for letting the scheme slide into such a mess. Frankly, he should resign. With WorkCover claims having tripled in recent years and the system being fundamentally broken by the Labor government, it was only back in May this year that the then Premier and Minister Pearson announced Return to Work Victoria. In theory, I support the concept. Obviously, after all, that is what the thrust of the original legislation is all about. It is all about rehabilitation and getting people back into work where they can contribute, they can stay connected, they can achieve and they can boost their self-esteem. In the minister’s media statement back on 19 May this year he stated that the government was:

… establishing Return to Work Victoria, so that no injured worker is left behind.

Well, this legislation will certainly leave some workers behind, and that is what we are hearing from the trade union movement. It is totally silent on the organisation Return to Work Victoria. In the bill briefing on Thursday of last sitting week, I asked the minister directly about his announcement back in May and whether Return to Work Victoria was funded in Labor’s state budget. The minister confirmed it was not funded. We are six months down the track since that announcement in May to modernise WorkCover apparently and to stand up a new body called Return to Work Victoria, and yet six months on, there is not a single cent allocated to Return to Work Victoria. I think that might surprise some of the members in the Labor government that there is not a single cent allocated to Return to Work Victoria, and yet the government’s aspiration is that this comes into place early in 2024. It is not resourced – no money, no workforce, no plan for Return to Work Victoria. In fact there is no mention of Return to Work Victoria in this proposed legislation – none whatsoever. In the media release:

Return to Work Victoria, with input from employers, unions, mental health and occupational health experts, will pilot supports for injured Victorians and those experiencing work related mental stress to return to work or training pathways.

There is absolutely no detail on what ‘pilot supports’ actually means. There is much more uncertainty both for employers and employees, uncertainty for businesses and uncertainty for workers.

Another thing this bill is silent on is the future of WorkCover premiums. The Labor government will try and pull the wool over Victorians’ eyes that if we, the opposition, do not support this bill, that it will be forced to hike premiums, yet again hurting businesses. But what the Labor government should do is be up-front and stop misleading Victorians that there is nothing in this bill to preclude premiums from being massively hiked again next year or the next year or the next. This provides no certainty to business and may force some businesses out of business or some businesses to move out of Victoria, which is something that I absolutely want to prevent.

After the shock of the premium hikes this year to secure the future of WorkCover, our proposal is to freeze premiums for two years and then peg premiums to CPI after that. That is reasonable and sensible. If the government was serious about getting this legislation up, then it would support these sensible amendments to the bill. This is why I support the member for Eildon’s reasoned amendment, precisely because we actually want to make the scheme sustainable. We want detail about Return to Work Victoria and how it will actually be funded and function in order to help workers return to the workplace, to be supported and productive. And we want to support industry, our manufacturers, our allied health workers, our hospitality businesses and the vast array of private sector businesses that employ people and generate economic activity. We want to give them certainty, and we will do so by freezing premium increases for 24 months and then limiting premium increases to CPI for a further 24 months. Essentially, the Liberals and Nationals want to make this system fairer and sustainable. I very much look forward to going into consideration in detail, as promised by the Labor government, tomorrow afternoon on this bill so that we can get a little bit more information and detail about the bill.

Anthony CIANFLONE (Pascoe Vale) (15:45): I rise to make a contribution on the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023. In doing so I acknowledge the Minister for WorkSafe and the TAC, his team and his department for their work and efforts in bringing this bill to the Parliament.

This is a bill that is all about helping Victorians get healthy and get back to work after injury. It is a bill that is about building a modern WorkCover scheme that gives security and certainty to Victorian workers and businesses. It is a bill that is about creating a sustainable WorkCover system for all of Victoria that can continue to support injured workers now and into the future. It is a bill that continues in the Labor tradition of leading with the introduction and modernisation of landmark reforms that have always been designed to support working people and working families to lead better and fairer lives.

