Annual Report 2005–2006 - WorkSafe Queensland · 2011-05-03 · WorkCover Queensland Annual...

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280 Adelaide St, Brisbane Qld 4000

GPO Box 2459, Brisbane Qld 4001

Telephone 1300 362 128

Facsimile 1300 651 387

www.workcoverqld.com.au

[email protected]

Annual Report 2005–2006

We’re listening...

Contents

Highlights for our customers 1Delivering Australia’s lowest average premium rate and earning the ‘best customer service provider’ rating from the independent Australian and New Zealand Return to Work Monitor, were among our highlights for the year.

About WorkCover Queensland 2Who we are, our vision, values and goals, and the industry we operate in.

Letter of transmittal 5

Chairman’s report 6Chairman, Ian Brusasco AM discusses our vision, the corporate strategies we have adopted to achieve it and the financial performance that underpins it.

CEO’s report 8CEO, Tony Hawkins, talks about our achievements for the year and expands on the three corporate drivers that will take our business operationally into the future.

Corporate governance 10An overview of our corporate governance processes. It provides details of our Board and executive management.

Performance overview 18Our balanced scorecard—a snapshot of our strategies, goals, and achievements in 2005–2006 across the organisation.

Be a customer focused insurer 20We’re listening—our focused approach has resulted in good outcomes for our customers this year.

Assist with delivering effective return to work outcomes for injured workers 27One of WorkCover’s major aims is to return injured workers to the workforce. This section explains how we do this and our major achievements in rehabilitation and return to work.

Be an organisation of professional, committed people 32This section provides details of our workforce and major achievements for our people this year.

Maintain a financially viable fund, balancing the needs of injured workers and employers 36A brief summary of our major financial results.

Financial report 39Our financial results in detail for 2005–2006 are outlined in this section.

Glossary 83

Index 85

Service charter ibc

>CommunicationobjectiveAt WorkCover Queensland we are committed to open communication with our stakeholders and employees about our plans and our performance.

This annual report is a comprehensive record of our financial and non-financial performance for the 2005–2006 financial year. It explains who we are, what we do, and how we do it. It records our actual achievements compared with what we set out to do in our corporate plan, which is reviewed annually.

WorkCover is required to produce an annual report under the Workers’ Compensation and Rehabilitation Act 2003, but we aim to go further than this requirement by providing reliable information to meet the various needs of our stakeholders. Our stakeholders include all individuals and groups that are affected by,

or have an interest in our business. These include, but are not limited to:

• workers

• employers

• unions

• industry associations

• medical and allied health professionals

• lawyers

• our employees

• government departments and agencies.

We welcome your feedback on this annual report by email to [email protected] or by telephone to 1300 362 128.

This annual report, and previous annual reports can be found at www.workcoverqld.com.au.

WorkCover Queensland Annual Report 2005–2006 �We’re listening …

> Reduced average premium rate (p. 24)

We reduced our premium rate from $1.55 per $100 wages to $1.43 and announced a further reduction of 16% to $1.20 effective 1 July 2006. Queensland has maintained the lowest premium rates of any state in Australia for the last seven years.

> Highest ever customer satisfaction among injured workers (p. 23)

Our annual customer satisfaction research revealed injured worker satisfaction is at a record high of 76.5%, (2004–2005: 76.4%) almost reaching our target of 77%. Our employer satisfaction also remained high at 75.5% (2004–2005: 76.9%).

> Opened new customer service centres (p. 22)

We opened three new customer service centres in Townsville, the Gold Coast and Brisbane East. Our new Brisbane North centre opened on 3 July 2006 and we plan to locate and open a site at Brisbane West in 2006–2007.

> Reduced decision-making timeframes (p. 25)

This year 80% of statutory claims were decided in 10 days or less (2004–2005: 75%). This reduces the time between injury and rehabilitation, enabling the worker to return to work sooner. The resulting shortened claims duration reduces costs and lessens the impact on employer premiums.

