South Australia’s postponement of harmonisation shows the political weaknesses of the process

South Australia’s Parliament has delayed the introduction of its Work Health and Safety (WHS) Act until 2012 by postponing debate on the WHS Bill until February 2012.  The instigator for this action was the opposition (Liberal) parliamentarian, Rob Lucas, who SafetyAtWorkBlog has written about previously.

Lucas has issued a media release that states

“The Weatherill Government has continued to ignore the growing concern from industry organisations about the impact on housing affordability and the costs of doing business. Employer groups such as Business SA, the Housing Industry Association, Master Builders Association, Motor Traders Association, Australian Hotels Association, Civil Contractors Federation, Self Insurers of South Australia, and Independent Contractors Australia are all supporting significant amendments to the legislation…..

“It is also now clear there is no prospect of ‘harmonised’ work safety laws operation in all states and territories. Already New South Wales has amended the ‘model bill’ and the Western Australian Government has indicated they will also amend the model bill. The Victorian Government may also amend the model bill.

“In fact, the Victorian Government has claimed the Federal Government’s Regulatory Impact Statement has not assessed the impact of the bill and regulations on Victorian businesses. The Victorian Government is now ensuring this work is undertaken.

“The Weatherill Government also has not done any analysis on the impact on South Australian businesses and costs and this work should now be undertaken before the final decision is made on the bill.”

It seems that the South Australian Liberal Party has seen the political advantages opened by its Victorian counterparts in questioning the impact of the WHS laws on local economies.  This indicates an uncertainty in the party of its existing arguments. As with Victoria, South Australia has been an active participant in the Work Health and Safety harmonisation process from the very start through being a signatory of the Coalition of Australian Government’s agreement.

The Housing Industry Association (HIA) claim (unsubstantiated in the opinion of SafetyAtWorkBlog) that the laws will increase the cost of a domestic house by $A20,000 has been trotted out yet again, although no one outside the HIA seems to have viewed the report that is supposed to be the basis of the economic estimation.  The claim is again dismissed by the Industrial Relations Minister, Russell Wortley.

Wortley has previously stated that

“For years, business groups across Australia had been crying out for consistency and clarity on OHS laws, and now that they are on the table, some have broken ranks to look after their own self-interests. The Housing Industry Association is a classic case in point.

WorkCover figures demolish their claims of a good safety record, yet they argue against the WHS laws on the basis of a hyper-inflated claim that the new provisions will add tens of thousands of dollars to the price of building a new home.

Meanwhile, the Independent Contractors of Australia claim the WHS Act and regulations will weaken rules making all workers responsible for safety measures they could be reasonably expected to control. This is again a spurious claim.

There is nothing in the WHS Bill to diminish the responsibility of any party for any workplace health and safety matter under their control. In fact this legislation reinforces those responsibilities.”

This may be the “cut and thrust” of politics but Graham Dent of Dent Consulting & Law sought access to the HIA report.  Dent received a response from the HIA this week stating:

““The impact of harmonisation of OH&S laws will no doubt vary across Australia depending on the regimes currently operating in each jurisdiction, however, there can be little argument that it will have a particularly large impact in South Australia – which is reflected in the report.

HIA has not released the report to which you refer, and at this point in time has no plans to do so.”

Dent comments that

“So what I hear the HIA say is, this Report is the basis of and critical to our position. The large (adverse) impact on SA is all in the “independent” Report but we won’t release this document even though it is central to the aggressive scare campaign we have been running – just trust us OK !!

If the “independent” report cannot or will not be released it is fair to assume, in fact in my view it is compelling logic, that it contains qualifications or flaws which undermine the HIA case. In short, the claims of cost increases by the HIA can have no credibility unless the Report is released.”

During the Second Reading of the WHS Bill Independent  Parliamentarian Ann Bressington reveals some of the concerns about costs associated with the WHS Bill in South Australia:

“In advice to the HIA, Ms Elizabeth Perry, a partner at EMA Legal, warns:

…the shift from the recognised concept of control to a new untested concept of PCBUs is likely to result in a great deal of confusion and costly, extensive court cases as to the true meaning and extent of responsibility.”

It is reasonable to interpret the costs referred to as legal costs during a dispute.

Bressington continues

“It is here that I fear we will see the interpretation foreshadowed by Mr Whitington QC play out. Ms Perry then adds:

…the combination of the duties for PCBUs, the new definition of a workplace and the duties imposed by the new Regulations and Codes of Conduct will change in a fundamental manner the way that residential builders are able to conduct their work processes and compliance practices. Costs will necessarily increase substantially.”

“Necessarily” and “substantially” are yet to be challenged or verified.

Although Dent could not get a copy of the HIS report, SafetyAtWorkBlog has been informed that Ann Bressington was provided with copies of two reports by the HIA in her discussions so it is worth looking at her comments on the reports in Hansard.  Bressington says that

“First, the HIA has talked with me about what it sees as very real concerns on the cost of implementing additional safety measures. Its report suggested that it would cost in excess of $21,000 for every single-storey dwelling constructed. It claims the housing industry in South Australia would be close to collapse on the passing of this bill, but it seems to me that some of its costings are based on an exaggerated state of affairs. For example, a fence is already likely to be erected for security; why would you not have one for safety?…..”