It has been Labor governments that have always stood with able-bodied and injured workers. For example, at the federal level it has been Labor governments that have led the way when it comes to introducing landmark schemes designed to help working people, including as far back as 1944 through the first introduction of the pharmaceutical benefits scheme by the Curtin Labor government; the introduction of Medibank, which came into effect in July 1975, by the Whitlam government, the foundation of universal health care in this country; the introduction of Medicare in February 1984 by the Hawke Labor government, which continues to be the backbone of the health sector to this very day; the introduction of universal retirement savings via superannuation, which was passed by the Keating government in 1992; the dismantling of the Howard Liberal government’s extremely unfair WorkChoices legislation, which was replaced by the Fair Work Act 2009 under the Rudd and Gillard governments; and the introduction of paid parental leave and the national disability insurance scheme, the NDIS, by the Rudd–Gillard governments. Each of these and many other federal Labor initiatives have always been designed and implemented to support all working people, and each and every one of them was always met with some level of opposition, resistance or scepticism by the Liberal–National coalition parties.

But it is also at a state Labor level that we have continued to introduce complementary measures to support working people: the introduction of the casual sick pay guarantee for casual workers; the introduction of primary care health clinics and adult mental health and wellbeing services; the introduction of free TAFE, free nursing, free teaching, free kinder; and establishing the landmark royal commissions into family violence and mental health. The reality is that all of these initiatives and more have been designed to support working people and working families at their core, but just like at the federal level, at a state level each and every one of these initiatives has always been met with some level of opposition, resistance and scepticism again by Liberal–National coalition parties here in Victoria too.

When it comes to which side of the house is on the side of working people and which side of the house you can trust when it comes to introducing reforms that concern working people, it is well and truly this side of the house. Just think about the last time you ever heard a coalition government advocating for pay rises for workers, introducing universal health care for workers or introducing casual sick pay guarantees for casual workers. The reality is you never have heard this and you never will hear this from Liberal coalition governments.

In this context I come to the reforms now before the house pertaining to this WorkCover scheme modernisation bill. Just like all the previous landmark reforms I referenced, the WorkCover scheme was designed by the Cain Labor government in 1985 primarily to support workers with physical injuries. I refer the house to the contribution of the member for Bentleigh and also the member for South Barwon, who took us through the very barren landscape that injured workers experienced before 1985 and before these reforms came into place. The WorkCover scheme was designed by Labor, and only Labor now can be trusted to modernise the scheme today. WorkCover at its inception and still to this day is all about providing support to Victorian workers when they may become injured and covers insurance, workers compensation, workplace claims, worker rehabilitation, return-to-work pathways and dispute resolution. However, after 38 years of operations, the reality is that many modern-day workplaces now look very different to 1985, and the scheme simply no longer meets the needs for those it was designed to assist nearly 40 years ago. With significant technological advancement across many sectors and workplaces, the way we now work – and how we have worked – has dramatically changed. As a result, workplace risks and hazards have also changed. Where the risk of physical injury was initially the focus of WorkSafe Victoria, addressing the rise in mental injuries in Victoria has increasingly become the focus of WorkSafe. In this respect I draw the house’s attention to some of the key stats which outline WorkSafe’s growing number of claims and workers being supported. During 2022–23 WorkSafe supported over 98,000 workers, paying benefits totalling $3.1 billion. During 2022–23 WorkSafe supported over 23,600 workers to return to work after injury. There are currently over 30,000 active WorkCover claims.

However, the statistics also show us that WorkCover is in urgent need of reform to make it sustainable for workers and to make it sustainable for all Victorians, because WorkCover as it currently stands, as we know, is broken. Since 2010 WorkCover’s claims liabilities have tripled, driven by increased costs of weekly income support, many workers staying on the scheme for longer, return-to-work rates declining and the rise in mental injury claims, which was never envisaged when the scheme was originally designed. In 2022–23 there was a 17 per cent increase in mental injury claims and a 14 per cent increase in physical injury claims. This represents 4000 additional claims on the scheme since 2021–22. In 2022–23 WorkSafe recorded a performance from insurance operations loss of $1.8 billion. This is compared to $1.6 billion in 2021–22. These losses reflect the shortfall between premium revenue and claims costs in these years.