Contents Highlights for our customers

2006 2005 Movement

$’000 $’000 %

Incomestatement

Underwriting result 576 237 (206 783) 379

Investment income 373 841 323 021 16

Operating result before income tax equivalents 945 615 112 488 741

Operating result after income tax equivalents 669 104 86 731 671

Balancesheet

Total assets 3 168 549 2 878 894 10

Total liabilities 1 776 900 2 160 249 (18)

Netassets 1391649 718645 94

Equity

Reserves 899 256 285 928 215

Accumulated surplus 492 393 432 717 14

Totalequity 1391649 718645 94

>Financialhighlights

Figure 1

WorkCover Queensland Annual Report 2005–2006�

To excel in workers’ compensation insurance.

>Ourvision

About WorkCover Queensland

AWorkCoverQueenslandaccidentinsurancepolicyinsuresemployersagainstthecostoftheirinjuredworkers’statutoryandcommonlawclaims.Thisinsurancecoverageensuresthatanemployeewhoisinjuredatworkreceivesfinancialsupportandrehabilitationfollowinganinjury.

Abovephoto:WorkCoverQueensland’scorporateofficeislocatedintheBrisbaneCBD.WehavecustomerservicecentresthroughoutmetropolitanandregionalQueensland.

• Be a customer focused insurer.

• Assist with delivering effective return to work outcomes for injured workers.

• Be an organisation of professional, committed people.

• Maintain a financially viable fund, balancing the needs of injured workers and employers.

>Ourgoals

• Excellence • Integrity • Responsiveness • Respect.

>Ourvalues


>OurindustryIn Queensland, the Workers’ Compensation and Rehabilitation Act 2003 states that every employer, unless a licensed self-insurer, must have a workers’ compensation policy with WorkCover Queensland. Strict legislative criteria including number of employees, assets, and health and safety performance, determine eligibility for a self-insurance licence. There are currently 26 self-insurance licences in Queensland, covering 281 employers and their employees.

>WhoweareWorkCover is a Queensland Government owned statutory body, which means while we are owned by the Government and linked to the Department of Industrial Relations, WorkCover operates as an independent, commercial enterprise and is self funding. Our income is derived from premiums paid by employers and returns on our funds invested. We are governed by the Workers’ Compensation and Rehabilitation Act 2003.

>WherewehavecomefromWorkers’ compensation insurance has been part of Queensland business since 1916. When the Queensland workers’ compensation scheme underwent a comprehensive review as part of the Kennedy Inquiry in 1996, the challenge of turning a government-owned, debt riddled and poor performing bureaucracy into a commercial business was challenging. At that time, the scheme had a $320 million deficit.

WorkCover was formed in 1997 and has transformed workers’ compensation insurance in Queensland. WorkCover is now financially secure and has undergone massive change and improvements to become the most successful insurer of its kind in Australia.

>WhatwedoWorkCover is the main provider of workers’ compensation insurance to Queensland employers.

A WorkCover accident insurance policy insures employers against the cost of their injured workers’ statutory and common law claims. This insurance coverage ensures that an employee who is injured at work receives financial support and rehabilitation following an injury.

>HowwedoitWe have a simple philosophy of maintaining the best possible benefits and rehabilitation programs for injured workers, combined with the lowest possible premiums for employers. We return excess funds to employers and injured workers through premium rate reductions, improved benefits and better services. Our corporate plan and statement of corporate intent outline our strategies for addressing our vision, values and goals. They also detail our corporate drivers and how we will meet our business projections and performance standards.

WorkCover insures more than 146 000 employers and manages over 76 000 statutory and 2 100 common law claimants annually. Eighty per cent of statutory claims are decided within 10 days. WorkCover employs over 900 people in metropolitan and regional Queensland.


WorkCovermanagesapproximately85%ofallworkers’compensationclaims,withself-insurersaccountingfortheremaining15%.

Self-insurers15%

WorkCoverQueensland85%

>Claimsmanagement2006

Figure 3

>WorkCovercustomerservicecentresinQueensland* Brisbane includes CBD, Brisbane North, South and East.

