In South Australia and New South Wales, change is in the air.

Lisa Hunt, new CEO of WorkCover NSW, took the helm on January 4, while Julia Davison, current CEO of WorkCover SA, recently announced that she will be leaving her job mid-2010.

Davison has had a wild—and by some accounts, very successful—ride. Under her leadership, WorkCover SA began to implement sweeping and contentious legislative reforms, saw both a massive blowout of unfunded liabilities and the beginnings of financial recovery, and, after years of being known as the national RTW basket case, in 2008 / 2009 posted improvements in RTW rates, at last bringing the state close to the national average on this all-important measure.

She said it is the right time for the move. “By the middle of the year legislative reform implementation will be complete, our major IT system will be implemented and we will be expecting further liability release for the Scheme. It will be a good time to hand over to a new Chief Executive who can develop the next five year strategic plan and build upon the reforms and initiatives that will continue to improve return to work for all South Australians,” Ms Davison said.

However, not everyone is happy with the direction WorkCover has taken under Davison, or with the Rann Labor government, which legislated for the reforms she has rolled out.

Gordon Bowles, a long term WorkCover recipient who in November 2009 went before one of South Australia’s new medical review panels, told Stateline that, as a result of the changes “People who have voted Labor all their life have spoken to me and said they won't be doing it this year.”

Bowles’ comment highlights that workers’ compensation is, amongst other things, a political hot potato. He, and employee representatives such as the Australian Manufacturing Workers Union, are questioning how injured South Australian workers are going to be affected by what insiders have told us is a very close relationship between the South Australian government and WorkCover bureaucracy.

It is a question worth asking.

While it is clear that WorkCover SA’s performance has improved in many important respects (read Mary Wyatt’s analysis of the situation here), it also seems likely that the recent financial improvements depend in part on the ejection of some long term claimants from the system. Poor RTW management and needless work disability go hand in hand. Given South Australia’s history of poor RTW management, what are the ethics of simply turfing long term WorkCover recipients off payments?

We don’t dispute the fact that financial viability is an important part of any workers’ compensation scheme. However, a media and business focus on “ballooning debt” might well obscure the plight of injured workers from politicians eager to boost approval ratings, and from bureaucrats eager to please.  

WorkCover SA’s stated aim is to ‘rehabilitate and compensate injured workers following a workplace injury, and return them to safe workplaces and the community’. The Rann government’s aim, with an election looming in March of 2010, is to get re-elected; and WorkCover’s still massive unfunded liability is unlikely to do them any favours at the polls.

Across Australia, robust systems are best served by government and policy makers working independently but together. Each using the best information to develop policy and manage their area of responsibility. 

Over the years there has been criticism of other Australian WorkCover organisations for not being straight with the government of the day.  Backbenchers initiated a parliamentary enquiry in Victoria in the 90s, and word was this was prompted by concern that information flow from the Authority to the government was insufficient. In short, the Authority was not being straight with the Liberal government of the day. 

At other times, in other places, WorkCover authorities have been criticised for too closely following their political leaders. 

If governments are kept in the dark about what is going on at workers’ compensation and safety authorities, things tend to go awry. If government has too much sway, might the long term consequences be just as negative?