14763
LEGISLATIVE ASSEMBLY
Tuesday 19 June 2001 ______
Mr Speaker (The Hon. John Henry Murray) took the chair at 2.15 p.m. Mr Speaker offered the Prayer. Mr SPEAKER: Order! I have advice from the Leader of the House that some members are having difficulty attending the Parliament. I shall leave the Chair until the ringing of one long bell. [The House resumed at 5.16 p.m.]
QUESTIONS WITHOUT NOTICE ______
WORKERS COMPENSATION LEGISLATION
Mrs CHIKAROVSKI: My question is to the Premier. How does the Premier explain that after weeks of negotiations the latest version of his workers compensation legislation has been described as worse than the original bill that the Premier backed down on by none other than the Hon. Jeff Shaw, the man the Premier has described as the best Attorney General in the history of New South Wales?
Mr CARR: First of all, it is not what he said.
Mr SPEAKER: Order! I call the honourable member for Hornsby to order. I call the honourable member for Bega to order. I call the Leader of the National Party to order. I call the honourable member for Hornsby to order for the second time.
Mr CARR: And, second, what does the Leader of the Opposition say about the approach of the Coalition to the clear, inherited vulnerabilities of the workers compensation scheme that now exist in New South Wales? Would she propose, for example, that in response to the blow-out in the deficit, New South Wales does what Victoria did under Jeff Kennett—that is, abolish all common law rights? Under the Coalition in Victoria, there was an abolition of all common law rights; they were done away with. Let me put the Leader of the Opposition on notice. Is that what she would propose in this State? What Jeff Kennett did is clearly and transparently not what we are doing.
Mr SPEAKER: Order! I call the honourable member for North Shore to order.
Mr CARR: It is clear to anyone who looks at our legislation that it is not what we are doing. It is, however, what a Coalition Government did in Victoria.
Mr SPEAKER: Order! I call the honourable member for Oxley to order. I call the honourable member for Wakehurst to order.
Mr CARR: Imagine the situation of a coalition government in New South Wales, years from now, facing a blow-out in the deficit, the deficit being $4 billion or $5 billion. How would that coalition government respond? It is as plain as a pikestaff: it would abolish common law rights as Kennett did in Victoria.
Mr SPEAKER: Order! The Premier's reply has taken about three minutes. Five members have been called to order, and one member has been called to order twice. I warn members that the patience of the Chair is being rapidly eroded.
NEW SOUTH WALES AMBULANCE SERVICE Mr ANDERSON: My question without notice is directed to the Minister for Health. What improvements have been made to the New South Wales Ambulance Service since the release of the Auditor- General's report earlier this year? 14764 LEGISLATIVE ASSEMBLY 19 June 2001
Mr SPEAKER: Order! I call the honourable member for Coffs Harbour to order.
Mr KNOWLES: I thank the honourable member for Londonderry for his interest in this area. I can report to the House that the important changes to the Ambulance Service that were commenced in March this year are slowly beginning to produce change and improvement. At that time I supported the Auditor-General's view that reform was necessary, and of course reform is under way. At the outset I stress that the improvements that are now occurring in the Ambulance Service are only in their early stages. I do not want to pretend to the honourable member or to the Parliament that they are likely to continue without the ongoing attention of management and the co-operation of the unions. It would be easy to see the strides and gains that we have made in the last three months disappear, and the Government does not intend to allow that to happen.
I can report that over the past three months there has been real effort to improve communication at all levels of the service. I particularly place on record my congratulations to the on-road staff, the men and women of the Ambulance Service, for taking on the issues raised by the Auditor-General. It is a measure of their skill and professionalism that they have chosen to work with, rather than against, the reform process. For example, I can inform the House that at the end of the first quarter of this year emergency response times improved in both metropolitan and rural New South Wales. Of particular note, recent response time performance improved by almost 24 per cent in the Sydney metropolitan area. For example, in April last year 34 per cent of vehicles arrived on the scene within eight minutes, whereas in April this year that figure improved to 43 per cent.
The reason for that improvement is a commonsense approach and a commonsense program conducted by the ambulance officers in identifying local issues, working collaboratively, sharing information among their colleagues, and creating a culture of improvement. Those changes have been underpinned by further improvements. A rapid responder program means that ambulance officers at supervisor level now have greater involvement in day-to-day patient care. This means the first response to an urgent call may well be a senior officer, who will provide emergency life-saving treatment while the ambulance is on its way. This innovation, derived from the ambulance officers themselves, not only provides ambulance officers with 24-hour support and supervision if it is needed but also provides a better service to the public.
The past three months have also seen a better delineation of non-urgent ambulance transport services and what we call the 000 emergency calls. The Ambulance Service, after many years of debate industrially about this issue, will shortly establish a dedicated patient transport service for planned non-emergency cases, that is, the transport of individuals to their regular treatment, such as dialysis and that sort of thing. The New South Wales Patient Transport Service will formally commence its operations on 11 August this year following the completion of training of an additional 37 patient transport officers in Sydney. This will enable up to 32 dedicated Patient Transport Service vehicles to be available at the busiest times, and for the hours of operation of the service to be expanded. This will free up our ambulance officers to do what they should be doing—that is, responding to more urgent and emergency-type calls.
The changes in management, which were largely brought in just prior to the Auditor- General's Report was tabled, consolidate a range of management functions under the General Manager of Operations, a position occupied now by Mr Steve Winfield, who has been brought in from the United Kingdom. That has been done with the agreement and support of the staff. I understand Mr Winfield is conducting a major statewide tour and has been well received by the officers on the ground.
Ambulance area boundaries have been realigned to more closely match area health service boundaries and we are beginning to reduce the weight on operational management. There are real efforts to devolve accountability closer to station level. We are also moving to increase the skills of ordinary ambulance officers to better incorporate and expand their roles in delivering services to the community. This is particularly important in the context of the metro plan announced last week, and the comments by the Auditor General about better integrating the New South Wales Ambulance Service with the area health services to ensure smooth throughput between the Ambulance Service and the acute care system.
The highly contentious roster trial at three ambulance stations—Ryde, Naremburn and Wahroonga— has now been completed. Honourable members might recall that in this House I reported 17 trips to the Industrial Commission attempting to get that trial established in three stations out of the State's 228 stations. The trial was aimed at achieving greater flexibility around rosters and overtime requirements by introducing two new staggered 12-hour shifts, one beginning at 7.00 a.m. and the other at midday. I can inform the House that despite the difficulty in establishing that three-station trial the preliminary results indicate an improvement of about 30 per cent in response times. Even better news is that ambulance officers are beginning to come up with their own 19 June 2001 LEGISLATIVE ASSEMBLY 14765 suggestions about rosters. That is a creative response. Something that we were told during our 17 trips to the Industrial Commission would never occur has occurred, and on preliminary results there has been a substantial improvement in response times. More power to the officers who have worked on that trial. None of those changes could have occurred without the partnership of the ambulance work force. The Health and Research Employees Association has developed solid structures—
Mr Hartcher: Point of order: The point of order concerns the running of this House. It has come to the attention of honourable members that members of the community outside, members of the construction union, wish to gain access to the public gallery of Parliament as members of the public so they can hear the parliamentary debate. Their access is being denied. I ask on behalf of the members of this House that you allow the citizens of New South Wales access to Parliament. That is a decision of yours, Mr Speaker, and we are asking that you direct the authorities to allow members of the public access to the public gallery.
Mr KNOWLES: None of these changes could have occurred without the co-operation of the ambulance work force. There are now vast improvements in clinical skills development and in education and training in the service and the work force generally. These are small steps on what inevitably will be a very long road. The Government has committed itself to work with the Auditor General in the implementation of his report to enable the ambulance work force to deliver improved services for the community of New South Wales. I congratulate those members of the Ambulance Service work force who have been participating over the past three months to effect substantial improvements. The organisation needed to change its environment into one that is responsive to current community standards. We will continue to watch with interest the ongoing progress of the reforms and will work together co-operatively to make sure we improve the quality of service for the people of New South Wales.
[Questions without notice interrupted.]
DISTINGUISHED VISITOR
Mr SPEAKER: Order! I acknowledge the presence in the gallery of the former member for Monaro, Peter Cochran.
QUESTIONS WITHOUT NOTICE
[Questions without notice resumed.]
PARLIAMENT HOUSE BLOCKADE
Mr SOURIS: My question is directed to the Premier. Why did he stand on Parliament's front verandah to welcome his members before question time but then hide in his office and ask the Speaker to pretend that Labor members of Parliament were unable to enter the building?
Mr SPEAKER: Order! I call the honourable member for Lachlan to order. I call the Leader of the National Party to order for the second time
Mr CARR: There was a blockade of the Parliament.
Mr SPEAKER: Order! I call the honourable member for Hornsby to order for the third time.
Mr CARR: The honourable member for Lachlan is saying, "support your leader". Did the former member for Monaro arrive to support his leader? I was reading a newspaper report of the speech of the Leader of the National Party— Mr SPEAKER: Order! I have extended a degree of latitude to members with regard to interjections. I will no longer do so. I call the Leader of the National Party to order for the third time. Mr CARR: It may come as a revelation to the House but when I come to the House I use my office. I'm not hiding— Mr SPEAKER: Order! I place the honourable member for Pittwater on three calls to order.
Mr CARR: I was in my office. Where else should I be? 14766 LEGISLATIVE ASSEMBLY 19 June 2001
Mr SPEAKER: Order! I have called the Leader of the National Party to order three times and I have given him two additional warnings. That is a total of five occasions on which I have warned the Leader of the National Party about interjecting. That is two more warnings than any other member has received. If the Leader of the National Party speaks again during question time without adopting the proper procedures I will ask the Serjeant-at-Arms to remove him from the Chamber. Mrs Chikarovski: Point of privilege: It has always been the custom of this House that the gallery is open and members of the public are allowed to be admitted while the House sits. I have just been outside and spoken to the members of the public who would like to come into the gallery to listen and to ensure that there is proper debate on some issues. This is an important point in relation to the proper operation of the House and to the rights of members of the public to see what happens in the House so that we do not operate behind closed doors. We are supposed to be open and accountable. I have spoken to the people waiting outside, including members of the Bar Association. Mr SPEAKER: Order! There is no point of privilege. The Leader of the Opposition will resume her seat. CHILDREN IN PARKED CARS CAMPAIGN Ms SALIBA: My question without notice is addressed to the Minister for Community Services. What is the response to the Department of Community Services campaign on leaving children unattended in cars? Mrs LO PO': Last year the Department of Community Services [DOCS] received almost 90 reports of serious cases of children being left unattended in cars. These incidents resulted in many young children being treated for dehydration and heat stress, and have attracted a high degree of media and community concern. Let me remind honourable members about some of the cases. On 19 January eight security guards at the Parramatta shopping centre found a 22-month-old boy locked in a car with the window just three centimetres down. It is alleged that the child was left in the car for an hour. The child was dehydrated. The following day police reported that a 21-month-old baby girl had been found at the same shopping centre, again by security guards. It is alleged that the girl was locked in the car for 30 minutes and the door had to be forced open to remove the child. It is thought that many more incidents went unreported. While most cases in which DOCS became involved were not as serious as those, the NRMA rescued more than 1,300 children from locked vehicles in New South Wales. That is an average of nearly five calls a day. The dangers of leaving children alone in vehicles are well documented. In many cases the temperature inside a parked car on a typical Australian summer day can be 30 to 40 degrees hotter than the outside temperature. Within the first five minutes of a car being closed the temperature rises by a staggering 75 per cent. The majority of the temperature rise—90 per cent—occurs within the first 15 minutes. Young children left alone in this situation are at serious risk of heat stress, dehydration and asphyxia, all of which can be fatal. Parents not only risk the health of the children by leaving them unattended in vehicles; they also run the risk of fines of up to $22,000 under the Children and Young Persons (Care and Protection) Act 1998. In December last year DOCS undertook a campaign to promote this important issue to the wider community, and embarked on its highest profile campaign in recent years. The result of the campaign has been a substantial increase in reports to DOCS about children being left unattended in cars. Over the time the campaign was conducted, from January to March this year, 56 reports were made, compared with 17 reports made during the same period last year. Between July 2000 and March 2001 DOCS had taken 114 reports. It is staggering that 50 per cent of the reports were made while the campaign was conducted. While the ideal would be to have no reports, these figures show that the community is willing to report situations in which children may be at risk. While 70 per cent of reports about children being left in cars come from police, new groups of people are now reporting, with 14 per cent of all the 2001 reports coming from groups that did not report during the previous period. The increase in reports to DOCS is the result of a greater awareness in the general community. Children being left in cars has also been identified as a serious issue by the NRMA. The NRMA has established a priority service which responds immediately to any calls about children locked in cars. This is mostly used by New South Wales police but can also be accessed by the general public by calling the NRMA on 131 111. Of course, people are encouraged to ring 000 in an emergency. This campaign aimed to raise awareness of the dangers involved in leaving young children locked in cars, especially in the summer heat, and in doing so educate the community and challenge existing habits. A full-colour advertisement was developed with the caption:
Zero to 60 degrees in five minutes. Parked cars kill kids. When you leave your car take your children with you. In an emergency call 000. 19 June 2001 LEGISLATIVE ASSEMBLY 14767
This advertisement was placed in publications such as TV Week, New Idea, Family Circle, Practical Parenting, the Daily Telegraph and the Sydney Morning Herald. It was seen on more than 100 billboard sites, on the back of more than 200 buses and in 20 bus shelters. It is estimated that more than one million Australians were exposed to the kids in cars advertisement. More than 10,000 posters have been distributed to child care centres, DOCS community service centres, shopping centres, police stations, schools and area health services. Widespread news media coverage appeared in the press and on television and radio across New South Wales. I thank the media for their support on this serious issue. The department is working to protect children and is using innovative ways to ensure that the community is aware of how easily children can be placed at risk. No errand, meeting or task is so important that parents should leave a child unattended in a car and endanger the child's wellbeing. Parents risk causing their child emotional distress or, more seriously, the child's health can be permanently or temporarily impaired.