Figure 2

Sunshine Coast

Gold CoastBrisbane*Toowoomba

Maryborough

Rockhampton

Mackay

Townsville

Cairns

Gladstone

Bundaberg



Queenslandisafastgrowingeconomyandbyofferingthelowestworkers’compensationpremiumsinAustralia,wearehelpingtomakeQueenslandanattractiveplacetodobusiness.

Thisyearweopenedthreenewcustomerservicecentresin

BrisbaneEast,TownsvilleandtheGoldCoast.IanGarbuttmanagesour

brandnewfacilityatBrisbaneEast,whichemploysover50people.

WorkCoverQueenslandoffersthelowestpremiumrateofanyAustralianstate.(ComcareisaFederalGovernmentscheme.)

monitoring insurer performance and compliance, deciding self-insurance applications, reviewing insurer decisions and administering medical assessment tribunals.

>AustraliawidecomparisonWorkers’ compensation schemes in Australia are independent of each other and managed by state governments. In some states, workers’ compensation and workplace health and safety regulation are combined, but in Queensland, these responsibilities are separate.

There are significant differences among the various Australian schemes. For example, Queensland is the only state to manage claims in-house, and we believe this is an important part of our good customer service results. Premium rates also vary significantly between the states, with Queensland maintaining the lowest rate in Australia for seven consecutive years.

>QueenslandeconomyQueensland is a fast growing economy and by offering the lowest workers’ compensation premiums in Australia, we are helping to make Queensland an attractive place to do business. In addition, the growing state population means there are more employers and workers in Queensland. This is significant when considering the number of claims registered with WorkCover has not risen in proportion with population growth, and reflects the positive efforts of Queensland employers in managing workplace health and safety, and WorkCover’s return to work outcomes.

>Q-COMPregulationThe Queensland workers’ compensation industry is independently regulated by Q-COMP, which was separated from WorkCover on 1 July 2003. Q-COMP is primarily funded by contributions from insurers and is responsible for functions including

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2002 2003 2004 2005 2006

Queensland ComCareNew SouthWales

Victoria AustralianCapital

Territory

SouthAustralia

NorthernTerritory

WesternAustralia

Tasmania

>Australianaveragepremiumrates$ per $100 wages

Figure 4


October 2006

The Honourable John Mickel MP

Minister for State Development, Employment and Industrial Relations

Executive Building

111 George St

BRISBANE QLD 4000

Dear Minister

I am pleased to present the 2005–2006 WorkCover Queensland Annual Report.

WorkCover has had another successful year. Most pleasingly, we have recorded some of the highest ever levels of customer satisfaction among our injured worker and employer customers.

We have done so, while still delivering on our promise to deliver the best possible benefits to injured workers at the lowest possible cost to employers.

I acknowledge the contributions of our Board, CEO and most of all the hard work and dedication of our people, each of whom have contributed to our status as arguably the best workers’ compensation insurer in Australia.

I commend this report to you as a demonstration of our success and commitment to the future of Queensland workers’ compensation.

Yours sincerely

Ian Brusasco AM

Chairman

Letter of transmittal


Chairman’s report

Balancing the needs of injured workers with those of employers has been part of our vision to excel in workers’ compensation insurance since WorkCover was established in 1997. We measure our success against this vision by listening to our customers, our stakeholders and our people. Every year we conduct formal, independent research into our customer satisfaction and after several years of consistently high measures of satisfaction—nearing or exceeding our targets of 77% satisfaction—we believe we have that balance right.

The role of the Board is therefore to steer WorkCover on its course, keeping a consistent strategy with only incremental change, to continue meeting the goals we set for ourselves several years ago. We review our vision, values and goals every year, but our achievements tell us we are on the right track and as such, we have not changed these goals for many years.

Our four goals are to:

1. beacustomerfocusedinsurer2. assistwithdeliveringeffectivereturntoworkoutcomesforinjuredworkers

3. beanorganisationofprofessional,committedpeople

4. maintainafinanciallyviablefund,balancingtheneedsofinjuredworkersandemployers.