WorkCover premiums have remained static at 1.27 per cent and have not been increased since 2014 – no changes to premium rates in almost 10 years. That is why the bill seeks to make several amendments to the Workplace Injury Rehabilitation and Compensation Act 2013 to deliver on the Victorian Labor government’s commitment to building a modern workers compensation scheme which gives security to Victorian workers and businesses, which gets injured workers healthy and back to work following a workplace injury and which seeks to address the increasing financial pressure on WorkCover to amend structural issues.

To deliver on these reforms the bill contains a number of amendments to a number of acts, including (a) introducing additional eligibility requirements for mental injury so that only significant mental injuries diagnosed by a medical practitioner in accordance with the most recent Diagnostic and Statistical Manual of Mental Disorders, DSM, that predominantly arise out of or in the course of employment are compensable, (b) clarifying that there will be no entitlement to compensation for mental injuries that are predominantly caused by work-related stress or burnout arising from events that may be considered usual or typical and are reasonably expected to occur in a worker’s duty, (c) confirming that where a worker’s duties are usually or typically traumatic, mental injuries predominantly caused by work-related stress or burnout as a result of traumatic events experienced by a worker do remain compensable, (d) clarifying that disputes related to issues of eligibility decisions under the Workplace Injury Rehabilitation and Compensation Act 2013 cannot be referred to arbitration, (e) introducing a permanent whole-person impairment threshold of more than 20 per cent alongside the existing work capacity test for injured workers to remain entitled to weekly benefits beyond the 130-week second entitlement period and (f) requiring the minister to cause an independent review of the amendments to the scheme arising out of this bill by an expert panel during the 2027 calendar year.

Along with these reforms, the government will also be seeking to establish a new entity, Return to Work Victoria, which will be specifically tasked with helping injured workers to get healthy and to get back into the workforce. Return to Work Victoria, with input from employers, unions and mental health and occupational health experts, will pilot supports for injured workers and those experiencing mental health related stresses to return to work or new training pathways, because the reality is WorkCover at its heart has always been designed to be a safety net for injured workers, because we know that health and wellbeing outcomes for workers deteriorate and become worse the longer they remain on WorkCover or out of work, which can lead to prolonged injury and unemployment as well as social isolation and other health and wellbeing issues. Essentially, the longer a person is away from work, the less likely they are ever to return. That is why, to align with other states and territories, WorkSafe will update its test for workers receiving WorkCover weekly payments, as I said, with the 20 per cent whole-person impairment test.

Workers who experience less stress and burnout will no longer be able to access weekly benefits from WorkCover, but instead they will be eligible for provisional payments of 13 weeks to cover medical treatment, while enhanced psychosocial supports will also be provided to help them return to work or explore new training pathways. These planned eligibility changes through this bill, if passed, will come into effect in 2024 and will only apply prospectively. Victorians already receiving WorkCover under the current scheme will continue to do so as is currently the case. That is an important point, because it goes contrary to the fearmongering of many of those opposite and particularly the Greens in relation to this bill – that many on the scheme currently will be impacted now under prospective changes.

To help secure the scheme’s financial viability the government is also proposing to increase the WorkCover premium rate, which has not changed, as I said, since 2014, from 1.27 per cent up to 1.8 per cent. This is a significant step which will bring Victoria into line with other states and territories, including Tasmania, who have an equivalent rate of 1.9 per cent, South Australia, who have a 1.85 per cent rate, and Western Australia, who have a 1.72 per cent rate.

This is our plan to reform WorkCover so that it is sustainable for workers, businesses and the Victorian community now and into the future. When combined, all of these measures provide for a sensible, balanced, proportionate set of reforms that get the balance right to build a modern, sustainable WorkCover scheme for all Victorians. It is critical that this Parliament works to progress the consideration and implementation of this bill as soon as possible so we can get these reforms in place quickly, because any further delays will only continue to compound existing challenges. Of course in doing so I would have liked to respond in the time I have left to quite a number of those arguments that have been put forward by the opposition and the Greens in relation to stakeholder consultation and in relation to the impact that these reforms will have on WorkSafe’s current capacity to monitor workplace safety in existing workplaces on mental health and the like, but I commend the bill.