WORKERS COMPENSATION LEGISLATION
Mr O'FARRELL: My question is directed to the honourable member for Swansea as the Chairman of the Public Bodies Review Committee. As WorkCover is a public body, does the honourable member unreservedly support the Premier's workers compensation legislation?
Mr SPEAKER: Order! I ask the honourable member for Swansea whether that matter is before the committee.
Mr ORKOPOULOS: No.
Mr O'Farrell: Point of order: Mr Speaker I ask you to cite for the House the standing order that states that the matter must be currently before the committee. If you cannot cite the standing order, the question must be answered.
Mr SPEAKER: Order! I call the honourable member for Lachlan to order for the second time.
NORTH COAST DISASTER RELIEF FUNDING
Mr NEWELL: My question without notice is addressed to the Minister for Public Works and Services. What is the latest situation regarding disaster relief funding to North Coast councils affected by floods and storms early this year?
Mr O'Farrell: Point of order: I refer you to Standing Order 136, which states:
A Member, being the Chairman of a committee, may be asked a question relating to the affairs of the committee.
It does not refer to matters immediately before the committee. My question related to WorkCover, which is a public body of this State. Therefore, the Chairman of the Public Bodies Review Committee should answer the question.
Mr SPEAKER: Order! I did not stop the honourable member for Swansea from answering the question. He has answered the question.
Mr O'Farrell: Point of order—
Mr SPEAKER: Order! Does the Deputy Leader of the Opposition intend to repeat the same point of order as the one I have already ruled on?
Mr O'Farrell: I am taking a different point of order, Mr Speaker. The honourable member for Swansea replied "No" to your question as to whether the matter was before the committee. He did not respond to the substantive matter I raised. I ask the honourable member for Swansea: What is so hard about saying whether or not he supports the legislation?
Mr SPEAKER: Order! There is no point of order.
Mr IEMMA: I thank the honourable member for Tweed for his question Mr SPEAKER: Order! I place the honourable member for Gosford on two calls to order. 14768 LEGISLATIVE ASSEMBLY 19 June 2001
Mr IEMMA: Everyone will recall the widespread devastation that hit the North Coast in January, February and March of this year. The occurrence of three natural disasters in such a short period stretched the resources of North Coast communities as well as the resources of all State Government agencies. At that time, the Government made a commitment to assist the communities of the North Coast to cope with the devastation that had been caused by those three natural disasters and moved quickly to establish the North Coast Regional Recovery Co-ordination Centre under the leadership of Brigadier Phillip McNamara, who was centred in Coffs Harbour, to work with shire councils, community groups and service providers to ensure that a better co- ordinated approach was taken to recovery in all the affected areas.
Regional recovery centres were also established in Kempsey and Grafton to act as one-stop shops in the provision of assistance and advice for the communities that were devastated by those three natural disasters. I am pleased to report to the House that the Government has lived up to the commitment it made to the communities of the North Coast. Today I provide information to the House on the first round of assistance to the councils of the North Coast for various projects designed to restore local infrastructure that has been either destroyed or damaged as a result of the floods and storms that hit in January, February and March. I am pleased to report that a cheque for $105,000 has been presented to the Clarence River County Council for repairs to the North Ulmurra levee. Mr Fraser: Point of order: The response being given by the Minister to this question was announced on the North Coast through the newspapers last Friday, which the Minister has not acknowledged. Every member in this House knows that. This answer is a waste of this House's time. Mr SPEAKER: Order! There is no point of order. Mr IEMMA: I am pleased to announce that the application of the Clarence River County Council for assistance to undertake further repairs to damaged levees, drains and floodgates has been approved and the council will receive a grant offer of $5.2 million to carry out further repair work to its essential local infrastructure. Mr George: What about Lismore? Mr IEMMA: I will come to Lismore in a moment. I am pleased to announce that the application of Grafton Council for $136,000 for repair work to council property that was damaged as a result of the storms and floods has been accepted by the State Government. The Richmond Valley council has been given a grant of $69,000 for repairs to stormwater outlets, drains and other local infrastructure facilities that were detailed in its application. In addition I am pleased to report that the Richmond Valley council received a cheque for $228,000 to reimburse it for removal of debris, restoration of parks and emergency repairs to the town's water supply and sewerage schemes. I am also pleased to announce approval of the application for assistance lodged by the Lismore City Council to the value of $239,000 to reimburse the council for the clean-up work involving trees, branches and debris as well as repairs to stormwater pipelines, the river wharf and other council parks' facilities, in addition to the art gallery, senior citizens centre, the tourist office and the council sports grounds. The application made by the Kyogle Council has been accepted for a grant of $63,000. The application by the Coffs Harbour City Council in the amount of $60,000 has also been approved. The Tweed Council's application for $146,000 for emergency works and clean-up works has also been approved. The application lodged by Ballina Shire Council for $89,000 for work to restore council property, such as footpaths and drains, that was damaged as a result of the storms has also been approved. An application by the Byron Shire Council to the value of $19,740 for similar repair work for its local infrastructure has also been approved. These grants represent the first lot of funding and the first round of cheques that will be given to councils on the North Coast to help them to repair and restore local infrastructure facilities that were damaged as a result of the three natural disasters to which I have referred. WORKERS COMPENSATION LEGISLATION Mr SPEAKER: Before calling on the honourable member for Myall Lakes to ask his question, I draw to the attention of the House, and particularly the Deputy Leader of the Opposition, the following ruling, which was delivered in 1926, relating to questions addressed to chairmen of select committees:
It is customary to allow questions to the Chairman of a Select Committee in reference to its business.
That is, the business that is before the committee. 19 June 2001 LEGISLATIVE ASSEMBLY 14769
Mr J. H. TURNER: My question is to the Minister for Small Business, and Minister for Tourism. Does she unreservedly support the Premier's proposed workers compensation legislation?
Ms NORI: Yes.
Mr SPEAKER: Order! The honourable member for Hornsby continues to interject. I remind him that he is on three calls to order.
Mr Armstrong: Point of order: In the tradition that you have established in this House, I ask you to welcome into the gallery those people who support the workers compensation legislation.
UNDER-AGE DRINKING
Mr STEWART: My question without notice is to the Minister for Gaming and Racing, and Minister Assisting the Premier on Hunter Development. What is the latest information on under-age drinking in New South Wales?
Mr FACE: The timely question asked by the honourable member for Bankstown highlights a serious community problem. To give the House some examples of the gravity of the situation, I will detail three recent cases of the supply of liquor to juveniles. The first occurred at the Doyalson-Wyee Returned Services League Club on the Central Coast. An under-18 soccer team was celebrating a competition win at the club. I emphasise that this was an under-18 team, so the management was fully aware of the age of the young team members and their friends. But what happened? According to police, members of the team were served with alcohol in such quantities that not only did they get drunk but one young girl was so violently ill that ambulance officers had to be called to treat her. The girl, who told police she was 17, said that she had been drinking tequila, alcoholic sodas and beer. To make matters worse, she collapsed in the car park and was found covered in vomit. She was lucky that the ambulance station was nearby and therefore she was able to be revived by ambulance officers; the cocktail of drinks could have been fatal.
The Licensing Court viewed this case so seriously that it disqualified the secretary-manager, Peter Foster, from holding office in a registered club for five years and imposed fines totalling $15,000. The honourable member for Swansea, to his credit, has expressed concerns about this incident. Club members voted out most of the directors of the club at their recent annual general meeting. However, sadly, that period of the club's history is under further investigation by officers of the Department of Gaming and Racing. In the second case, police patrolling in the vicinity of an under-age dance at Mona Vale noticed a group of youths near the Mac's Liquor Store. One of the youths, who later admitted he was only 16, purchased a bottle of vodka from the store which he and his three inmates intended to drink before the dance. What disturbs me about that case is that a 16-year-old boy was able to buy a bottle of alcohol, vodka, without being asked to show his ID. The offence resulted in a fine of $3,000.
The Junee Golf Club was recently fined $20,000 in the Licensing Court after police found minors were allowed into the club and several minors were served alcohol. The honourable member for Lachlan would be concerned, as I am, that the incident is not regarded as a reflection on the town of Junee. However, it continues a disturbing trend in some licensed premises where there is little regard for the law and, in particular, where simple steps are not being taken to stop minors accessing alcohol. In the Junee case, minors were at the club attending an eighteenth birthday party. Commonsense would suggest that it would be likely that minors would be at an eighteenth birthday party, but it appears that little effort was made to check for ID when these young people entered the club and purchased alcohol. I am very concerned about the continued sale of alcohol to minors.
I have had delivered to all liquor licence holders in the State an open letter expressing concern about a number of issues, among them the sale of liquor to minors. I would like to believe that, with the focus on liquor harm minimisation over the past five years, the sale of liquor to under-age people would be a thing of the past. However, as these cases show, it is still a real problem. Without reflecting on the case currently before the Coroner's Court in Melbourne, concerns have been raised about the availability of large bottles of alcohol-based food essences from licensed premises and the potential for minors to access these products and use them to produce alcoholic beverages.
In 1999 the Distilled Spirits Industry Council of Australia Inc. wrote to me, the Premier and the Treasurer. Hoyt's Essence was sold in Victoria in 375 millilitre bottles, but it cannot be sold in New South 14770 LEGISLATIVE ASSEMBLY 19 June 2001
Wales in that size bottles. The label lists alcohol as an ingredient. The essence is available in dark rum, sambuca, ouzo and vodka. A recipe sheet is available with the product. An analysis of the 375 millilitre dark rum essence found that it contained 64.8 per cent alcohol by volume. Action has been taken by the Director of Liquor and Gaming and the compliance branch to enforce a regulation to prevent the sale of this product in that size bottle. Unfortunately, to my knowledge the Australian Taxation Office has not made any headway in reviewing the excise on the products. However, the New South Wales Health Department has raised concerns.
