Will the government's Comcare review transform workers' compensation?

"This could be a real opportunity"

Will the government's Comcare review transform workers' compensation?

Insurance News

By Daniel Wood

The government is undertaking an important independent review of the Comcare Scheme. This national workers’ compensation arrangement, launched in 1988, currently has a limited scope. Those in the scheme, including Commonwealth government agencies and a select number of private companies like Telstra and major banks, also have to self-insure.

Some stakeholders would like to see Comcare’s scope extended and ultimately underwritten by private insurers. Gary McMullen (pictured above), supports this major change and said previous government reviews have also called for it.

Brisbane-based McMullen is workplace risk director for global brokerage Aon. He has over 25 years’ management experience in the workers’ compensation industry and made a submission to the review.

Fractured, costly, inefficient and unfair?

McMullen described the current workers’ compensation landscape as fractured, costly, inefficient and unfair. “There are 11 different schemes across Australia in the eight states and territories,” he said.

McMullen wants the Comcare scheme opened up to national employers and run in parallel with the state schemes. He said this will result in more consistent benefits, cost savings and encourage competition. McMullen said this proposal is in line with previous reviews, including a Productivity Commission report in 1994.    

McMullen said the “absurdity” of the current system can be seen in the banking industry.

The Commonwealth Bank, National Australia Bank and ANZ are all in the Comcare scheme but Westpac is not.

“Three of the major banks in Australia are in the Comcare scheme with one set of rules, one set of benefits and entitlements for their employees,” he said. “However, another major bank [Westpac] is insured in eight different jurisdictions with eight different rules, benefits and entitlements.”

He said this could be driving up Westpac’s cost of doing business by eight times compared to the other three banks.

The Comcare system’s benefits can also be unfair, said McMullen.

“There's a gross unfairness and inequality for injured workers across Australia,” he said. “If somebody gets injured in New South Wales, for the same injury and for the same employer they could get different compensation benefits if they were in another jurisdiction, like Victoria.”

However, McMullen wants to keep these state schemes.

“I think what would be left, is all of those employers who only operate in one jurisdiction could still be insured in the state schemes,” said McMullen.

He said some stakeholders have expressed a concern that the state schemes could go broke if all large employers moved to Comcare.

“But Taylor Fry in their review in 2008 indicated that the impact on the state schemes would be minimal,” said McMullen.

Three ways to improve Comcare


The Aon workers’ comp expert would like the government to roll out changes to the scheme in three stages.

The first stage would open the Comcare scheme to companies that compete with Commonwealth authorities. He said the regulations to do this have been in place for 30 years and this would only require a policy decision from the government.

 The second change, said McMullen, is “bolder”.

“That would be to open the Comcare scheme to everybody that operates in more than one jurisdiction,” he said.

The third move would bring in private insurers to underwrite the scheme.

“This would make the national premiums competitive because the Comcare scheme is currently only open for self-insured risks,” he said.

McMullen said private insurers already underwrite workers’ compensation in some of the state run schemes.

Comcare’s sixth review


Public submissions to the government’s review of the Safety, Rehabilitation and Compensation Act 1988 (SRC Act), or Comcare scheme, closed in December. However, a short survey with questions is open until the end of January.

McMullen said this is sixth review of Comcare since 1988.

“The pessimist out there would say that the government hasn’t acted on the prior reviews, so what's going to change?” he said. “The optimist would say that there’s now more education around the benefits of a national scheme and this could be a real opportunity for Labor to create a national workers’ compensation scheme.”

McMullen said the review panel have asked to meet and discuss his submission.

What do you think of the government’s review of Comcare? What changes would you like to see? Please tell us below

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