Throughout this annual report, we report our performance against these goals.

2005–2006 has been a successful year for WorkCover with some significant achievements. After listening to our customers and examining their demographics, we opened three new customer service centres—in Townsville, the Gold Coast and Brisbane East, and another in Brisbane North on 3 July 2006. A centre for Brisbane West is planned for 2006–2007. We are allocating our resources where they are most efficiently used, and by being close to our customers, are better able to listen and respond to their needs.

From 1 July 2006 our average premium rate lowers from $1.43 per $100 wages paid, to $1.20. This rate is by far the lowest in Australia, and while our premiums are low, our benefits to injured workers are high. This year, benefits to injured workers have improved in many ways, including increasing statutory lump sum payments, extending the step down in benefits for injured workers from 39 weeks to 52 weeks, increasing compensation payable to dependant family members on the death of a worker and introducing new benefits for totally dependant spouses and non-dependant family members, for example, a grandparent looking after the worker’s children.

We are able to support lower premiums and higher benefits because we manage our finances well and have a strong equity position. This year, two major factors have contributed to our strong financial position.

Firstly, the Board is particularly focused on our investments, with over $3 billion in funds under management with QIC. For the last three years we have followed a strategy to minimise our exposure to volatility in Australian and international equity markets, which has involved securing our mid-year return for the duration of the year. This has proven extremely successful, consistently returning near 14% per annum after fees. We will continue to review our strategy on an annual basis with our focus always remaining on optimum return at minimum risk, to retain our strong and stable financial position.

Secondly, we worked closely with the Queensland Government and supported their responsible decision to change the legislation surrounding asbestos claim payments. For several years WorkCover has had to provision for outstanding asbestos claims, which has seen millions of dollars set aside for claims not yet received. This year, we were able to reduce our outstanding claims provision, effectively returning this money to the fund for future benefits for Queensland employers and workers. We would especially like to thank the Honourable Tom Barton, former Minister for Employment, Training and Industrial Relations, and Minister for Sport and his team, for their continued partnership and support throughout the year, which makes such initiatives possible.

“Weareabletosupportlowerpremiumsandhigherbenefitsbecausewemanageourfinanceswellandhaveastrong

equityposition.”

IanBrusascoAM

Chairman


WorkCover is a successful organisation and while reflecting on our achievements; we would rather look forward, and be a leader in our industry. To this end, there are some important issues on our agenda this year, including national workers’ compensation and liaison with major stakeholders.

>Nationalworkers’compensationThe push for a nationally consistent workers’ compensation scheme is not new, and it does have many merits, particularly for businesses that operate in more than one state or territory, and are currently dealing with different rules and regulations every time they cross a border. However, we are concerned about business electing to move into the federal Comcare scheme based on price alone. We urge business to consider whether moving to Comcare will impact negatively on premium rates, customer service and most importantly, benefits to injured workers. The Queensland model is arguably better in all of these areas.

We have long said that a well-run government owned organisation can be successful, and WorkCover Queensland is a model example of this. Because of lower premium rates, better benefits and the best customer service in Australia (as rated by the independent Australian and New Zealand return to work monitor) we do not want to see our fund negatively affected by being forced into a national structure. Others should rise to our high standards before such talks take place.

>StakeholderliaisonIt is important that we build strong relationships within the industry and with our major stakeholders including the Australian Medical Association, plaintiff lawyers, unions and industry bodies. This year we expanded our independent customer satisfaction research to listen to doctors, medical practice managers and plaintiff lawyers. The results of this research show we have well established, positive relationships with these groups, but also show us where we can improve.

By building stronger relationships we can improve the rehabilitation and return to work process for injured workers and their employers. Early rehabilitation and return to work is not only good for the injured worker; but WorkCover benefits from lower costs, and in turn these savings are passed to employers through lower premiums.