The regulation I had drafted took effect in New South Wales last year. It provides that any product with an alcohol content which at 20 degrees Celsius contains more than 1.15 per cent ethanol by volume and is sold in containers larger than 50 millilitres—this would include the products I have just described—or 100 millilitres in the case of vanilla essence, comes within the definition of liquor for retail sales only in liquor shops. In other words, people will not be able to buy the products in grocery shops and supermarkets. Police had detected the 375 millilitre bottles of the products being sold in grocery shops and supermarkets. That is the type of product that has been lethal to a young person in Victoria.
As an indication of concern, at present we are working on an enforcement blitz at hotels, liquor stores and clubs involving licensing inspectors from the Department of Gaming and Racing and police with regard to the under-age drinking problem in the community and the issues I have just related to the House. I warn liquor licence holders that there will be no excuse whatsoever for serving young people on licensed premises or presiding over purchases by secondary persons. Take it as a warning: the sale or provision of alcohol to young people is just not on.
WORKERS COMPENSATION LEGISLATION
Mr HARTCHER: My question is directed to the Deputy Premier, Minister for Urban Affairs and Planning, Minister for Aboriginal Affairs, and Minister for Housing. Does he unreservedly support the Premier's proposed workers compensation legislation?
Mrs Chikarovski: "Yes" or "No."
Dr REFSHAUGE: It is interesting to see the Opposition trying to find a division where there is not one. There is no division on this side of politics. Look at the division on that side of politics. The Leader of the National Party may go in for a bit of duck shooting himself.
Mr SPEAKER: Order! I wish Ministers would sometimes take advice suggesting that they give a "Yes" or "No" answer. I place the honourable member for Pittwater on three calls to order, and ask other members to remain silent while the Deputy Premier is replying to the question.
Mrs Chikarovski: Point of order: The question clearly was whether the Deputy Premier supported Mr Carr's legislation or not. The answer is either "Yes" or "No."
Dr REFSHAUGE: There is a litany of division on the other side of the House. There will be no division on this side: we will all vote for the legislation.
AUSTRALIAN ROLL OF HONOUR OLYMPIC GAMES PUBLICATION
Ms ANDREWS: My question is to the Minister for Fair Trading, Minister for Corrective Services, and Minister for Sport and Recreation. What is the Government's response to the New Zealand company approaching Olympic and Paralympic volunteers and asking them to participate in a publishing effort?
Mr SPEAKER: Order! The Leader of the Opposition has asked a question. She will remain silent.
Mr WATKINS: I am concerned that a New Zealand publisher is trying to cash in on the achievements of the Olympic Games and the Paralympic Games. Everyone from athletes, administrators, volunteers—
Mr SPEAKER: Order! The honourable member for North Shore will remain silent.
Mr WATKINS: The Department of Fair Trading recently became aware that an organisation called the Australian Roll of Honour is offering to print biographical details of the Olympic and Paralympic participants in a new book. That would be a worthy and excellent project except that the company has an 19 June 2001 LEGISLATIVE ASSEMBLY 14771 appalling record with my department. Despite its name, the Australian Roll of Honour is based in New Zealand. It is a Vanity publisher that has generated a great number of consumer complaints in the past. I am concerned that up to 100,000 Olympic and Paralympic participants may now be receiving letters from the Australian Roll of Honour. This also includes volunteers and torch bearers.
The publisher is inviting these people to provide their details for a publication "They Carried the Flag: The Olympic Games 2000 and Paralympic Games 2000". This publication will cost $155 for a standard copy and up to $585 for the handmade leather edition. The catch is—and it is a big one—that the money must be paid in advance. If just 10,000 people subscribe to the cheapest edition, the publisher will collect $1.5 million of consumers' money. I am anxious about trusting this dubious organisation with so much cash because there is no guarantee the book will be delivered.
Vanity publications are printed only after they have been filled, and this can lead to publication delays of several years. The Australian Roll of Honour has claimed in the past that its books are stocked in libraries around the world. That is not true. Vanity publications are bought by people whose work is printed in them and often very few copies are produced. I warn Olympic and Paralympic volunteers or participants who may receive a letter from this organisation to be very wary of parting with any of their hard-earned money.
Questions without notice concluded.
BUSINESS OF THE HOUSE
Bills: Suspension of Standing and Sessional Orders
Mr WHELAN (Strathfield—Minister for Police) [6.10 p.m.]: I move:
That standing and sessional orders be suspended to allow the introduction and progress up to and including the Minister's second reading speech on the Workers Compensation Legislation Amendment Bill (No 2), notice of which was given this day for tomorrow, and the Health Care Liability Bill, forthwith .
Mr HARTCHER (Gosford) [6.10 p.m.]: What a day of cowardice we have had today! What a cowardly performance from members opposite, each and every one of them hiding from the picket line out the front of this building, led by their own Premier. The only way they could sneak into this House was by hiding behind the Minister for Police and 300 police officers. It took 300 police to get them into this Chamber! Every single one of them is a coward and every single one of them broke the picket line set up by the union movement in this State. They are a bunch of cowards. They now want to suspend standing and sessional orders so that legislation of which notice has only been given today can be placed before the House tonight.
Mr SPEAKER: Order! Government members will remain silent. Their interjections only antagonise the honourable member for Gosford.
Mr HARTCHER: Thank you, Mr Speaker, a wise ruling. Last night everyone knew there was going to be a blockade of the New South Wales Parliament today. Some members opposite stayed overnight so they would be here and would not have to face the blockade. That was the measure of their courage. I can name some of them. Others slunk over from Governor Macquarie Tower. They hid behind the police of this State and would not come into their own Parliament without a police escort. That is how brave they are. That is their relationship with the trade union movement in this State. Every single one of them was led by the Minister for Police—the workers' friend—the man who stands up for the workers of this State! When the Deputy Premier was asked whether he supported the workers compensation legislation he would not answer. The Leader of the Left of the Labor Party in this House would not answer whether or not he supported it! He simply said that everyone is bound by the caucus decision. That decision was 46 to 22—22 members of the caucus were true to their pledge; 43 signed that pledge but only 22 voted for the pledge in caucus. The rest of them turned dingo in the face of the Premier and put their own personal careers ahead of their pledge to the workers of this State. The workers of this State were outside this Parliament, and what did they do? They came in through a secret passage; they scurried like rats. Others came in behind a wall of police. When asked a question by the member for Swansea the Deputy Premier hid behind the standing orders. Mr SPEAKER: Order! The member will address the Chair rather than individual members. Mr HARTCHER: The Premier himself came in through the library; he scurried through the library. The Premier of New South Wales, unable to enter his own Parliament without coming in like a thief in the 14772 LEGISLATIVE ASSEMBLY 19 June 2001 night—unlike some other members. The Minister for Small Business now supports the legislation. Let it go on record that she stood up in this House and supported that legislation. You left winger! You hero of the left wing! The Minister for Small Business supported the legislation—a member of the Left of the Labor Party. She should tear up her trade union card, tear up her membership.
Ms Nori: I supported small business.
Mr HARTCHER: You left winger! Now they want to suspend standing and sessional orders to ram the legislation through the House tonight. Did the Premier introduce it? No, he would not have the courage to stand up in this House and introduce the legislation. He will give it to someone else to read because he does not have the courage. He is no longer called the Premier of New South Wales; he is called the coward Premier of New South Wales. He, in a most cowardly fashion, abandoned his responsibility to the New South Wales Parliament and to the people of this State. He knew there was a blockade, but took no action to prevent that blockade. For eight hours members of this House and staff were unable to gain access to Parliament because the Premier did not have the courage to ensure that the police had the appropriate authority to clear a passage. His colleagues are cowards and he is their leader: the hero of the cowards!
Motion agreed to.
WORKERS COMPENSATION LEGISLATION AMENDMENT BILL (NO 2)
Mr WHELAN (Strathfield—Minister for Police) [6.17 p.m.]: I move:
That leave be given to bring in a bill for an Act to amend the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998 to make further provision for claims procedures, dispute resolution, commutation, lump sum compensation and other matters; and for other purposes.
Mr Brogden: Point of order: It is my understanding that the Minister for Energy represents the Minister for Industrial Relations in this Chamber. As such I ask why on this occasion a left-wing member of the Ministry has excluded himself from the carriage of this bill. Is he scared?
Mr SPEAKER: Order! No point of order is involved.
Motion agreed to.
Bill introduced and read a first time.
Second Reading
Mr WHELAN (Strathfield—Minister for Police) [6.17 p.m.]: I move:
That this bill be now read a second time.
In March of this year the Government introduced the Workers Compensation Legislation Amendment Bill. The Government's primary objective in reforming the scheme is to prevent disputes arising and to provide a simpler, fairer, faster system for resolving disputes in the workers compensation system. The New South Wales Government remains firmly committed to this objective. The workers compensation scheme does not exist for politicians, for lawyers, or for doctors. It exists to compensate workers who have the misfortune of being injured at work. Employers are responsible for paying for those injuries through premiums. These are the key stakeholders in the scheme.
That said, the current scheme lets these stakeholders down. For employees there are too many disputes and too many delays in the system. Of all major claims, 45 per cent result in a dispute even though this is meant to be a no-fault system. As a consequence, injury management for workers is delayed, along with the payment of compensation. For employers, the high rate of disputes results in higher premiums. The Government is of the view that far too much of the premium collected is being spent resolving disputes.
When the Workers Compensation Legislation Amendment Bill was introduced the Government made clear its intention to consult with stakeholders, including the Workers Compensation and Workplace Occupational Health and Safety Council, and the Labor Council of New South Wales. I am pleased today to introduce the Workers Compensation Legislation Amendment Bill (No 2). The bill represents the outcome of 19 June 2001 LEGISLATIVE ASSEMBLY 14773 that consultation process. It achieves the Government's objective of ensuring a simpler and fairer dispute resolution system that protects the rights and entitlements of injured workers. The revised bill includes significant changes that have come out of the consultation process with the New South Wales Labor Council and employer groups.
The bill delivers an independent and transparent dispute resolution system. The original package of reforms gave considerable emphasis to reducing the number of disputes in the system because the current level of disputes is far too high. Unnecessary disputes divert premiums that should be paid as compensation to injured workers. This package of reforms provides for the establishment of a claims advisory service within WorkCover to provide assistance and advice to injured workers and employers on rights, responsibilities and obligations. It also provides for the introduction of provisional liability payments by insurers. Insurers will be required to start payments within seven days of being notified of an injury, unless they have a reasonable excuse. What constitutes a reasonable excuse will be set out in the WorkCover guidelines.
The intention of these proposals is to get limited benefit payments started to support injury management. It will also prevent unnecessary disputes arising in relation to small claims. These payments are generally made without any admission of liability. Although in some cases benefits may be paid where the insurer subsequently denies liabilities, the provisional payment of benefits will help reduce unnecessary disputes arising in the first place, resulting in overall savings for the scheme. The performance of insurers in implementing these arrangements will be closely monitored to ensure that the scheme's licensed insurers effectively implement the new provisional liability arrangements.
The bill also provides for a system of registration of commutation agreements without the need for court hearings in every case. The proposed new Workers Compensation Commission will carry out the registration function. Workers are protected through the requirement that independent legal advice be obtained before liability is commuted. A cooling-off period is also provided for, along with a capacity for the worker to request that the commutation agreement be reviewed by the commission to ensure that the agreement is adequate. The bill recognises that not all commutation matters require a hearing.
