Deputy Premier John Rau’s declaration that WorkCover is buggered comes eight years too late, says the architect of the State Liberal’s 2006 alternative.

“I was singing that from the rooftops in 2005 and you reported it,” former Upper House MP Angus Redford said yesterday.

He’s not alone.

John Walsh, managing partner at Donaldson Walsh lawyers, said the “buggered” assessment has its roots in the actions of a decade ago.

Redford said it was  a case of “years wasted”.

“All Labor has done since then is reduce worker’s entitlements and fiddle with some minor structures, wasting hundreds of millions of dollars in the process,” Redford said.

“How South Australia has put up with this for so long amazes me; but we are a forgiving lot here.”

The former upper House MP and shadow industrial relations minister had one of his early cracks at WorkCover’s mismanagement in 2005.

It was late April and I had a break on news that more than 2000 compensation cases and 50 claims management staff were in limbo as insurance giant Vero was getting ready to pull out from the South Australian market.

Vero had told WorkCover it was leaving Adelaide wouldn’t be be tendering for the latest round of contracts after its relationship with WorkCover had soured.

“The one thing the ALP has never admitted to, or addressed, is that WorkCover is incompetent,” Redford said this week.

He recalled his comments of 2005 that the Vero withdrawal was becoming a common theme. “It’s about how WorkCover treats its partners,” he had told me at the time.

“They don’t have good relationships with employers, lawyers, claims managers or the AMA.”

As it turned out, Vero would be joined in the exodus by CGU, Allianz and QBE.

The Redford comments fitted with my own observations of the diminishing relationship between the Corporation and the various groups which supplied rehabilitations services, claims management and insurance expertise.

I’d contacted Redford after interviewing the WorkCover CEO Julia Davison in February 2005.

The hour-long interview left me with the distinct impression that the government-owned corporation was out of touch with the business to which it was so central.

During the interview Davison constantly sought advice on operational matters – from her PR man Paul Roberts.

Their pitch was that they were making serious inroads into solving the return-to-work rates.

The problem had an underlying urgency – unfunded liabilities (the gap between estimated future claims and future revenue) had blown out to $572 million.

As InDaily reported last week, that figure is now around the $1.4 billion mark.

“And they’ve not been able to fix the return-to-work problems,” Redford said this week.

“They took the competition out of the market when they went from multiple claims managers and providers to a single manager and they did the same with legal services and other outsourced components.

“And they failed to fix the cultural issue of having a proper relationship with these agencies.”

Redford said John Rau’s assessment that WorkCover is buggered is “spot on”.

“But I said that eight years ago and the main reasons haven’t changed and he’s got no solution.”

So, what is Redford’s answer?

Redford’s model is to abandon WorkCover as the over-arching authority and move responsibility to industry associations.

“The Local Government Association is a shining example of how to do it.

“The LGA runs workers comp with insurance underwriters and it turns a profit.

“Similarly, the Motor Trades Association could do it, the Australian Hotels Association, Farmers and Graziers and BusinessSA for the businesses who don’t fit an industry classification.

“It would actually be more flexible. if a bloke injured himself in a crash repairers and could get straight back to work, the MTA could get him transitional work as a desk jockey at a service station.

“WorkCover could retain a role as the provider of last resort.”

Redford says that changing to a profitable and effective system of workers’ compensation would be a major boost to state finances.

“You get better return-to-work and then the underwriters and actuaries make adjustments to your unfunded liability calculation to bring that right down.

“WorkCover wouldn’t need all of the $2.25 billion in funds it has invested to create cash flow that offsets its annual losses.

“The money could go back into general revenue.

“Workers would also get a better deal by getting better quality rehabilitation.”

The Redford model of using industry associations would also be attractive to the associations, giving them more to offer prospective members.

If the State Liberals took his model to an election, it would boost the bottom line of its policy costings.

Another long-term critic of WorkCover’s performance, John Walsh, has a similar view to Redford’s.

Walsh is founding and current managing partner of Donaldson Walsh and runs the firm’s Self Insurance, Workers Compensation and Workplace Law practice.

“Back in the late 90s and early 2000s I would go to conferences and WorkCover was held up as a shining example among the 11 or so schemes operating in Australia,” he said.

“Then it all turned…

“While the Act had remained mainly the same, its performance faltered as the culture inside WorkCover became toxic.

“The only conclusion I can draw from that is that the scheme’s been mismanaged.

“That’s something the board members of that period have to take responsibility for.”

Walsh told InDaily that while it’s long overdue that the State Government recognised the scheme has become a basket case, he’s not sure what action it could take.

“You have to take him (Rau) at his word, that he’s got a model in mind.

“But I can’t imagine what it could be. He won’t hand it over to private insurers. So he really can’t ‘decommission it’.

“The other problem he has that as with all major changes, there are always unintended consequences.”

Walsh said the WorkCover Scheme had long ago drifted away from its original purpose.

“One of the guiding principles was to make it simple for workers to make a claim and have it processed without having to use a lawyer.

“The Act has now become far too complicated for the average worker. And for WorkCover it seems.”

And that’s what these two men have been saying for the best part of a decade.