Update – South Australia Robin Shaw Manager, Self Insurers of SA Inc

1. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk Update – South AustraliaRobin Shaw Manager, Self Insurers of SA Inc Mt Gambier 21 May 2007

2. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk Legislation OHS&W (Penalties) Amendment Bill Territorial provisions now in place OHS&W (Inspections by Union Officials) Bill OHS&W (Aggravated Offences) Bill Discussion paper by WorkCover on changes to recover the unfunded liability & other amendments – feedback due 30 June; review report due Nov 07

3. Legislation – the wrinkles Proposed changes to WRCA: Discussion paper presented to the Minister 11/06 No explanation for 4 months delay in releasing it Ministerial statement preceded the announcement that the unfunded liability had grown to $722.7m as at 31/12/06 Review to be conducted by Alan Clayton (Bracton Consulting) and John Walsh (PwC) SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk

4. Legislation – the wrinkles Clayton and Walsh due to report Nov 07 Revised legislation target date 1/7/08 What will the liability be by then? $800m+? Why have a review? Nov 07 ties in with a Federal election John Walsh is highly respected in his field & was consulting actuary to WorkCover SA until 2003 A sense of irony in the Minister’s announcement? SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk

5. Legislation – the proposals Victorian system of step downs – 95% at day 1, 75% at week 13 Disability threshold at 2 years Medical panels on Vic model with Qld-type system of appointing panels Removal of medical questions from WCT Use of AMA Guides for most medical/incapacity questions SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk

6. Legislation – the proposals Deemed earnings in 1st 2 years Medical benefits cease 12 months after IM ceases Increase prescribed sum to Vic level ($373K) WBI threshold for access to lump sums No common law access 3-step dispute process – remove arbitration & Full Bench hearings in WCT, allow appeal to Supreme Court by special leave SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk

7. Legislation – the proposals Changes to worker legal cost structures to encourage early settlement Limit worker costs recoverable by solicitor to amount payable under Act Allow for cost orders against solicitors No reinstatement of IM where s.36 notice is appealed Lift levy cap to 15% & raise minimum levy Levy payable in advance SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk

8. Legislation – the proposals More discretion for WorkCover to manage self insurer structure changes Retain 200 worker requirement, but - Introduce an alternate remuneration formula Allow groups of incorporated associations Include ‘1-in-all-in’ rule in WRCA Allow WorkCover to consider the impact on the Fund when a SI makes an acquisition 46 other largely unexplained changes in the appendix SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk

9. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk Regulation Natural Consequences Model under review Exit fees – WorkCover says it has a simpler and fairer formula to offer Evaluation Practice Manual - supported by SISA Corporate restructure issues after Rinker v WorkCover- Chapter 9 of the Code SI Levy for 2007-08 settled after short debate Next challenges – guarantee multipliers & options to replace EOL insurance

10. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk Natural Consequences Model See Code of Conduct for detail on content Has absorbed much SISA time and energy since its introduction Is a backward step in its current form Has generated a few perverse outcomes Submission on reform to WorkCover Feb 07 WorkCover is open to suggested improvements Targeting July 07 for completion of review

11. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk SISA Late 06 - focus was on replacement of lost staff Dealing with regulator policy & its impact on SIs Improving communication with members Upping the tempo of membership participation Upgrading IT Improving professionalism of image and activity Systematising advocacy tools & resources Gaining presence in public policy initiatives Aiming for a smarter and more agile organisation

12. The SISA website is updated daily with news and events. You are urged to review it regularly – www.sisa.net.au

13. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk STRATEGIC PRIORITIES 07-08 Looking to move premises Strengthening SISA’s asset & business base Reinforcing credibility through self insurers’ roles as corporate citizens eg: Pooling of retraining & job placement resources Acting as mentors in regulatory safety improvement programs for small, & medium size business Playing a role in community health & safety projects Positioning SISA as the ‘go-to’ place for advice, advocacy & balanced feedback

14. SELF INSURERS OF SOUTH AUSTRALIA INC Employers Managing Their Own Risk Our message Self insurers demonstrate leadership in OH&S and injury management & we are happy to act collaboratively to share that expertise. However… Self insurers will not be political or regulatory sitting ducks – expect energetic, agile, informed, targeted and effective opposition to policy and legislation that unnecessarily damages business, employment and the competitiveness of the State economy.