The bill also provides for the introduction of permanent impairment assessment guidelines. These guides will be used to assess the degree of permanent impairment of injured workers and will replace the existing table of disabilities in the Workers Compensation Act 1987. The introduction of impairment guidelines will ensure that workers who suffer a permanent injury have their injuries assessed in accordance with objective scientific evidence. The guides will ensure that workers with similar injuries are assessed in a consistent fashion.
The Government recognises that there is a need for locally developed guidelines to be used, rather than the guidelines issued by the American Medical Association [AMA]. During the consultation process a number of specific concerns were raised with the existing content of the AMA guides. There is a need for a comprehensive review of those guidelines before they are implemented, so that they can be adapted for Australian conditions. Accordingly, the bill now requires WorkCover to issue locally developed guidelines instead of relying exclusively on the AMA guides. Further, the bill provides that WorkCover must issue guidelines relating to the assessment of permanent impairment before the legislation can be commenced. The bill provides that the functions of the Workers Compensation and Workplace Occupational Health and Safety Council will be expanded to include consultation on the terms of the guides prior to their publication. In addition, the WorkCover guides will be disallowable by Parliament. This will ensure that there is appropriate parliamentary scrutiny of their content. Work on this review is well advanced. The Labor Council of New South Wales is closely involved in the review process for the development of the guides. Five working groups have been established to cover the most common conditions in workers compensation—lower extremities, upper extremities, nervous system, psychological injury and spine. The Labor Council has nominated medical practitioners to participate in these working groups. The other conditions will be addressed when this initial work is completed. In addition, a consistency group has been established to review the work of the working parties to ensure that the assessment of each of the body parts is consistent with all others. The Labor Council is also participating in this group. The Government remains firmly committed to this process, including the involvement of the Labor Council. The degree of permanent impairment of an injured worker as assessed under the guides is to be used to determine the amount of compensation for injured workers. The amount will be determined through formulas which will be prescribed by regulation. Until the guidelines are developed, a proper assessment cannot be made as to what compensation formulas are adequate. It is for this reason that the Government has decided to prescribe these formulas through delegated legislation. 14774 LEGISLATIVE ASSEMBLY 19 June 2001
The Government will consult with key stakeholders, including the Labor Council, on appropriate regulations under this provision, before commencing the legislation. In moving away from the table of disabilities to guides, a broader range of permanent impairments will now be compensated. The current table of disabilities with its focus on loss of body parts does not provide for compensation to a large number of impairments including damage to internal organs and psychological injury. For the first time, those permanent impairments not covered by the table of disabilities, which can have a significant, ongoing impact on the life of an injured worker, will be eligible for compensation.
I specifically draw attention to the proposed arrangements for compensating permanent impairments caused by psychological injuries. Under the current legislative scheme, a worker who suffers a permanent psychological impairment receives nothing in the way of permanent loss compensation. The worker only receives weekly benefits and medical expenses, but nothing for the ongoing impact on his or her life. These workers, who might include victims of violent assaults in the workplace or armed hold-ups, would presently be left to pursue damages under the common law system if they can demonstrate fault, with all the risks and costly legal fees that entails.
The bill allows workers who suffer a permanent psychological or psychiatric impairment arising directly from the workplace to be compensated with lump sum benefits. The provisions are limited to those suffering a primary psychological injury, that is, a psychological injury that arises directly from an event in the workplace—such as an armed hold-up or violent assault—rather than as a consequence of or secondary to a physical or other injury. Workers will need to show that they have a recognised psychological or psychiatric impairment. Further, the provisions will be subject to a threshold prescribed by regulations. The Government considers this to be necessary because of the difficulties associated with diagnosing and distinguishing work- related impairments and based on advice from experts in the field that minor psychological impairments are common and need not impact on a worker's capacity to continue in employment.
Many psychological impairments could be partly caused by a work-related incident, and at the same time be linked to the ordinary pressures of life. This threshold only applies to psychological or psychiatric impairments. For those who develop a so-called secondary psychological injury after a workplace accident—for example, depression following on from the inability to work caused by a back impairment—these factors can still be the subject of an award of pain and suffering compensation under section 67, subject to any threshold being met. Under section 67 of the Workers Compensation Act 1987 injured workers must show they have a table loss of at least 10 per cent in order to be eligible for no-fault pain and suffering compensation.
The Government is still considering its position on the appropriate impairment-based threshold to be applied in section 67. The bill now proposes that the threshold to gain access to section 67 compensation will be prescribed by regulation. The Government has previously proposed that impairment guidelines be used to determine eligibility to access common law. These proposals have been deferred pending the outcome of an inquiry by Justice Terry Sheahan of the Land and Environment Court. The inquiry commenced on 18 June and is due to report in August. The process of consultation with the Labor Council identified the need for a transparent and independent dispute resolution service to resolve disputes. The Government agrees and recognises that workers' rights need to be protected and enhanced. This includes not only the right to receive compensation but also the right to have disputes determined in a timely fashion and the right to have injuries managed in such a way as to facilitate prompt return to work.
The bill proposes to establish the Workers Compensation Commission to further enhance and protect workers' rights in the event that a dispute arises. Schedule 5 provides for the establishment of the Workers Compensation Commission. The new commission will be independent of and separate from WorkCover. A president, who will be an appointed judge, will head the commission. Two deputy presidents with legal qualifications will also be appointed, along with a registrar and arbitrators. The bill sets out the objectives of the commission. It is the Government's expectation that the commission will operate with due regard to these objectives. The objectives include the need for a fair and cost-effective system for the resolution of disputes, the need for workers entitlements to be paid promptly, and to provide an independent dispute resolution service.
The commission will have three distinct areas in which it will exercise its functions. First, proposed chapter 7, part 5 will be inserted into the Workplace Injury Management and Workers Compensation Act 1998 and will establish the expedited assessment jurisdiction of the commission. When a dispute relating to weekly benefits or medical expenses is referred to the commission for determination, the registrar will have the option of making interim payment orders under proposed division 2. The primary purpose of these provisions in the case of weekly benefit disputes is to get payments started to facilitate injury management, while waiting for the 19 June 2001 LEGISLATIVE ASSEMBLY 14775 full dispute to be determined. There is a clear presumption in favour of payment in many cases. The making of such an order is an administrative function and will, in most cases, not require a conference with the parties subject to any procedural fairness requirements being otherwise met.
Similarly, the bill provides for expedited assessment of medical expense disputes. This will enable small disputes concerning medical claims to be dealt with in a timely manner, particularly where early consideration will assist with injury management or relieve significant pain or discomfort. Disputes relating to urgent medical treatment can also be dealt with in this forum. If the registrar declines to make an order for medical expenses, then the worker will be able to have the full claim arbitrated.
The bill also establishes an expedited assessment service to deal with disputes relating to suitable duties and obligations under injury management plans. Employers have obligations under the Act to provide suitable work for injured workers. Workers have an obligation to return to work as soon as it is safe for them to do so. Consultation with unions identified a need for a more formal and timely structure to deal with disputes that arise in this area. Although at the moment such disputes could be dealt with through the Compensation Court, hearings occur too late in the day, often at a point where the employment relationship has completely broken down.
The bill therefore provides for early conciliation of these disputes by the registrar—and through delegated staff within the commission. It is the Government's intention that this will occur as soon as possible after the dispute is filed with the commission. The registrar will have broad powers to call on the Claims Advisory Service and injury management consultants to assist in resolving disputes. If the matter cannot be resolved through conciliation, the registrar will be able to make recommendations to the parties to assist with meeting injury management obligations. The parties will have 14 days to comply with the recommendation, or to seek a review by an arbitrator. The arbitrator will then have the power to vary or confirm the recommendations of the registrar. The decisions of the arbitrators will then be binding, subject to appeal rights.
Proposed part 7 of chapter 7 will establish a system of medical assessment, through which arbitrators will be able to obtain advice on medical questions arising in the course of proceedings. The bill modifies the existing system of approved medical specialists provided for under the 1998 Act for this purpose. The registrar or an arbitrator in proceedings will be able to refer medical questions to approved medical specialists for consideration and advice. For most medical questions, that advice will be prima facie evidence in any proceedings before the arbitrator. The arbitrator would be free to depart from the advice where they have clear and cogent reasons for doing so. Given that eminent medical specialists will be appointed as approved medical specialists, it is expected that in most cases the arbitrator will give substantial weight to the advice of the approved medical specialist.
Where the medical question in dispute concerns permanent impairment of an injured worker— including hearing loss—the opinion of the approved medical specialist will be conclusive evidence, and cannot be overturned or challenged by an arbitrator in subsequent proceedings. Obviously in some cases mistakes or errors may be made. It is for this reason that the bill provides a right of appeal against a conclusive permanent impairment certificate to a panel consisting of two approved medical specialists, and an arbitrator. The panel will take submissions from the parties and review the original decision, with the possibility of conducting further medical examination. The role of the arbitrator will be limited to ensuring procedural fairness given that most issues arising in appeals will call for the exercise of medical judgement and expertise.
The bill carefully and closely confines the grounds of appeal. Appeals will be allowed where there has been a deterioration in the worker's condition, additional information has become available—that could not have been obtained before the original hearing—the assessment was made on the basis of incorrect criteria, or the certificate contains a demonstrable error. A demonstrable error would essentially be an error for which there is no information or material to support the finding made—rather than a difference of opinion. It should also be noted that the appeal on the grounds of incorrect criteria does not allow appeals to challenge or overturn the guidelines. It is designed to cover circumstances where the guides themselves have been incorrectly applied. The bill also includes numerous protections to ensure that the parties are afforded procedural fairness. This includes notification of a proposed referral of a medical question, and requirements for detailed reasons to be given in support of certificates.
The third arm of the commission will deal with, and determine, the overwhelming majority of disputes presenting to the commission. The bill provides for the appointment of arbitrators who will be responsible for conciliating and arbitrating disputes. Arbitrators will have a broad range of powers that can be exercised in 14776 LEGISLATIVE ASSEMBLY 19 June 2001 seeking to resolve matters. This includes the power to order the production of documents, and to require the attendance of witnesses at hearings. Although many matters will be dealt with through a formal arbitration hearing, draft section 354 of the bill also provides that proceedings are to be conducted with as little formality and technicality as the proper consideration of the matter permits. It is also the intention that a less adversarial approach be used by arbitrators as reflected in section 354. The bill provides flexibility so that less structured, but more interventionist, processes can be used by arbitrators to resolve disputes. Arbitrators will be required to issue a certificate setting out their reasons for decision. Parties will then have 28 days in which to lodge an appeal to a presidential member of the commission. The presidential member will have a broad discretion to decide whether to grant leave to appeal. In cases where less than $5,000 is in dispute, or the amount in dispute is less than 20 per cent of the amount awarded, leave cannot be granted. This is aimed at ensuring that only significant disputes can be appealed and that appeals do not become routine. Appeals will proceed by way of a review of the original decision. The presidential member will be able to grant leave to have new evidence admitted, however, in general it is anticipated that the matter will be determined without the need for a full rehearing. It is important to remember that because of draft section 341 workers will generally not be subject to adverse cost orders where they commence proceedings, unless those proceedings are frivolous or vexatious. There is a need for incentives to ensure that appeals are not routinely taken in an effort to increase the amount of compensation. Therefore, if the extra amount awarded following appeal by the commission is less than $5,000, or is less than 20 per cent of the amount awarded, the solicitor for the injured worker will not be entitled to a costs award from the commission. The solicitor would also generally be prevented from recovering from the worker without an order from the commission. This cost sanction is broadly similar to principles used in the District Court arbitration system, which assists to discourage unnecessary appeals. Decisions of the presidential members of the commission will be appealable to the Court of Appeal on points of law. Preventing disputes arising in the first place and reforming the dispute resolution system to solve the disputes that do arise, are essential in making sure that the scheme achieves its objectives of delivering benefits promptly, and making sure that injury management is effective. This bill will reduce scheme costs, because simpler and faster resolution of disputes will eliminate unnecessary processing. This will reduce pressure on premiums for employers and control the scheme's deficit. The package of reforms is not solely about money. Workers' rights need to be protected through an independent and transparent dispute resolution system. This bill does that. I commend the bill to the House. Mr HARTCHER: I seek leave to move that standing and sessional orders be suspended to permit the moving forthwith of an amendment to the second reading, to postpone the debate for one week, until 26 June 2001. Mrs Chikarovski: Point of order: I seek an assurance from the Leader of the House that, in accordance with Standing Order 198 (11), debate on this bill will be adjourned for five clear days, so that the debate will not resume before Tuesday of next week. This is a substantial bill. The Opposition has only just received a copy of it. Mr SPEAKER: Order! There is no point of order, but I will allow the Leader of the Opposition to express an opinion. Mrs Chikarovski: I would like from the Leader of the House an assurance that honourable members will be allowed five clear days to examine and consult on this bill before resumption of the debate. This is substantial legislation. We have only just received a copy of it; it has only just been tabled in the House. We need to know that the Leader of the House is prepared to allow proper consultation and review of this legislation, so that when the bill again comes before the House all members of the House are fully informed of all views. It is totally inappropriate for the Government to ram this legislation through and not allow any consultation. This afternoon on the radio the Premier said he will not ram the bill through the House today. I would like to know from the Leader of the House that it will not be pushed through the House this week. I ask him to allow us—in accordance with the standing orders that you so often uphold with such respect, Mr Speaker—five clear days. It is not much to ask. It is a commitment the Leader of the House can give. We respect him as a man of his word. If he tells the House today that he will allow the five clear days, we will take that as an assurance that there will be appropriate time to consult fully on this bill. This is significant legislation for the people of New South Wales. He should allow us the time to consult. Leave not granted. 19 June 2001 LEGISLATIVE ASSEMBLY 14777
Mr HARTCHER (Gosford) [6.41 p.m.]: I move:
That this debate be adjourned until 26 June 2001.
