Evidence to a Parliamentary Committee by WorkCover Chairman Bruce Carter had now cast doubt on a key Rann Government claim on WorkCover.
Liberal Member of the Legislative Council, Rob Lucas, said today that for nearly two years the Government and especially Minister Michael Wright have been boasting that the decision to approve a single, monopoly claims management agent (EML) for WorkCover would, within two years, result in a reduction of $100 million per year in unfunded liabilities.
For example, in Parliament on 5 December 2006, Minister Wright listed all the actions taken by the Government to fix the problems within WorkCover, including the following claim:
“For instance, in appointing a single claims agent, Employers Mutual, to handle all claims it expects to cut the claims liability by up to $100 million a year within two years.”
However, last week in evidence to the Statutory Authorities Review Committee (SARC) hearing on WorkCover, Mr Carter was quizzed on whether this key target would be met by the July 2008 deadline and if not what action would be taken. He said:
“I am happy to speculate, it will be very difficult. One of the reasons that we put the submission to the Government in November 2006 was that, with EML having come in, it has been more difficult than what they expected.”
Mr Carter summarised his views by stating simply:
“My personal view is that it will struggle to get there.”
Mr Lucas said the contract with EML supposedly includes significant penalty provisions if key performance targets are not met. Mr Wright must now indicate publicly what specific financial penalties will be imposed under the contact if this absolutely fundamental target is not met.
“Given that the contract includes bonus payments to EML if future targets are met, then Mr Wright also needs to explain if bonus payments will be paid if future targets are met due to the passage of the Government’s legislation and not due to actions by the claims manager.”
This issue and other contract related issues will be further explored at the next hearing of SARC with WorkCover.