Premier Peter Malinauskas seals deal with unions and business over workers’ compensation

A late-night compromise deal has been hammered out over controversial workers’ compensation changes in South Australia.

Unions and business are uniting behind Premier Peter Malinauskas over controversial workers’ compensation changes after he hammered out a late-night compromise.

Intensifying pressure on the Liberal opposition, unions have shelved resistance to government legislation that limits employer premium rises, in return for increased injury assessment thresholds.

This means so-called whole person assessment thresholds would rise from 30 per cent to 35 per cent, while preventing employer levies rising beyond 2 per cent – the Premier’s key demand.

Seriously injured workers also will be given the choice to get a single lump sum instead of weekly payments until retirement age, while currently injured workers also will be able to redeem weekly payments for a lump sum.

Employer peak body Business SA has warned change was needed to prevent higher costs being passed on to customers, limited wage rises or forced job losses.

But Opposition Leader David Speirs accused the Premier of leading a shambolic process by making policy on the run, likening him to an “arsonist setting fire to their own house and then getting credit for putting out the blaze”.

The Liberal party room met on Tuesday morning to forge a position on the ReturnToWorkSA compensation legislation, which Mr Malinauskas has demanded be passed by July 7 – ahead of parliament’s midwinter break. But the opposition was handed only a summary and not the legislation, so has not reached a stance.

Premier Peter Malinauskas has brokered a late-night deal on changes to workers’ compensation. Picture: NCA NewsWire / Brenton Edwards

Mr Malinauskas hailed an agreement he said “protects workers and business”.

“I have long said I want to lead a pro-business Labor government, which unashamedly protects workers but also strongly supports businesses,” he said.

“This is a sensible compromise, which ensures injured workers will get the protection they need, while also ensuring businesses are not hit with significant increases in their Return to Work premiums.”

It is understood Mr Malinauskas sealed the deal late on Monday night, after personally leading intensive negotiations throughout the long weekend.

The legislation change was needed after a 2019 court decision in favour of truck driver Shane Summerfield, who was left permanently injured after he broke his leg in a 2016 workplace accident.

That decision means people injured at work can combine their injuries for compensation claims, including injuries as a result of the original injury. Previously, each injury was separated for assessment, even if they formed a single claim.

Combining injuries can increase the percentage of assessed impairment exponentially, significantly increasing compensation and helping push some workers above the (previous) 30 per cent level for lifetime support.

This caused ReturnToWork SA liabilities – which are funded through premiums paid by businesses – to soar to $1.1bn, with an extra $100m liability a year forecast if the government had not intervened.

Mr Malinauskas had been accused of attempting to rush the legislation through the parliament, but he said the previous government left him with no choice.

He pointed out that the Summerfield decision was first handed down in 2019 but the Liberals had not acted over the following years to protect businesses from soaring levies.

“We came to government and very quickly received a briefing that the prospect of a very substantial levy increase was imminent,” Mr Malinauskas said.

“We were deprived of time by virtue of the fact that the former government left this as a time bomb, ticking ready to explode within days after the election. We’ve now defused that bomb.”

Australian Nursing and Midwifery Federation (ANMF) state secretary Elizabeth Dabars. Picture: Tricia Watkinson

Mr Malinauskas detailed the elements of the compromise at a Tuesday morning press conference, where he was joined by business and union leaders.

Australian Nursing and Midwifery Federation (ANMF) state secretary Elizabeth Dabars acknowledged the negotiation process had been “a harrowing experience, most of all for the workers who are affected by it”.

“We don’t like every aspect of this legislation, we do think that, ultimately, workers are still negatively affected,” she said.

But Ms Dabars said her union welcomed the concessions made by the government, and was heartened by its commitment to undertake a “root and branch review” of worker’s compensation legislation in years to come.

Shop, Distributive and Allied Employees’ Association (SDA) secretary Josh Peak said the changed proposal was “a significant improvement” on the original legislation.

“(It) means that our most severely injured workers are going to be protected from further change,” he said.

Business SA chief executive Martin Haese commended the government for leading the change but maintained businesses should not have to deal with rising premiums in an “extremely uncertain environment”.

“We now have an environment with rising interest rates, rising inflation, supply chain disruption, skills shortages and a multitude of other issues,” he said.

“What we, on behalf of the business community in South Australia, do not want to see is a pronounced increase in Return to Work premiums.”

Mr Haese called on Mr Speirs to work with Mr Malinauskas to find an outcome which preserves a “sustainable cost base” for employers across the state.

Business SA chief executive Martin Haese. Picture: Kelly Barnes/Kelly Barnes Photos

Knitting together the opposing union and business positions represents a significant early victory for the Premier, a former shop assistants’ union state secretary, in his stated quest to balance the interests of workers and capital.

As late as Sunday afternoon, ACTU president Michele O’Neil demanded the government “stop plans to slash injured workers entitlements and sit down with unions and health experts”.

Mr Speirs said the Premier had been caught out making policy on the run and turned the whole process into a shambles.

“Let’s not forget this Bill was introduced on budget day and, less than 24 hours later in parliament time, it’s been yanked back.,” he said.

“Peter Malinauskas succumbed to union pressure and tried to claim his backflip as a brilliant midnight deal, when in actual fact he’s been forced to clean up his own mess.

“This is like an arsonist setting fire to their own house and then getting credit for putting out the blaze.”

A survey of 757 members of nine peak industry groups found 57 per cent would pass on the cost of higher levies to customers while 31 per cent would cut staff numbers.

Almost half said they would limit wage rises, 24 per cent would cut staff hours while a quarter said they would absorb the cost.

The workers compensation levy now stands at 1.7 per cent, rising to 1.8 per cent next financial year, but it is on track to hit 2.2 per cent in 2023-24, costing large firms hundreds of thousands of dollars in premiums.