Mr SPEAKER: Order! I have been advised by the Clerk that the motion moved by the honourable member for Gosford is contrary to Standing Order 92. I remind the House that Acting-Speaker Bruxner ruled that a member may move only that the debate be adjourned, not that it be adjourned to a certain date. That ruling appears in Hansard of 4 March 1970 at page 3851. I rule the motion out of order.
Mrs Chikarovski: Point of order: On that basis I ask that you ask the Leader of the House when this matter will be brought on for debate so the Opposition can have some idea how quickly this will be rammed through the House.
Mr SPEAKER: Order! The Leader of the Opposition will resume her seat.
Debate adjourned on motion by Mr Thompson.
HEALTH CARE LIABILITY BILL
Bill introduced and read a first time.
Second Reading
Mr KNOWLES (Macquarie Fields—Minister for Health) [6.43 p.m.]: I move:
That this bill be now read a second time.
In introducing the Health Care Liability Bill, I wish to make some general preliminary remarks by way of background before addressing the detail of the bill. When the representatives of United Medical Protection [UMP] advised its membership late last year that premiums for medical indemnity cover would rise by 8 per cent and that a further call, the equivalent of a full year's additional premium, was to be paid either as a lump sum or in instalments over five years, doctors ranging from non-procedural general practitioners to specialists working in high-risk areas were both dismayed and angered. Their dismay and anger is understandable, because prior to UMP's announcement, it is clear that doctors were being advised by UMP that no such impost would occur. UMP has advised that the call was prompted by a significant revision upwards of its claims cost exposure for outstanding claims and a significant increase in the number of new claims.
Since UMP's announcement last year, the medical profession has been in turmoil. The high cost associated with medical indemnity premium increases, effectively adding a 20 per cent increase each year for the next five years, is further compounded by the uncertainty as to whether UMP will be required to make further calls on its members in future years. In New South Wales, United Medical Protection is a near monopoly provider. UMP is a discretionary mutual with a captive insurance company called AMIL Through AMIL, UMP provides insurance cover to a majority of its members on a claims-made basis up to $5 million per annum. Payments in excess of $5 million are discretionary. An indeterminate number of doctors, including some regarded as poor risks, are covered only on a discretionary basis.
This means that UMP, like other medical defence organisations, manifests itself in large part as a self- regulating club rather than an insurance company that is subject to prudential regulation and scrutiny by the Australian Pricing and Regulatory Authority [APRA]. Because of what seems to be historical practice, and unlike some other medical defence organisations, United Medical Protection does not fully bring to account as a liability that part of its exposure and potential liability under its discretionary arrangements, similar to what is known in the industry as IBNR's—claims incurred but not reported. These matters may relate to incidents going back 20 years. If they are not transparently accounted for and acknowledged by the UMP board as a potential liability, is it any wonder that organisations such as the Australian Medical Association [AMA], governments, individual professional medical associations and colleges have been demanding a full and open inquiry into the activities of the medical defence organisation and its true financial position?
As part of the Government's bill which I will detail shortly, the Government will require UMP, and indeed any indemnity organisation operating in New South Wales, to be more transparent and more accountable not only to its membership but to the people of New South Wales. I consider it to be entirely appropriate that I use this opportunity to call on other jurisdictions in Australia to do exactly the same thing. Frankly, calls that 14778 LEGISLATIVE ASSEMBLY 19 June 2001 there is a crisis in medical negligence are not new. In November 1995 the Commonwealth Government released the Tito report regarding compensation and professional indemnity in health care. Much of Fiona Tito's report remains relevant today. For example, issues such as structured settlements for the catastrophically injured are still unresolved and remain as urgent today as they were in 1995. The Commonwealth must inevitably act to provide relief in this regard. It simply needs to clarify a tax law.
Equally, issues around law reform, compulsory insurance, improvement in quality and risk minimisation and greater transparency within medical defence organisations remain. However, until last year's dramatic events the indemnity landscape was relatively calm. Whilst premiums were growing, particularly for higher risk groups, most States and Territories, including New South Wales, had developed strategies of one form or another to assist these more high-risk specialty areas. For example, in 1999 in New South Wales the Government's Treasury-managed fund [TMF] liability arrangements were extended to underpin the work of sessionally paid obstetricians for their services to public patients in the public hospital system. The cost, including for reinsurance, of providing this cover, has escalated to a current cost of $24 million for the year commencing February 2001.
Further increases in this cost are anticipated well above CPI because of the cost of claims and attendant reinsurance costs in the obstetric area. It is important to note that this multimillion dollar taxpayer funded cover was provided on the understanding that it would control the growth in obstetrics premium payments. Two years later, the growth in obstetrics premiums continues unchecked. The passage of this legislation will not change the Government's commitment to the TMF coverage for sessionally paid obstetricians. However, as the Chairman of the New South Wales Medical Services Committee explains in his correspondence to me:
The injection of expenditure of even very large sums of money by Government to subsidise indemnity insurance for medical practitioners, either directly or indirectly, would, at best, only have very short term benefit and in the medium and long term such an injection of funds would escalate costs and the consequence of those rising costs. In other words, simply picking up the tab and paying the doctors premiums at the taxpayers direct expense will not work. More fundamental tort law and industry reform are required. Another contributing factor to escalating premiums is the recent trend that has seen the unravelling of the traditional cross-subsidy that exists between low-risk and high-risk medical practice. Traditionally, the premiums of the relatively small number of doctors practising high-risk specialties such as obstetrics and neurosurgery have been supported by inflating the premium payments made by the lower risk end of medicine—for example, non-procedural practitioners. While such practices may not be fashionable in an era of economic rationalism, they have had the desirable effect of constraining costs of high-risk services, effectively keeping services like obstetrics and neurosurgery available in our health system. If the cross-subsidy did not exist, actuarial analysis makes it clear that a typical obstetrician or neurosurgeon would simply be unable to afford to pay their premiums, estimated by UMP to be in excess of $200,000 per annum for neurosurgeons—in other words, wiping out all but the most lucrative practices in the busiest parts of the State and, without any doubt whatsoever, removing obstetric services and neurosurgery services from large parts of metropolitan Sydney and everywhere in rural and regional New South Wales. Such an outcome from unravelling the cross-subsidy is unthinkable and totally unacceptable to the general community, yet there is clear evidence that it is happening. For example, last Friday I received advice that one regional New South Wales obstetrician was recently quoted in excess of $132,000 for his indemnity cover. Some indemnity providers have effectively gained New South Wales market share by focusing on the low-risk, shorter claims tail end of the market forcing retreat from the practice of cross-subsidisation and effectively exposing the high-risk, longer claims tail specialties to higher premiums and, as a consequence, the community to the real risk of a total reduction in health services. The combination of those two facts—the sharp increase in premium payments and the 100 per cent call, together with the cherry picking and consequent unravelling of the cross-subsidy—means that the Government will act to protect the community by establishing a stronger regulatory framework around the medical insurance and indemnity industry in New South Wales. Since November last year every rural, regional, metropolitan and national media outlet has carried stories about the medical indemnity crisis. In the overwhelming majority of cases that have been reported the Government is satisfied that the concerns are real. I can table literally hundreds of press clippings, media statements and items of correspondence which detail the distress of communities as diverse as Mudgee and Marrickville, Cowra and Coonamble, Tamworth and Tweed, Murwillumbah and Mullumbimby, Glen Innes and Gunnedah, and Nyngan and Nowra, to name just a few, as their doctors alerted their communities about their inability to continue practising unless there was major structural reform to the circumstances surrounding medical negligence claims. 19 June 2001 LEGISLATIVE ASSEMBLY 14779
What is more distressing are the several dozen letters of resignation that I have received from country doctors who presently operate in our public hospital system. If anyone believes that this is just an Australian Medical Association [AMA] beat-up, although some claims fall into that end of the spectrum, they need only read the clippings or understand that the doctors who tendered their resignations are deadly serious. The challenge for this Parliament is to determine whether we can unite to protect communities, especially country communities, by maintaining the medical services they presently receive.
The fact that the Government announced a substantial package of reform to medical negligence, which is now reflected in this bill, has seen all doctors who tendered their resignations withdraw them. All the doctors who walked off the wards have returned on the understanding that the Government has a package that deals with their needs. They expect the Parliament to give it support. If not, I expect that they will resign, and this time they are unlikely to return. As many members in this Chamber have identified as they represent their constituencies—I point out that many of them are members of the National Party in rural electorates—they want their doctors and they want the Parliament to do what is necessary to underpin those services. Importantly, the doctors want the package too. For example, Dr D. J. Browning, an obstetrician and gynaecologist, wrote to me on 13 March stating:
I should like to take this opportunity of applauding your initiative in the reform of medical litigation.
Dr David Molloy, Chairman of the National Association of Specialist Obstetricians and Gynaecologists, wrote on 25 May:
Well done, on the initiatives that the New South Wales government is taking in the difficult area of Medical Defence Reform. Even the President of the New South Wales branch of the AMA, Dr Michael Ridley, in his monthly column in the May edition of the AMA's journal, The NSW Doctor, stated:
The AMA (New South Wales) is delighted that the Minister for Health has taken the bit between his teeth and introduced the Bill to Tort Law Reform to the Parliament.