>FuturedirectionWorkCover is a successful business and it would be easy to continue as we have, and become complacent, but we want to lead our industry and continue to push the boundaries to deliver even better customer services. We will continue

to listen to our customers and do our best to deliver on our vision to excel in workers’ compensation insurance.

During our annual strategic planning process, the Board and executive management group identified three drivers that will most influence our ability to deliver above and beyond the expectations of our vision, values and goals. These three drivers are:

1. buildingstrongandmutuallybeneficialstakeholder relationships

2. developingandimplementingbusiness solutionsbyrefininginternalprocesses

3. identifyingemergingclaimandindustrytrends.

Each of these three drivers is about listening— to our stakeholders, to what is happening in the industry, and to our own people, and they are operationally driven by our CEO, Tony Hawkins.

>AcknowledgementI would like to thank the former Minister Barton for his support, my Board for their excellent leadership, the senior management for delivering on our goals, and all of our people for their contribution this year. I look forward to our continued success in 2006–2007.

Ian Brusasco AM Chairman

Chairman’s report

“Wewillcontinuetolistentoourcustomersanddoourbesttodeliveronourvisiontoexcelinworkers’compensationinsurance.”


CEO’s report

In this past year of change and growth we have been ever mindful of our philosophy for ‘evolution, not revolution’. We have implemented a range of premium related initiatives, exceeded our targets for statutory claim decision making and return to work outcomes, reduced common law claims and reduced complaints. The implementation of a new organisation structure has supported our frontline people in delivering better customer service and we have made progress towards the three drivers (stakeholder relationships, business solutions and emerging trends) that we believe will make the difference between WorkCover being not just a good business, but a great business.

>PremiuminitiativesIn addition to lowering our average premium rate from $1.43 to $1.20 per $100 of wages from 1 July 2006, it is significant that this year there were no Workplace Industry Classification (WIC) rate increases and F-factors were reduced. To calculate an employer’s premium rate, the Experience Based Rating system takes into account an employer’s wage and claim experience and the wage and claim experience of the industry they work in. By not increasing WIC rates and reducing F-factors, employer premiums will remain as low as possible—and by far, the lowest in Australia. This has only been possible because Queensland employers continue to improve their work practices and keep workplace injuries down.

We review our products annually. As a result we decided to change our household worker insurance policy from a financial to calendar year renewal date, by extending existing policies for six months. At only $40 for two years, this insurance offers peace of mind for anyone employing a household worker, for example, a cleaner or gardener around the home.

>StatutoryclaimsManaging statutory claims is the largest part of our business and we continue to be the only Australian state to manage all of our claims

in-house. We believe this gives us a significant advantage in both customer service and efficiency. This year, we worked hard to achieve our goal to reduce claim decision making timeframes, and now 80% of claims are decided in 10 days or less, up from 75% last year. This is significant because the sooner we accept a claim, the sooner the injured worker can access medical treatment, rehabilitation and return to work.

We have proven that when all parties understand their rights and responsibilities, and actively participate in rehabilitation, injured workers return to work faster. As a consequence of our good relationships with injured workers and employers, our lost time duration stabilised at approximately 39 days.

Also contributing to these excellent outcomes for injured workers, is the cooperation between other stakeholders in the rehabilitation process including doctors and other medical and allied health professionals. For the last few years we have made it a priority to work closely with the medical community to achieve faster and better outcomes for injured workers. This year we participated in the Workers’ Compensation Medical Services Committee, which aimed to facilitate discussion and proactively resolve issues between the medical and workers’ compensation communities. We also expanded our annual customer and stakeholder satisfaction research to listen to the views of doctors and medical practice managers. This told us we are making progress in building these relationships and identified some areas in which we can improve.

>CommonlawclaimsPleasingly, there has been a decrease in the number of common law claimants, down this year from 2 470 to 2 154. Anecdotally, we can attribute this decrease to improved injured worker satisfaction with statutory claim benefits and outcomes. If an injured worker is satisfied with the outcome they receive at a statutory level and their employer treats them with respect and participates in their rehabilitation, they are less inclined to pursue a common law action. The decrease in common law lodgements has had a large impact on our ability to reduce premiums. It is important to note that this decrease in common law claims has resulted in an environment where access to common law is still unlimited. Unlike other states in Australia, we have not bowed to pressure to reduce access to common law in order to reduce payouts and influence premium rates.

