Comments on impact of workers' compensation changes on SGIO

18/11/93

Finance Minister Max Evans today said he welcomed the fact that workers' compensation changes may increase the value of SGIO Insurance Ltd but rejected claims that the changes were in any way connected to the decision to privatise the company.

The Minister said both issues came into being separately during the term of the Lawrence Labor Government.

"It was the Lawrence Government which introduced legislation regarding the sale of SGIO, and the Lawrence Government which brought on the review of workers' compensation arrangements," Mr Evans said.

"That review, initiated by former Minister Yvonne Henderson, included investigation of the reasons for the unsustainable increase in common law compensation claims which had occurred over the past decade, and of possible ways to address the problem.

"It was that which led to the legislation currently before Parliament - the fact that workers' compensation changes may affect privatisation in a way which will increase the return to the State is coincidental."

Mr Evans also said there was no connection between the proposed SGIO float and the Auditor General's inability to sign off the company's accounts.

"Even if SGIO was not to be floated, the Auditor General would not be able to sign off the accounts until the workers' compensation legislation had passed both Houses," the Minister said.

"Clearly he cannot sign off a set of accounts based on current legislation, because he knows this would be misleading due to the fact that new legislation which will affect claims projections is before the Parliament, and has already passed through the Legislative Assembly.

"Equally, he cannot sign off a set of accounts based on the new legislation, because although it has passed through the Legislative Assembly, it has not yet passed through the Legislative Council.   In other words, until the new legislation is passed, the Auditor General has to put the SGIC's audit on hold, and that would be the case whether SGIO was to be floated or retained."

Media contact:  Tony Barker-May 481 3244