Tim McCURDY (Ovens Valley) (15:55): I am delighted to rise and make a contribution on the Workplace Injury Rehabilitation and Compensation Amendment (WorkCover Scheme Modernisation) Bill 2023. Like night follows day, the member for Essendon has created another mess, and this time it is in WorkCover, because the WorkCover system is not just broken, it is in tatters – we know that. We have all seen this train wreck coming for years, with spiralling claims going up and no action taken until all of a sudden it is too late. With the light switch turned on and the Victorian government having discovered that we are actually broke, ministers are now scampering to try and get some cost savings. It was highlighted to me back in 2020 when larger businesses in my electorate were saying that the WorkCover model was broken and something needed to be done. We yelled from the rafters back then to say it needs to be fixed but still nothing was done. Massive increases in claims have added many claims, but they remain unresolved and up to 10 times larger and longer than previous claims. We know that other states like Queensland have acted. They have been responsive and they have dealt with the wave before it became a tidal wave. Unfortunately, Victorians again were led down the garden path, and business will pay – small business, medium business and large business.

Only Labor can turn a self-funded scheme into a taxpayers nightmare. We have gone from a self-funded and profitable scheme to injecting $300 million in 2022 into the scheme, $450 million in 2021 and a further $550 million in 2022. It took the member for Essendon three years to see that there was a trend happening here, and now we have poured another $1 billion or more down the toilet. I do not know whether he worked this out for himself or whether the Treasurer tapped him on the shoulder and said ‘We’ve got to deal with this, because money is just pouring down the toilet. We have to solve this problem’. So all of a sudden there is a scamper, and here we find ourselves where we are today.

I am not sure that this bill solves what we are trying to set out to do, because when the minister briefed us on it, he was not exactly sure how it is going to pan out himself. He was not sure about whether the changes in the claims would change the amount of claims that we are getting and the time frames of those. As these calm waters turn choppy and the swells begin to break, where do the Premier and the member for Essendon turn? They turn to business. The answer to everything is: business will pay for the financial shortfall. We have seen average premiums go up by 42 per cent. Well, in my electorate I have not had anybody tell me their premiums have gone up by 42 per cent – it is always more than 42 per cent. I do not know where this average figure comes from. Somebody is getting a good deal, but everybody that has approached me in my electorate, whether they are from Wangaratta, Myrtleford, Bright, Cobram or Yarrawonga – all the big areas in my community – is saying their WorkCover premiums have gone through the roof, well and truly above 50 per cent. This is only half the solution. The other part of this unequal equation is to cut people’s eligibility for a claim. Labor boast that they are the party of the people, the party of the working class, the battlers and the underdogs. But when the money runs out, nobody is spared and everybody will pay.

How did we get here? Well, this financial mess is largely a result of the public sector. The member for Lowan was very clear in her message to this house earlier today when she spoke about the government: we know they cannot manage money, they cannot manage major projects and they cannot manage staff. Here we have found ourselves in this predicament, and the public sector is what is dragging down the whole WorkCover system. It is their staff that are making the private sector get thrown in the deep end, and they will have to bail out. That is quite unfair.

There has certainly been a rise in mental health claims and of course the growing tail that you have heard about from other speakers in this house today. Mental health claims come off the back of the world’s longest lockdowns and ridiculous work-from-home policies, and this bill changes the criteria to qualify to make it more difficult. Carving out the stress and burnout claims will not change the status quo, because the stress and burnout will just turn into anxiety and depression claims.

I am not sure we are going to fix anything by some of the wording in this bill, and I am not sure the minister has thought it through. We do need to have a closer look at this before it gets to the upper house and whether it gets beyond there. It is really important that we drill down into the detail because I do not think he has done his homework very well.

The SPEAKER: Order! The time has come for me to interrupt business for the matter of public importance. The member will have the call when the matter is next before the Chair.

Business interrupted under sessional orders.