This year we expanded our customer and stakeholder satisfaction research to incorporate listening to plaintiff lawyers. This revealed that plaintiff lawyers are largely satisfied with their dealings with WorkCover, and identified some areas to improve. One positive outcome, for employers and injured workers alike, has been a slight increase in the number of cases settling

TonyHawkinsCEO


CEO’s report

before court proceedings. This is a reflection of our ability to work well with all parties involved.

>ComplaintsreducedThis year we have seen a decrease in the number of complaints about WorkCover registered with the Ombudsman, from 134 to 117. This does not necessarily mean there are fewer issues to resolve; rather we believe it can be attributed to our willingness to listen to our customers and resolve these issues so they do not need to be escalated to a third party. We are proactive about listening to our customers and responding to their needs.

>StructuralchangesThe above improvements and achievements can be largely attributed to our new organisation structure, which enables us to be more open and accessible to our customers and stakeholders. The new structure groups ‘like with like’ functions to create a front office—our people at the coalface, interacting daily with our customers—and a back office, which contains all of our support areas such as administration, finance, information technology, legal services, training and human resources. Our business is driven by those front office people who are able to provide excellent frontline customer service because they are supported by an efficient and streamlined back office.

>Futuredirection—ourdriversOur vision is to excel in workers’ compensation insurance, and to truly excel, we need to deliver what we call the ‘wow factor’. We want to give our customers more than they expect.

We believe that generating this wow factor for our customers comes down to three drivers:

1. buildingstrongandmutuallybeneficialstakeholder relationships

2. developingandimplementingbusiness solutionsbyrefininginternalprocesses

3. identifyingemergingclaimandindustrytrends.

If managed well, these three drivers have the most potential to positively impact on our vision, values and goals. These drivers are not new, but have evolved over the last couple of years, and we have already started to make progress towards their achievement.

>StakeholderrelationshipsWe want to improve our business partnerships with key stakeholders including injured workers, employers, industry associations, unions, medical providers, allied health professionals, and lawyers. A good relationship involves two-way communication so this year we made a conscious effort to listen to our stakeholders. We expanded our existing customer satisfaction research to incorporate doctors, medical practice managers

and plaintiff lawyers, in order to better understand their impressions of WorkCover, their wants and needs, and how they believe we can improve relations to deliver more efficient and effective outcomes for injured workers and employers.

For example, on 1 July 2006 we implemented an early lodgement fee paid to doctors who lodge a worker’s Application for Compensation form with their invoices and medical certificate. If WorkCover can receive all of this information early and in one package, the claim can be assessed faster, the doctor’s invoice paid faster and the injured worker receives medical treatment earlier. Consequently, the injured worker returns to work faster, which also saves WorkCover time and money. This financial benefit to WorkCover is passed on to employers in the form of lower premium rates. It is therefore of great importance that we have open communication and understanding of WorkCover processes among the medical community.

>BusinesssolutionsBusiness solutions is focused on enabling our people to provide excellent customer service, by providing the behind the scenes technology and support required. We want to stay at the forefront of technology and plan for the future needs of WorkCover by constantly reviewing and refining our processes.

>EmergingtrendsWe are proactive in monitoring developments in legislative change, government initiatives, industry trends and practices, injury profiles, behavioural changes in injuries and trends in workforce practices. One only has to look at asbestos related injuries for a demonstration of the financial impact such a trend can have on our scheme. Because we identified this trend early we were able to take steps to amend our legislation so current employers are not detrimentally affected by premium increases that existing provisioning requirements may have caused. We are still committed to paying all asbestos related entitlements, but can now budget for these on a year-to-year basis. We have established a working party that monitors and ranks potential emerging trends.

