‘Get into black’ — NSW WorkCover reforms

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‘Get into black’ — NSW WorkCover reforms

Reforms ‘urgently’ needed in WorkCover NSW and the state compensation authorities will be fast-tracked by the O’Farrell Government.

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Reforms ‘urgently’ needed in WorkCover NSW and the state compensation authorities will be fast-tracked by the O’Farrell Government.

Minister for Finance & Services, Greg Pearce made the announcement, on Friday, following the resignations of WorkCover Chairman Greg McCarthy and CEO Lisa Hunt.

‘I have made it clear that the WorkCover scheme in its current form is untenable — the deficit is growing and WorkCover must be reformed to get it back in the black,’ he said.

‘We are only in the position we are in today because the previous Labor failed to institute these vital reforms despite the warnings of Mr McCarthy and others.’

Former Labor Govt ‘masked’ problem

Relevantly, Pearce advised Parliament last October that the state’s workers compensation deficit had grown by $994m, to $2.36b, in the six months prior to 30 June 2011. He blamed the former Labor Government for having ‘pursued a strategy whereby it relied on investment returns to mask the deeper problems of the scheme’. He also attributed the deficit to increases in the costs of claims, ‘particularly in the number of workers choosing to opt out of the statutory benefits scheme to seek negligence-based damages from their employers’.

‘The WorkCover scheme has a history of deficit, having spent only 2½ of the last 16 years in surplus,’ he said at the time.

‘The liability is now comparable to when the scheme was reformed in 2001 by Bob Carr and John Della Bosca.’

WorkCover could be merged with other bodies

On Friday, Pearce said that one of the reform options now being considered by the government was developed by McCarthy and involves merging WorkCover and the four other compensation authorities — the Motor Accidents Authority, Dust and Diseases Tribunal, Sporting Injuries Committee and Lifetime Care and Support Authority — to achieve savings.

‘Both Mr McCarthy and Ms Hunt agreed there was a need to reform WorkCover and the government will now move to press ahead with the reforms under a new leadership team,’ he said.

‘The reforms will be fast-tracked with Deputy Chair, Nicholas Whitlam, acting as Chair and current Chief Financial Officer, Julie Newman, acting as CEO until replacements are appointed.’

Outgoing CFO and CEO thanked

Pearce thanked McCarthy and Hunt for their ‘tireless work’, following their independent decisions to step down.

‘Mr McCarthy has been a dedicated member of the Board of WorkCover since 2002, including the position of Chair since 2005, and was in the process of developing the reforms to turn the scheme around,’ he said.

‘His commitment to get the best out of the board and the organisation he chaired is to be commended but he has advised me that he believed it was time for a fresh approach.’

‘Ms Hunt has been CEO since 2010 and was instrumental in driving change in the workplace including the implementation of the new Work, Health and Safety regime.’

‘I thank Ms Hunt for her dedication to her role and wish her all the best in her future endeavours,’ Pearce said.
 
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