Even Kerryn Phelps, the Federal AMA President, in a letter dated 27 February this year, stated:
The Association is very encouraged that the NSW Government is now actively pursuing this goal … In this context the AMA strongly supports the NSW proposal. Finally, Dr Michael Hollands, the Chairman of the Committee of Chairmen, New South Wales State Committees of Medical Colleges, on 27 February, wrote:
We have considered the package proposal. It sounds a very positive contribution and hopefully will lead to reduce premiums. It is important to note that Dr Hollands refers to the plural "we", because that committee represents a tremendous range of colleges, including the Royal Australian College of Surgeons, the Royal Australian and New Zealand College of Obstetricians and Gynaecologists and the Royal Australian College of Physicians, including the Division of Paediatrics. However, it is also fair to point out that some parts of the medical profession are not satisfied with the extent of the bill. Some say that we do not go far enough. For example, some members of the medical profession want me to establish a regime in which, in cases of negligence, they do not wish to be judged by the court system but by their peers. That is not acceptable to the Government because it is not acceptable to the community. It can be dealt with in one word: Chelmsford. Back then, peers of the Chelmsford practitioners regarded deep sleep therapy as acceptable practice. Equally, some doctors simply want the State Government to pay for their insurance premiums. They say that this occurs in other States, but what they do not say is that where such arrangements exist in other States they exist on the basis that other doctors are part-time employees of the public health system and not visiting medical officers [VMO], that is, independent contractors, as is the case in New South Wales. The fact is that all staff specialists in New South Wales, that is, employed senior specialists, have their public practices covered by the State. Historically, VMOs, as independent contractors to the public health system, have paid their own indemnity cover, as is obviously the case for any other contractor in any other industry sector. I can advise the House that offers have been made to various specialty groups for them to change their status from contractor to employee. Those offers have been rejected, usually on the grounds of the doctors' desire to maintain their independence and autonomy, and the higher rates of VMOs. As one doctor in Tamworth made clear to me:
I want my cake and eat it too. In other words, he does not want to be part of the system as an employee but he wants the Government to pick up the tab as if he were. Equally, that position is unacceptable to the Government because it is unacceptable to 14780 LEGISLATIVE ASSEMBLY 19 June 2001 the community. There are those who say simply extend the Treasury managed fund beyond the present cover for sessionally paid obstetricians. This option is simply unsustainable, as evidenced in my earlier remarks and by the comments I referred to earlier by the Chairman of the New South Wales Medical Services Committee, Professor Geoff Duggin. Yet that is an option that the New South Wales Opposition seems determined to pursue. There are any number of public statements that I am willing to table in which the Opposition leader has been willing to commit between 1 per cent and 2 per cent of the New South Wales health budget—somewhere between $77 million and $154 million—to pick up the tab for doctors. Given the evidence of Professor Duggin and others, such a position lacks credibility and is hardly worth mentioning, other than to note the fact that it totally avoids the real issues around the shape and nature of the industry, the law and practice improvement.
Finally, there are those in the medical profession who object to the bill because it requires compulsory insurance. In this day and age there is absolutely no justification for a doctor not to carry professional indemnity cover. Going bare, as occurs in a very small minority of cases, will no longer be acceptable in this State. Consumers will be fully protected. The Government intends to legislate, by way of this bill, to make professional indemnity insurance a condition of registration. The Medical Board will have the power to suspend a doctor if it is satisfied that he or she does not have the requisite professional indemnity insurance cover. Practising without insurance will be unsatisfactory professional conduct. Other States such as Victoria have already introduced similar requirements. The Government makes this requirement because it is what the community expects.
I now turn to the detail of the bill. The Health Care Liability Bill introduces a legislative reform package relating to compensable personal injuries claims arising from the provision of hospital and medical care. The package is aimed at facilitating access to fair and sustainable compensation by consumers, reasonable distribution of costs of compensation for the severely injured across the medical indemnity industry, sustainability of medical indemnity costs, orderly and sustainable growth in claims, continued provision of a full range of specialist medical services to the New South Wales community, and a community that is better informed about the cost and developing trends in health care personal injury claims. The Attorney General and I, through our respective departments, have collaborated closely on the review of health care liability issues and the development of the bill.
The review of health care liability involved, in its early stages, a public call for submissions and, in its later stages, debate and discussion in the forum of a reference group of relevant stakeholders and experts, including legal, actuarial and industry expertise. The need for the introduction of the reform package has arisen as a consequence of escalating medical indemnity premiums. This has been caused by a number of factors: the increasing size of medical negligence claims, particularly the larger claims; the need for some medical indemnity organisations to build reserves to meet unfunded liabilities incurred in past years but not yet reported as claims; and the development of the practice within the medical indemnity industry of risk rating by specialty groups and consequently the setting of differential premiums based upon those ratings. These factors have, in turn, contributed over the last decade to escalating indemnity premiums, which are becoming unsustainable for some medical groups, such as specialist obstetricians, general practice obstetricians and neurosurgeons.
The bill introduces a sensible and balanced set of measures. While part 2 of the bill limits indemnity costs for providers of certain hospital and medical services and their insurers, this is counterbalanced by strong public interest offsets for consumers in part 3 and the much-improved prospect that the community will continue to receive a full range of specialist services. Part 1 sets out the objects of the bill and the relevant definitions. Clause 3 makes clear that the bill seeks to achieve significant cost containment through limitations on damages for non-economic loss, commonly referred to as general damages, for less serious claims while preserving principles of full compensation for the care of the severely injured. Part 2 of the bill introduces a number of measures aimed at restoring sustainable indemnity costs through reform of the law on damages as it relates to health care personal injury claims.
In the interests of both the medical profession and the community, part 3 establishes a regulatory scheme requiring doctors to be insured, approving the type of insurance they are to have and setting conditions with which medical indemnity insurers must comply. Part 2 will apply only to fault-based personal injury actions that arise from the provision of health care by certain health care providers. These include medical practitioners, who have approved professional indemnity insurance, and public health organisations, which are the major employers of medical practitioners in their public hospitals and other facilities. The practice company structure is commonly used by medical practitioners to conduct their individual private practices and is to be included within the definition of "medical practitioner". It is intended to cover the situation of the doctor who conducts his or her practice through a practice company structure. 19 June 2001 LEGISLATIVE ASSEMBLY 14781
Damages awarded in claims against those doctors who are covered by professional indemnity insurance will be subject to the limitations on damages under part 2. Once part 3 of the bill commences, limitations will apply to claims against currently practising doctors who have approved professional indemnity insurance. Medical indemnity companies indemnify both currently practising doctors and those doctors who have retired or who have otherwise ceased to practise at the time a claim is brought against them. As one of the primary objects of this bill is to keep the costs of medical indemnity sustainable, part 2 will also apply to claims against doctors who have retired or who have otherwise ceased to practise, provided that they are indemnified under a professional indemnity insurance arrangement in respect of the relevant injury or death.
However, the bill is not intended to apply to the damages liabilities of the larger entrepreneurial medical service corporations who may employ or otherwise contract with a number of doctors for the purpose of carrying on their business. Nor is the bill intended to apply to corporations that are not in the business of providing medical or related services and that happen to employ doctors for purposes such as attendance on staff. These corporations are well able to cover their insurance costs as part of their overall commercial operations and pricing structures. Implementation of the legislation will be carefully monitored to identify any attempt by large commercial corporations to exploit the definition of "practice company" in order to bring themselves within the definition of "health service provider". Other public liability claims, such as slip and fall cases arising from occupiers' liability, will not be covered by the bill; hence health service providers will not be placed in a preferential position vis-à-vis other owners or occupiers of premises. Damages awards made under the Fair Trading Act 1987 or the Anti-Discrimination Act 1977 and workers or victims compensation will be unaffected by the bill.
Pursuant to clause 5(3) of the bill, part 2 will not apply to legal claims where legal proceedings have already been initiated before the commencement of the legislation. It will, however, under clause 5(2) apply to claims in respect of personal injuries, whether sustained before or after the commencement of part 2. This is necessary if the reform package is to have an impact in the shorter term on the cost of indemnity cover. Claims experience in the health care area indicates that significant time elapses between the time of injury and the time a claim for compensation is made. This is particularly so in the case of large claims. For example, in a severe birthing injury, it is not unusual for the injured person to have attained his or her majority before he or she makes a claim. If part 2 of the bill were not applied to existing injuries when no claim has yet been initiated, the impact of the legislation on indemnity costs would be delayed for some years.
The actuarial assessment commissioned by the Department of Health estimates that applying the bill only to injuries occurring after its commencement will defer any significant savings from the introduction of the threshold and assessment table for non-economic loss for 12 to 18 months, and any significant savings from the changes to the discount rate and interest on damages for five years or more. Such delays are clearly untenable if the current medical indemnity crisis is to be effectively addressed. Immediate cost containment and the direction of that saving to support indemnity cover for the higher risk specialties is necessary in order to stem the drain of practitioners from these high-risk areas of practice and ensure the future supply of these essential specialist services to the whole community. Clause 6 also contains the power to prescribe awards of damages to which part or all of part 2 is not to apply. The implementation of the legislation will be carefully monitored and any unintended or inappropriate application of part 2 will be addressed through this regulation-making power. Clause 9 of the bill will fix the maximum weekly rate for damages for loss of earnings at net $2,603, which is the rate applicable under the motor accidents scheme. This weekly cap will be indexed in line with the mechanism applying under the motor accidents scheme. The fixing of this rate will strike a balance between certainty for the medical indemnity industry and the rights of consumers of health care who sustain compensable injuries. Clause 10 is intended to remove the speculative element of future loss of earnings claims by having those damages determined strictly in accordance with the most likely future prospects of a plaintiff before the injury. It is noted that in a minority of cases involving claimants with very high incomes, those with net earnings of over $2,603 per week, this measure will result in an overall reduction in the amount of damages that those claimants can receive. However, high-income earners are far better placed than is the average person to protect their income through insurance and other measures. Members will be aware that when awarding lump sum damages to a plaintiff to compensate him or her for future losses, the court discounts that lump sum. This discount is calculated for the relevant future period in recognition of the fact that the plaintiff has the immediate benefit of the lump sum and can invest it and earn a return over that period. The discount rate on lump sum damages applying under both the motor accidents and workers compensation schemes is 5 per cent. This is 2 per cent higher than the discount rate applying at common law. 14782 LEGISLATIVE ASSEMBLY 19 June 2001
Furthermore, where discount rates for common law actions have been set by statute in other Australian jurisdictions, I am advised they have ranged from 5 per cent to 7 per cent. Accordingly, under clause 11 of the bill it is proposed to bring the discount rate for medical and hospital claims into line with the rate applying under those New South Wales statutory schemes, that is, 5 per cent. The care burden placed upon relatives by a severely injured family member is recognised in damages awards. The bill retains compensation for gratuitous attendant care and has not sought to introduce a cap on the level of damages that can be awarded for these services. It does seek, however, to better clarify what gratuitous attendant care should be compensable. Clause 12 of the bill provides that domestic, nursing or other gratuitous attendant care services that are intended to alleviate the consequences of an injury are not compensable unless the court is satisfied that they are reasonably necessary; that the need for them has arisen solely because of the injury; and that they would not have been provided to the claimants but for the injury to which the claim relates. The intention of clause 12 is to ensure that damages awards are not inappropriately inflated by including compensation for what is merely an incident of an ongoing family relationship. The fact that a husband or teenager now does half the washing up or helps around the house should not attract a claim for thousands of dollars in compensation. Such household contributions are, in this day and age, part of the mutual give and take of any family relationship. While in the interests of the severely injured and their families the bill has placed no monetary cap or threshold on damages for gratuitous attendant care, commonsense and restraint should prevail in determining what gratuitous services should be compensated. The bill will also introduce reforms to the area of non-economic loss, or general damages. Damages for non-economic loss, although by their nature intangible, recognise the temporary or permanent loss of amenity of life of the injured plaintiff. Where statutory limits on such damages have been introduced, they have been aimed at reducing the inappropriate growth in this component of damages awards. Notwithstanding the intangible nature of non-economic loss damages, there should be some consistency in their award. The bill will achieve this by fixing the maximum non-economic loss damages for the most serious cases at $350,000, which it is broadly agreed is around the current maximum for a most extreme case. Under clause 14 this figure will be approximately indexed to ensure fairness to plaintiffs while providing certainty to indemnity organisations. Under clause 13 the maximum non-economic loss damages that may be awarded is only to apply in a most extreme case to ensure that smaller claims do not grow disproportionately and approach the maximum level. Clause 13 of the bill also introduces a threshold of severity in terms of non-economic loss, relative to a most extreme case, which a claim must reach before non-economic loss damages may be awarded. If a case achieves this threshold of 15 per cent severity, non-economic loss damages are to be awarded in accordance with an assessment table based on section 79A of the Motor Accidents Act 1988. This involves a sliding scale for the assessment of non-economic loss for the less serious cases, being those cases in which the severity of the non-economic loss is assessed as between 15 per cent and 32 per cent of a most extreme case. Where the severity of the non-economic loss is assessed as above 32 per cent severity, the plaintiff will receive the full proportion of non-economic loss relative to a most extreme case. Scaling down in the lower range but above the threshold has been introduced for two reasons. First, it will achieve a saving that can be redirected to sustain the compensation costs for the severely injured. Secondly, it will offset some of the upward creep that inevitably occurs in assessing the severity of claims when a threshold for non-economic loss is introduced, as was the experience in the motor accidents scheme. Whilst clause 13 does substantially affect the compensation entitlements of those with less serious injuries in an effort to contain the overall costs of medical indemnity, it has been done with the overall intention of preserving full compensation, including the very significant costs of care, for the severely injured. The actuarial assessment of this measure is in the order of a saving of 6 per cent in incurred costs for damages and 4.2 per cent in incurred costs for legal costs, a significant amount that can be redirected to sustain the escalating costs of compensation for the severely injured. The types of cases affected by the introduction of the threshold would include claims for non-economic loss for light scarring or for repairable dental damage when inserting anaesthetic equipment. Claims for non- economic loss where post-operative recovery has been less than smooth or where there has been a failure to identify a foreign body, provided there is no lasting impairment, would also be likely to fall below the 15 per cent threshold. The types of cases that may be subject to a discount in respect of non-economic loss because they fall in the 15 per cent to 32 per cent range will include those cases involving less severe, but ongoing, impairment such as a misaligned fracture that compromises movement to some degree or nerve damage of a less serious nature during surgery. More severe scarring cases may also fall within this range, although it is noted that in cosmetic surgery and other cases, depending upon the representations made to the patient before surgery, a fair trading claim may also be available. Furthermore, those who are most seriously injured will not be affected by these changes. 19 June 2001 LEGISLATIVE ASSEMBLY 14783
Clause 15 provides that no interest is payable on non-economic loss damages. This is similar to the provisions of the motor accidents compensation scheme. The rationale is that non-economic loss damages provide compensation for a loss, which has no "real and direct" monetary value, and hence awards of interest on such amounts are not warranted. While reforms to the law of non-economic loss, or general damages, might reduce the amount of compensation available to some injured plaintiffs, it is important to note that these damages are not compensating plaintiffs for any actual financial loss. If a court determines in any particular case that interest is payable on damages for economic loss up to judgment, it is to apply the principles for the calculation of interest ordinarily applied in any personal injury claim, with the exception of the actual rate of interest.
