Communist Party of Australia

We acknowledge the Sovereignty of the First Nations’ Peoples.

Home


The Guardian

Current Issue

PDF Archive

Web Archive

Subscribe

Press Fund


CPA

About Us

Why you should ...

CPA introduction

CPA Policies

CPA statements

Contact Us

facebook, twitter


Major Issues

Indigenous

Unions

Health

Housing

Climate Change

Peace

Solidarity/Other


What's On

Resources

AMR

Links


Shop@CPA

Books, T-shirts, CDs/DVDs, Badges, Misc


 

Issue #1928      August 17, 2020

Editorial

Political corruption leads to icare nightmare

The disasters of WorkSafe Victoria and icare in NSW were exposed last month in a joint investigation by The Age, The Sydney Morning Herald (SMH) and ABC TV’s Four Corners.

In Victoria, WorkSafe, the state’s workers’ compensation scheme, “recorded a loss of $823 million in the year to June 30, 2019, and an additional $650 million in the six months to December 2019,” according to SMH. Why? Because insurance agents were gaming the system. WorkSafe provided financial incentives for insurers to get workers back to work with one such incentive being returning “seriously, and some cases, catastrophically, injured worker[s]” back to work after 130 weeks of receiving workers’ compensation. According to Victorian Ombudsman Deborah Glass, in order to claim this incentive insurance agents were “doctor-shopping and cherry-picking evidence to terminate claims,” behaviour that Glass would go on to qualify as “downright immoral and unethical.”

In NSW, the corruption of its principal workers’ compensation authority, icare, stems much deeper. icare was set-up in 2015 by the state government to replace the WorkCover Authority of NSW, which had racked up a $4b deficit. In order to wipe the deficit, the NSW government, then under Mike Baird, moved to terminate long-term injured workers after five years of receiving benefits. The financial impact was huge, icare began instead with a $4b surplus.

However, from its inception, icare was operating under rather peculiar circumstances. It hired key executives from Wesfarmers insurance who, rather than specialising in workers’ comp claims, specialised in home and business policies. The results were what you would expect. In 2018, icare introduced a new computer-driven claims model to assess and triage injured workers. The technology mostly replaced human contact. According to Greens MP David Shoebridge: “the idea was to save on claims handling, […] claims would be managed automatically […] then largely handled by a logarithm rather [...] than a claims manager and what we saw with that was a literal disaster.” Why? Because according to Peter McCarthy, a former adviser to the State Insurance Regulatory Authority, icare “introduced a model which would work really well for a car insurance claim or home claim […] but it just does not work for workers’ comp.”

The incompetency doesn’t stop there, from SMH: “NSW Treasury notes that the regulator is ‘increasingly concerned about the financial viability of the workers’ insurance scheme.’ Concerns include ongoing losses, problems with icare’s policy system, and service charges, which it says are high relative to other jurisdictions.” All of which have contributed to the $4b surplus vanishing. And another “debit bomb” is looming: “as many as 52,000 injured workers in NSW have been underpaid up to $80 million in compensation”

More alarming than the level of incompetence above is the corruption. According to the SMH, “leaked internal icare documents detail claims of credit card theft, concerns about international trips that were not disclosed in a timely fashion and how some contracts were awarded.”

You will not be surprised to learn that icare’s board is chaired by Michael Carapiet, a long-time Liberal Party donor and former Macquarie Group executive, who was appointed by NSW treasurer Dominic Perrottet, who the board is accountable to.

This brings us up to the current saga in the icare fiasco. At the start of this month it was revealed that the salaries of two of Perrottet’s personal ministerial staff were paid by icare, this included policy adviser Edward Yap. The problem with this, as noted by SMH is that “icare is a workers’ insurer funded by employers and is meant to be independent of the political process.” And while secondments to the government sector do occur they require to be documented as per regulations. Given the closeness of proximity to icare, it is no wonder that Perrottet, prior to these specific revelations, would qualify the work done at icare as “superb.”

Workers comp is meant to help workers. It is apparent that under capitalism the ability for workers comp to do this is severely undermined as insurance agencies are given financial incentives to throw workers off their payments or underpay their claimants all together. It is only under socialism, where the demands of the workers are put to the forefront, that we can ultimately see a system that works for the working class.

Next article – Airline woes

Back to index page

Go to What's On Go to Shop at CPA Go to Australian Marxist Review Go to Join the CPA Go to Subscribe to the Guardian Go to the CPA Maritime Branch website Go to the Resources section of our web site Go to the PDF of the Hot Earth booklet go to the World Federation of Trade Unions web site go to the Solidnet  web site Go to Find out more about the CPA