“I do think the figures provided by the HIA and its consultant, Rider Levitt Bucknall, are not an accurate reflection of the real costs. If it does indeed cost that amount to set up a site safely, that suggests to me that they do not currently employ adequate safety measures on their sites anyway. I do not expect the housing industry to collapse on the back of this bill. Instead, the minister assures me that their modelling gives a more realistic figure of an additional $2,000 at the very most.” (link added)

It seems very likely that a review of regulatory costs of the WHS Bill will be undertaken, similar to that of Victoria.  One of the first documents that should be submitted to the inquiry is the HIA report from which various conservative politicians have been quoting for some years.  The economic investigation, hopefully independent and authoritative, may be the best way to verify the HIA’s cost claims and to clearly define the costs that various legal advisers are forecasting.

The necessity for an independent evaluation of costs is further illustrated by a comment from Bressington:

“I would like to make the point here that the nine-page report commissioned by Hudson Howells, which the opposition has been captive to, claims that the costs are estimated to be $1.4 billion to businesses moving towards this harmonisation of occupational health and safety laws. The report has no transparency in its calculations, and it seems to simply be a lobbying mechanism to delay the implementation of this scheme which the employer associations and the union groups had previously agreed to. I suggest that this report not be heavily relied on as its credibility is questionable.”

It would be possible to apply similar words to the cost claims being made by the Housing Industry Association but HIA has also told SafetyAtWorkBlog that the reports being sought will not be publicly released.

In the meantime, South Australian businesses need to wait for any of the economic benefits from WHS harmonisation identified by the Federal Government and, in relation to previous OHS legislation, the Productivity Commission.

Clearly, the Federal Government’s desire for harmonisation of occupational health and safety laws on 1 January 2012 is dead.  It will be fascinating to see what remains after the political argy-bargy.  It will also be fascinating to see if the government progresses with its plans to try to harmonise workers’ compensation in Australia, for which OHS harmonisation was seen to be a test-run.  It is difficult to see any reform in this sector being attempted after the exposure of the political weaknesses of the harmonisation and COAG processes.

Kevin Jones

reservoir, victoria, australia

7 thoughts on “South Australia’s postponement of harmonisation shows the political weaknesses of the process”

  1. So let me see if I understand this.

    On one hand we have so many Australian manufacturers / food producers of cut and bleeding under the massive financial burden of globalisation … but a piece of legislation aimed at safety has our politicians suddenly terribly troubled by the future welfare of our industries?

    Excuse me while I go hit my head against a brick wall.

  2. Although it is not clear what the financial impact on the domestic housing industry will be, I am reasonably certain it would be less if more had decent safety practices and were complying with current legislation already. It is well known that safety standards in this industry (with some exceptions of course) are far behind those of the commercial market and other industries for that matter. The injury statistics in this industry do not even come close to reality, as reporting injuries and making worker compensation claims is the quickest path to unemployment.

    1. This is an except from the current regulation in SA. What an openended arragement.

      Division 13—Prevention of falls
      76—Prevention of falls
      (1) The purpose of this regulation is—
      (a) to guard against falls that cause injuries due to the distances fallen; and
      (b) to guard against persons falling into enclosures or containers that contain a
      source of danger; and
      (c) to ensure safe access to elevated workplaces; and
      (d) to prescribe standards that must be observed in relation to the construction,
      maintenance and use of ladders; and
      (e) to prescribe standards that must be observed in relation to the performance of
      maintenance work carried out above ground level on permanent structures.

  3. Thanks for the ongoing updates. It makes you wonder how some of these people conduct OHS in its present form in the differnet states. Most must not be behind good moral correct safe practices.

  4. This state of affairs begs the questions – “Well who wanted ‘harmonisation’ in the first place?” and “Where are they now in the washup?”
    I am of the opinion that NSW (Lib) government jumped on the opportunity to reduce the pressure on their ‘big business’ constituents, whilst other state governments have jumped off the bandwagon and are lobbying to limit harmonisation because the model act actual increases pressure on ‘big business’ constituents eg HIA.
    In real terms, was ‘harmonisation’ ever going to be a reality when, in the final outcomes, with each jurisdiction able to make modifications, and answerable to noone except ‘the people’ when their time is up for re-election, each jursidiction would add/remove content for their own
    purposes as governments change over time anyway?
    And when was the last time ANY political party campaigned with WHS as a key policy? Hence they won’t really answer to the people on this issue either.

  5. Where are the worker representative groups in this? Goes to show how much of a voice the workers have in reality. Business and the government alike are not interested in workers wants and needs. yes there are some points that I think could be better in the legislation, but surely safer workplaces should be the main issue, not the ‘alleged’ extra costs involved. I havent seen anything from any employer group that states that it will definitely cost them more and if it does, doesn’t the worker and the community usually pick up the bill anyway?

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