For example, under these well-established principles a court cannot give interest upon interest. While some damages for economic loss may be referable to the whole period from the date the cause of action arose to the date of judgment, other damages for economic loss will be referable to only part of that period. Accordingly, as with the motor accidents scheme, where a court is satisfied interest is payable on any damages for economic loss, it is to be calculated from the time when the loss to which the damages relate is first incurred until the date of determination.
Clause 15 (3) of the bill specifies the relevant rate of interest as the Commonwealth Government 10- year benchmark bond rate applying on the first business day of January or July in each year, or another prescribed rate. This rate will be applied for the relevant six-month period in which the date of determination falls. This provides for an interest rate on relevant damages which is referable to a prevailing market rate for conservative risk-free investments, achieves some further reduction in incurred costs and is simple to administer. As with the motor accidents scheme, clause 16 enables damages in a health care claim under the Compensation to Relatives Act to be reduced where there has been contributory negligence on the part of the deceased person.
The awarding of exemplary or punitive damages by a court occurs rarely. The public policy underlying this class of damages is to sanction the defendant through an additional pecuniary penalty. While awards are extremely rare, they are still a factor that is considered in actuarial assessments used in setting premiums, particularly at the reinsurance level. Since the development of the common law on exemplary or punitive damages there has been significant legislative development of the statutory mechanisms for lodging complaints against and disciplining health professionals. In circumstances where there is a need to discipline the defendant there are now better targeted methods of doing so under the Health Care Complaints Act 1993 and the Medical Practice Act 1993. Accordingly, clause 17 of the bill will abolish exemplary and punitive damages for health care claims.
The second range of measures introduced by the bill will improve access by health care consumers to compensation. I am sure all honourable members will agree that all responsible medical practitioners should ensure they have proper liability cover for their professional costs, both in their own interests and, more importantly, in the interests of their patients. Part 3 of the bill requires registered medical practitioners to be covered by approved professional indemnity insurance unless exempted by the Act or regulations. Under clause 20 approval is to be by way of ministerial order published in the Government Gazette. The bill provides the flexibility to approve both insurance and discretionary indemnity cover.
Consultation with key stakeholders on the kind and extent of insurance cover that will be required, and whether it should include discretion arrangements, is already under way. Both medical defence organisations which offer a discretionary product and insurers which provide an insurance policy are being consulted, as are the medical profession and consumer groups. That said, there will be certain basic requirements in relation to the approval of indemnity insurers which will be considered: the level of cover must be adequate to cover claims by the severely injured, and it must provide adequate run-off cover for practitioners retiring or otherwise ceasing to practise in New South Wales. Whilst there are advantages and disadvantages to each type of cover, a key deficiency in discretionary cover is the absence of Commonwealth prudential regulation of the discretionary defence organisations. In the wake of the HIH collapse it is clearly imperative that as part of any overhaul of Commonwealth insurance regulation the Commonwealth must be prepared to undertake prudential regulation of both medical indemnity insurers and defence organisations in the public interest. I will be strongly advocating this position to my Commonwealth and State counterparts. Doctors employed in the public health system will be exempt from the mandatory cover requirement in respect of their employment as they are already adequately covered by the New South Wales Government 14784 LEGISLATIVE ASSEMBLY 19 June 2001 through the Treasury managed fund arrangements. It is envisaged that the regulations will also exempt other practitioners to the extent that they are already adequately covered through employment or like arrangements. Doctors who undertake activities in an area with no risk of personal injuries claims would be another possible class of exemption. Professional indemnity insurance will be a condition of registration. The Medical Board will have the power to suspend a doctor if it is satisfied that he or she does not have the requisite professional indemnity insurance cover. Practising without indemnity insurance, unless exempted by Act or regulations, will be unsatisfactory professional conduct.
Whilst comprehensive prudential regulation must properly be a matter for the Commonwealth, it has become apparent that some industry-specific regulation at State level is required. Regulation will be aimed at improving industry transparency, and ensuring that the savings achieved through part 2 are directed to sustaining compensation costs for the severely injured. This will in turn place downward pressure on the premiums of those medical groups at higher risk of such claims. Part 3 of the bill provides the regulatory mechanisms for achieving these reforms. As well as approving professional indemnity cover for medical practitioners, the relevant Minister will, by order, be able to impose the conditions that an insurer must comply with. Clause 21 sets out mandatory conditions in relation to data collection and reporting by the insurers. In the past there has been a lack of transparency about the claims experience of medical indemnity organisations and the costs associated with meeting those claims. Whilst suspecting that this information is of commercial value, I am determined that insurers who wish to operate in the New South Wales medical indemnity market must be prepared to provide data which can be published on an aggregated and hence de-identified basis to help inform both the profession and the community about the costs of the various components of personal injury compensation, including legal costs, as distinct from the costs of other activities in which the organisation might engage, and developing trends in personal injury claims against practitioners. The measures contained in part 2 of the bill will provide greater certainty and sustainability in relation to claims costs for the medical profession and medical indemnity industry. They too must play their part in ensuring a sustainable and comprehensive system of indemnity cover for all practitioners. Clause 21 imposes mandatory risk management obligations on medical indemnity insurers. They have an important role to play in maintaining and improving standards in the medical profession in the interests of improved service delivery and the containment of costs. Clause 22 will enable other conditions to be imposed under a ministerial order. Possible types of conditions contemplated are set out in clause 22. Conditions imposed under this section will have three primary aims: ensuring that the savings achieved through the measures in part 2 of the bill are directed to where they are needed, namely supporting the costs of compensation for the severely injured with high care needs; stabilising premiums for those higher risk procedural specialties which are currently experiencing rapidly escalating premiums; and ensuring medical indemnity insurers operate to appropriate standards. Consultation has already commenced with all stakeholders, including industry, in developing the details of these conditions. It is envisaged that those insurers wishing to provide approved insurance will be required to offer cover to a full range of specialty groups. Possible mechanisms to ensure that the effects of the cost containment measures under part 2 are directed to where they are needed include specifying rate relativities between different specialty groups, and arrangements to ensure all insurers bear their fair share of the cost burden of large claims. An expert actuarial consultancy has been commissioned to properly inform the development of appropriate mechanisms. It will be a condition for insurers operating in the New South Wales medical indemnity market that they comply with safeguards against the arbitrary withdrawal of insurance cover. It is envisaged that insurers will be required to develop appropriate review processes before implementing any decisions that may adversely affect an individual practitioner's continued insurance cover. This could involve linkages to the Medical Board's performance review system. Pro-active risk management programs and reasonable guidelines for claims management will be other issues under scrutiny in developing requirements which insurers must comply with. The potential sanction for any medical indemnity provider who fails to comply with the requirements of an insurance regulation order will be exclusion from the New South Wales medical indemnity insurance market for a specified period. This exclusion will be by way of ministerial order under clause 24. The bill ensures procedural fairness to an insurer against whom a prohibition order is contemplated. A prohibition order may do one of two things. First, it may prohibit an insurer from providing approved insurance at all. Second, it may prohibit an insurer from providing cover to newcomers but will not prevent it from renewing cover for existing customers. 19 June 2001 LEGISLATIVE ASSEMBLY 14785
Breach of a prohibition order by a corporation carries a penalty of up to 400 penalty units for a first offence and 800 penalty units for a subsequent offence. Appropriate compliance powers are included in part 4. There is an obligation on the relevant Minister to notify the Medical Board of a prohibition order. The Medical Board must in turn notify practitioners. Clause 24 of the bill ensures individual practitioners will not be left high and dry as a consequence of the making or breaching of a prohibition order. Their insurance cover will not be annulled by the making or breaching of an order or affect an insurer's liability to them. Honourable members will agree that proper professional indemnity cover is something all health professionals must responsibly consider.
Clause 25 of the bill provides a power to require other registered health professional groups to be covered by professional indemnity insurance. Further consideration is needed as to which other professional groups should be subject to this requirement. Detailed consultation would also need to take place with a particular profession before any indemnity requirement were applied to the profession, or to any group within it. However other health professions are not experiencing the dramatic escalation in premiums that some medical groups are. Accordingly, at the current time, it is not proposed to provide a regulatory power in respect of indemnity cover for other health professionals beyond the simple requirement to have it.
Part 4 of the bill provides protection from liability for doctors and nurses who voluntarily render medical assistance at the scene of an accident or other emergency. These good samaritans, acting in good faith, can render assistance safe in the knowledge that at some point in the future they will not become the victims of their own good deeds through medical negligence claims. Part 5 of the bill deals with a number of miscellaneous but important matters. In particular clause 28 of the bill relates to the situation where damages are awarded against a party who is not a health care provider within the meaning of the bill and, because the injury or death is caused in part by the health care provider, that other party is entitled to claim contribution towards those damages from the health care provider.