>AcknowledgementsFinally, I would like to thank all our people for their commitment and hard work throughout the year. The support of our management team and people has allowed us to deliver the outcomes detailed in this report and will be the driving force behind our growth in 2006–2007.

Tony Hawkins CEO

“WewanttostayattheforefrontoftechnologyandplanforthefutureneedsofWorkCoverbyconstantlyreviewingandrefiningourprocesses.”

WorkCover Queensland Annual Report 2005–2006�0

Customer ServicesEvron McMahon

OperationsLouise Rusan

Common LawGordon Lawson

FinanceDavid Heley

Business SolutionsTrevor Barrenger

Human ResourcesRobert Miller

Executive Services UnitChristina Carras

WorkCover CEOTony Hawkins

Internal AuditErnst and Young

Audit Committee

WorkCover Board

Minister for Employment, Training and Industrial Relations, and Minister for SportHon. Tom Barton MP

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Our customers and stakeholders including workers, employers, unions, industry associations, medical and allied health professionals, our people, lawyers, governmentdepartments and agencies, and any other stakeholders.

>BoardofdirectorsAccountable to the Hon. Tom Barton MP, Minister for Employment, Training and Industrial Relations, and Minister for Sport at 30 June 2006, the WorkCover Board sets and monitors our strategic direction and performance, and ensures the organisation meets the financial and non-financial targets outlined in our Statement of Corporate Intent.

Section 427 of the Workers’ Compensation and Rehabilitation Act 2003 outlines the statutory role and requirements of the Board, while the WorkCover Board Charter sets out in detail its role and responsibilities.

The WorkCover Board is comprised of a chairman and six directors. All directors including the

chairman are non-executive directors, appointed by the Governor in Council for a three-year term. The Governor in Council selects directors based on their experience and knowledge, and determines their remuneration. Information on directors’ and executives’ benefits is detailed in Note 28 (p. 67) to the financial statements.

The Board abides by the Australian Institute of Company Directors guidelines and code of conduct, and the Queensland Government Welcome Aboard: A Guide for Members of Government Boards, Committees and Statutory Authorities that outlines the role of government Boards, and the responsibilities of those who serve the community as members.

The CEO is responsible for all aspects of the management, staffing and administration of WorkCover’s day-to-day business.

The Minister provides directors with an indemnity. In 2005–2006 WorkCover paid insurance premiums for directors’ and officers’ liability and legal expenses insurance contracts for current directors’ and officers’ including the CEO and general managers.

These insurance premiums relate to costs and expenses incurred by the relevant director or officer defending either civil or criminal legal proceedings and other liabilities that may arise from their position. The insurance does not cover conduct involving a wilful breach of duty or improper use of information for personal gain.

Corporate governance

Ourcorporategovernancesystemsguidethewaywemanageourbusiness,minimisingriskandensuringintegrity.Basedonstrongethicalfoundations,thesesystemsenableustosetandassess

corporateobjectivesandrisks,whilemaintainingfairness,accountabilityandtransparency.

First Currentterm Notes appointed expires

I Brusasco AM (Chairman) 1998 30 June 2006 Reappointed 1 July 2006

T A White AO (Deputy Chairman) 1997 30 June 2006 Reappointed 1 July 2006

W P Ludwig OAM 1998 30 June 2006 Reappointed 1 July 2006

R W Monaghan 2003 30 June 2008

H W Shand 2001 30 June 2006 Reappointed 1 July 2006

H A Skippen 2003 30 June 2006 Reappointed 1 July 2006

R C McNally 2006 30 June 2009 Appointed 1 July 2006

>Ourorganisationstructureandreporting

Figure5

Asat30June2006

Directors

Figure 6

WorkCover Queensland Annual Report 2005–2006 ��We’re listening …

TheBoardfromlefttoright:HelenSkippen,IanBrusascoAM(Chairman),BillLudwigOAM,RowenaMcNally,HaroldShand,RonMonaghan,andTerryWhiteAO(DeputyChairman)


Bill Ludwig OAM

Bill joined the WorkCover Board in 1998 and has a strong union background, also serving as the Queensland Branch Secretary and National President of the Australian Workers’ Union. He is an Executive Member of Australian Council of Trade Unions, and a Director of Q-Leave and Sunsuper. Bill was awarded the Order of Australia Medal in 2001 for distinguished service to industrial relations.

