NSW WorkCover
Questions raised as Minister flounders

by Peter Mac

NSW Minister for Industrial Relations John Della Bosca floundered in a most 
spectacular and humiliating way during last week's press conference on the 
question of a NSW WorkCover deficit.

When asked the amount by which the WorkCover deficit had grown, he first 
replied that it was 0.4 per cent. When pressed for the actual figure, he 
fumbled interminably in his copy of the latest actuarial report. After 
having been finally prompted by an assistant, he declared that the deficit 
had increased by $46 million over the last six months.

He subsequently fled the conference but was later forced to admit in a 
press release that the figure he had given was the "projected" increase in 
the organisation's deficit, not the actual increase, which was revealed in 
the report to be $250 million.

The total deficit now stands at $2.8 billion, according to the report's 
authors, auditors Price Waterhouse-Coopers.

The Minister's appalling performance raises even more serious questions, 
however. Was the Minister simply exhibiting monumental incompetence? Or was 
it a ministerial case of "Oh what tangled webs we weave, when first we 
practice to deceive"?

There have been, for example, suggestions that the WorkCover deficit figure 
padded out by actuarial data intended to indicate the amount debt likely 
several years down the track, rather than simply the current amount of 
indebtedness.

The use of huge deficit figures would provide the government with a 
convenient excuse to further reduce the amount that workers can receive in 
compensation for injuries received on the job.

But even if the deficit figure is accepted at face value, there has been no 
explanation given for the variation in the deficit figures since June last 
year. As recently as April this year, the very same Minister issued a press 
release boasting that the deficit had been "reduced" by $198 million in the 
last six months of 2001.

So what do you believe? Where did such a big and overlooked increase in the 
deficit come from? At least part of the answer seems to be that some of 
WorkCover's savings consisted of stockmarket investments, which were 
adversely affected by a drop in the market late last year.

However, no matter what the answers to these questions might be, the 
reality is, the NSW Labor Government has concentrated on protecting the 
insurance companies and organisations providing cover for injury to workers 
on the job, rather than protecting the injured workers themselves.

The real aim of the exercise is to reduce employer premiums and employer 
responsibility for injured workers, and safeguard insurance company 
profits.

Under Della Bosca's "reforms" to the way WorkCover operates, the amount of 
financial compensation an injured worker can receive is limited to the base 
rate for the work the employee was doing when he or she received the 
injury.

Extra expenses incurred as a result of the injury have to be borne by the 
injured worker.

The scheme provides compensation for medical expenses, but these are also 
capped. An injury that requires a highly specialised medical service, for 
example a complex spinal operation, may not be fully covered. Any 
outstanding fees have to be borne by the worker.

All in all, the situation is not one likely to brighten the hearts of 
workers on the job.

NSW Labor Council Secretary John Robinson summed it up neatly when he 
complained bitterly that the "NSW government reforms attempting to reduce 
the deficit of the State's workers' compensation scheme had unfairly 
burdened injured workers by capping their pay-outs."