To ensure the integrity of the provisions of part 2, the health care provider's contribution is to be determined in accordance with ordinary principles for apportionment of responsibility amongst tortfeasors and calculated in accordance with the provisions of part 2. One of the primary purposes of the bill is to address escalating premiums for medical practitioners. It is not to shift the compensation cost burden from medical practitioners to other health practitioner groups, thereby driving up their indemnity costs and causing a crisis in their premiums. To ensure that other health practitioners, who may be joint tortfeasors with health care providers covered by part 2, are not unfairly penalised through the operation of clause 28, subclause (3) operates to ensure they do not have to bear the difference between a doctor's contribution, which is limited by the Act, and what the doctor would have had to contribute under the general law.
Schedule 1 to the bill amends the Private Hospitals and Day Procedure Centres Act 1988 to enable adequate insurance or other liability cover to be prescribed and imposed as a licence condition. That Act is currently the subject of a detailed review. In the course of that review consultation will occur with stakeholders on the making of a regulation in relation to compulsory liability cover. The bill also enables regulations to be made which can apply part 2 to licensees of private health facilities by including them in the definition of "health care provider". As part of consultation on the question of insurance requirements for licensed facilities, consideration will be given to whether it is appropriate to include some or all licensed facilities in the definition of "health care provider".
Finally, it is essential that the implementation of this legislation be closely monitored. The bill contains a mandatory review clause with a report of the review to be tabled in Parliament. A number of medical groups have argued that the courts make determinations of negligence in adverse medical events where doctors have committed no real fault. They argue that the law of negligence should be codified through legislation. The most common suggestion for codification is to define "negligence" by reference to a breach of a standard of care accepted by a responsible body of medical opinion. The Government does not share this view. The High Court has held that negligence is ultimately a question for determination by a court, having considered all the relevant expert medical evidence brought by both the plaintiff and defendant. In cases where medical treatment is at issue, what a responsible body of medical opinion would regard as a reasonable standard of care will generally be the standard applied by a court in determining whether a doctor has been negligent. However, the court must retain the ultimate discretion for those cases where it determines that prevailing medical opinion is inconsistent with a reasonable standard of care. The medical profession does not always get it right. One just has to look at Chelmsford. Deep sleep treatment practised at Chelmsford Private Hospital was accepted by a significant body of medical opinion and 14786 LEGISLATIVE ASSEMBLY 19 June 2001 doctors continued to refer their patients for this treatment for many years. Whilst prevailing medical opinion will generally be determinative of whether a doctor has negligently treated a patient, the ultimate discretion to determine this question will remain with the court, in the interests of safeguarding the community. Furthermore, medical paternalism has long ceased to be acceptable. In the interests of consumers it must be for the court, not the medical profession, to determine what is reasonable for patients to be told by their doctors when recommending particular treatment. A court, not the profession, must decide in any case whether the patients received adequate advice and disclosure of risks of treatment to enable them to make an informed choice about whether to proceed with that treatment. The High Court established this principle in the case of Rogers v Whittaker and it should stand. Mrs Whittaker had the right to know that there was a risk, albeit very small, that if she went ahead with the elective treatment recommended by her doctor she could end up completely blind. She never got that choice and she ended up blind, not because the treatment was negligently performed but because the treatment itself carried an inherent risk which she was never told about. However the Government does support a better approach to the handling of expert medical evidence in medical negligence cases. A comprehensive solution to the medical indemnity problem also involves non- legislative measures. Already there have been some excellent initiatives in the Supreme Court with the establishment of a professional negligence list, compulsory mediation powers and guidelines in train for the handling of expert evidence. The Attorney General's Department will be consulting with the Chief Judge of the District Court on possible improvements in the way medical negligence cases in that jurisdiction are handled. Compulsory mediation and guidelines for handling expert evidence will be included in this discussion. In addition, the Judicial Commission will be asked to develop judicial education programs specifically covering medical and hospital practice to facilitate a better understanding of medical practice and an improved appreciation of the range and type of contexts in which doctors practise. Quality improvement within the medical profession is also an important part of reducing claims risk. The New South Wales Government has already introduced groundbreaking reform with amendments to the Medical Practice Act to establish the performance review system. The New South Wales Ministerial Advisory Committee on Health Care Quality has also initiated a range of programs aimed at improving the safety and quality of clinical care. Specifically, the framework for managing the quality of health services in New South Wales was endorsed for implementation in February 1999. All area health services throughout the State have now formed quality councils as committees of each area board and are developing systems for monitoring and managing the quality of care that is delivered at the clinical level. These systems include the implementation of initiatives such as peer or clinical review, mortality and morbidity review, the effective use of clinical quality of care indicators, sentinel event management, review of complaints data, ad hoc audits and retrospective patient chart review. New South Wales Health, in collaboration with the State medical and nursing colleges, the Health Care Complaints Commission and the Australian Council on Healthcare Standards, has developed the clinicians' toolkit for improving patient care. This resource provides a practical guide to clinicians on how best to undertake these activities to ensure that the greatest benefit is achieved for the patients they treat. The aim is to identify systemic issues that need to be addressed to ensure that the care provided to consumers is safe, effective, appropriate, consumer-focused, efficient and accessible. New South Wales Health, with the New South Wales Council on Quality in Health Care, has recently developed a statewide patient safety strategy. This strategy will develop a system-wide approach for identifying, monitoring and reporting episodes of "unsafe care" or adverse events in New South Wales health services. A major component of the strategy will be the mandatory reporting of sentinel events and frequent incidents at a State level for action and statewide system change. Further, significant advances have been made in New South Wales in relation to applying the results of research into how human factors impact upon the clinical workplace. New South Wales Health has supported the development of a program on human error in medicine for conduct throughout public health services. Ongoing roll-out and evaluation of the program will take place over the next 12 months. The course has been developed by a group of dedicated New South Wales clinicians, a surgeon, two anaesthetists, a psychologist, a physician and an ex-Qantas pilot. This course, developed by clinicians for clinicians, is a significant step in the process to improve patient safety in New South Wales. New South Wales Health, in collaboration with the New South Wales Council on Quality in Health Care, has also been conducting a comprehensive education program for clinicians and managers. This process has been assisted by the expert advice and skills of the eminent Dr Brent James from the United States of America. I have also recently announced the establishment of the New South Wales Institute for Clinical Excellence. The activities of the institute will be focused on providing health care professionals with better skills 19 June 2001 LEGISLATIVE ASSEMBLY 14787 to ensure that health care is safer, more appropriate, more effective and more consumer-focused. As well as having a strong education and training role, the institute will provide support to area health services and others in improving health care, and in assisting clinical groups charged with the responsibility of implementing the health reforms I have outlined. The Australian Council on Safety and Quality in Health Care has now been formed and is working to develop national strategies for improving patient safety and quality. This is being done in collaboration with all the States and Territories, and New South Wales is taking the lead role in developing a number of these initiatives. New South Wales Health has also provided a significant level of funding to this body and will continue to do so over the next five years at least.
Area health services and other public health organisations will continue to work closely with clinicians through a number of quality initiatives to benefit doctors and patients. Nor does reform end here. Both the Premier and I have written to the Prime Minister and the Commonwealth Minister for Health, respectively, urging them to review immediately the Australian Taxation Office's treatment of structured settlements. Clause 18, providing for structured settlements by agreement, is modelled on the structured settlement provision in the motor accidents legislation. It has been inserted in anticipation that the Commonwealth Government will finally see the benefits, to both it and severely injured plaintiffs, of altering the tax treatment of structured settlements to make them a viable proposition for plaintiffs.
Furthermore, under the auspices of the Australian Health Ministers Council detailed work is continuing on reform proposals that can be implemented by all States and Territories. These include a sustainable framework for future care costs for the severely injured and national standards for the medical indemnity industry. I commend the legislative reform package as a reasonable and balanced set of measures aimed at achieving fair and sustainable compensation for consumers of health care who are injured through the fault of health care providers; sustainable premiums for the medical profession; the continued viability of a full range of health services for the community; and improved transparency and accountability of the medical indemnity industry.
The Government's bill has received broad support from the health community. Doctors all over the State have withdrawn their resignations. They have gone back to work in the expectation that this Parliament will support them. The countless meetings and discussions with all players in this debate have produced a package that is sensible and workable. It has received the support of all the professional medical colleges and the Federal Australian Medical Association, and countless other individuals and organisations. It is fair to say that the Government should reasonably be able to expect bipartisan support for this bill if the statements made by numerous members of the Opposition over recent months are to be taken seriously. In their press release of 13 February 2001, none other than the Leader of the Opposition, Kerry Chikarovski, and the shadow Attorney General, Chris Hartcher, had this to say:
At the moment the health system is in crisis The insurance problem is about looking after the patients, not about funding lawyers. The Government must back the doctors and the patients and resolve this immediately.
We know that since February the resignations have been withdrawn. The crisis has been abated—for the time being. I agree with the Opposition that this is not about funding lawyers; it is about making some choices about backing the doctors and the patients, and it is about doing so immediately. The doctors have withdrawn their resignations and averted a February crisis because of the Government's legislative package. This is the one they want. This is the one that we have collaborated with them about. This is the one that the Leader of the Opposition, the shadow Attorney General and the Opposition will need to vote for if they want to hold true to their February statement that we must back the doctors and the thousands of patients who need their support.
I could add to that list of Opposition calls to support the doctors and the patients the honourable member for Orange, the honourable member for Murrumbidgee, the honourable member for Lachlan and the honourable member for Bega. Perhaps, most importantly, I could add to that list the several representations I have received from the Leader of the National Party and honourable member for Upper Hunter, George Souris. Each of their items of correspondence identifies the problem. Each item of correspondence backs the doctors and the need to preserve services, especially in the bush, and each item of correspondence backs the Government's bill. In the end, though, it is a question of choice: a choice between medical services in the bush and no medical services for country, towns and rural communities For example, it is about the 1,500 mothers each year in Lismore and their right to have an obstetrician or general practitioner attend to their needs. It is about the 250 mums each year in Moree and their right to have adequate obstetric care. It is about the 200 mums every year in Young and their right to know, when they present to their hospital in labour, that there will be an obstetrician or general practitioner to care for them. It is 14788 LEGISLATIVE ASSEMBLY 19 June 2001 about 230 expectant mothers every year in Mudgee—expectant of adequate obstetric care when it is their time to deliver their baby. Indeed, it is a choice between the 87,000 children born in this State every year who may need the services of an obstetrician against the 850 individuals who lodge claims for medical negligence with their lawyers, noting, of course, that less than 10 per cent of those claims actually find their way to the courtroom for determination, with the vast majority settling by negotiation.
But it is not just about obstetrics. It is about mum, dad and the kids happily on their way to their annual holiday up the coast becoming victims of a terrible road accident and having the certainty of access to the finest neurosurgical care this State can offer. It is about the young university students with the rest of their lives ahead of them being confronted with the diagnosis of a brain tumour and knowing that world-class care is there when they need it. It is a choice between whether we want medical undergraduates trained to practise in high-risk specialties or the continuation of the steady decline in enrolments, as is presently the case.
Finally, there are those who would argue that this is a choice between the doctors and the lawyers and the rights of an individual versus the rights of communities to maintain medical service. These are hard choices. They are choices that rightly belong in a parliament for debate and decision. The Government has made its position clear. It supports the rights of communities to have medical services. It maintains the rights of individuals to pursue their rights against negligent doctors. It underscores the rights of this Parliament to choose. I commend the bill to the House.
Debate adjourned on motion by Mrs Skinner.
SPECIAL ADJOURNMENT
Motion by Mr Whelan agreed to:
That this House at its rising this day do adjourn until Wednesday 20 June 2001 at 10.00 a.m.
House adjourned at 7.41 p.m. ______