A belated backflip by the Labor Government and the WorkCover Board to introduce competition into WorkCover claims management from 2013 is welcomed by the Liberal Opposition.
Shadow Finance Minister Rob Lucas said the decision taken in 2006 to remove all competition from claims management and use a monopoly claims manager has been an unmitigated disaster.
When EML was appointed monopoly claims manager, the then WorkCover CEO Julie Davison said:
“Employers Mutual has committed to targets that would achieve the necessary liability reduction to deliver a fully-funded scheme by 2012-13. They convinced us they have what it takes to create the turn-around in claims liability we expect.” (“New Agent Will Make WorkCover Better for Everyone, WorkCover Media Release, p1, 19/01/2006)
The reality is WorkCover’s unfunded liability is $865 million, according to the most recently available figures, released in March. There has also been widespread criticism from injured workers and employers about EML’s performance.
After a two year inquiry by the Legislative Council Statutory Authorities Review Committee, in February 2010 it recommended the monopoly decision be reversed:
“Recommendation 5: When the claims management contract is next put out to tender the number of claims managers be increased to 2 or 3 to remove the monopoly element of the current system.” (Parliament of South Australia: “Inquiry into the WorkCover Corporation of South Australia”, 52nd Report of the Statutory Authorities Review Committee, p12, 2010.)
The Liberal Party accepted this recommendation and released its pre-election policy promising to introduce competition. However, the Labor Minister responsible for WorkCover, Paul Holloway, rejected the recommendation in June 2010:
“There was no evidence placed before the Committee to suggest that multiple agents will result in improved claims performance, case management or improved services to injured workers.” (Response of the Hon Paul Holloway MLC to the “Inquiry into the WorkCover Corporation of South Australia”, 52nd Report of the Statutory Authorities Review Committee, p3, 16/09/2011).
“In fact, soon after that, WorkCover announced that they had extended the monopoly contract to EML by another 18 months until 2013,” Mr Lucas said.
“Sadly, it has taken too long for the Labor Government and the WorkCover Board to admit they made a mistake and reverse their decision.”