Ron Monaghan BA

Ron was appointed to the WorkCover Board in 2003. He currently serves as Vice President of the Queensland Council of Unions and Secretary of the Australian Liquor, Hospitality and Miscellaneous Workers’ Union, Queensland Branch. Ron is the Queensland President of the Australian Labor Party.

Harold ShandASM, BA, LLB

Appointed to the Board in 2001, Harold is the Chairman of the Audit Committee. Harold has experience across a range of industries. He is the Chairman of Premier Pacific and the Australian and Queensland Rugby Judiciary Committees. Harold was formerly the Chairman of Higgins Manufacturing Group, Director of Sullivan & Nicolaides Pathology Group and Jellinbah Resources.

ChairmanIan Brusasco AM PhC

Ian was originally appointed to the role of Chairman of the Board in 1998. As Chairman of Foodbank, Director of QIC and Queensland Academy of Sport and formerly Chairman of Port of Brisbane Corporation, Brisbane Strikers, 4TAB and 4KQ, Ian has extensive experience as a chairman and director across a range of industries. He served as an Alderman on the Brisbane City Council for 14 years. In 1988 he received the Advance Australia Foundation Award for Services to Business, Sport and Community and in 2003 was awarded the Centenary Medal.

DeputyChairmanTerry White AO BA, PhC, MPS, FAIM

Appointed in 1997, Terry is a member of the Audit Committee. He is the Chairman of White Retail and Terry White Chemists. Terry is the founding Chairman of the Nudgee College Foundation and Zoe Reid Little Bridge Home. He is also a Director of Australian Liver Foundation. Terry’s experience includes roles as a Member of Parliament, Minister of the Crown, President of the Pharmacy Guild, and director of retail companies. Terry was awarded the Officer in the Order of Australia this year for service to the pharmacy profession, to the community and to the Queensland Parliament.

Helen Skippen BBus, MBA

Helen was appointed to the Board in 2003 and is also a member of the Audit Committee. As a Partner of Corporate Context, Associate Fellow of the Australian Institute of Management, and an Associate of the Australian Marketing Institute, Helen’s skills in marketing, communication and business management are valued by the Board and Audit Committee.

Rowena McNallyLLB, MAICD, AFAIM

Appointed to the WorkCover Board as at 1 July 2006, Rowena is the Sugar Industry Commissioner and Chairperson of the Mt Isa Water Board and Queensland Cerebral Palsy League. Her background is in law and she has experience as a director across a range of industries.

BoardSecretaryChristina Carras BCom, ACA, SIA (Aff), Grad Dip CSP

Christina was appointed Board Secretary in February 2003. A chartered accountant with previous roles in banking and finance, Christina brings expertise in accounting, compliance and audit.

WorkCover Queensland Annual Report 2005–2006��


>Managementteam

ChiefExecutiveOfficer

Tony Hawkins BCom, Dip Fin Mgt, FCPA

Tony has been the Chief Executive Officer of WorkCover Queensland for the past nine years. This follows 13 years insurance experience with the AXA Group and 14 years mining experience at CSR. Tony is currently a director of QSuper and Workplace Health and Safety.

GeneralManagerCustomerServices

Evron McMahon Dip Bus Mgt, CMAHRI

Evron has a background in human resources and extensive experience in the insurance industry.

This contributes to her knowledge of claims and relationship management, which has been key to achieving a service balance between injured workers, employers and stakeholders.

GeneralManagerCommonLaw

Gordon Lawson FCA

Gordon brings a unique blend of business experience to WorkCover that has contributed to achieving the lowest average premium rate of any Australian state. Before joining WorkCover in 1999, Gordon was a partner in a large firm of chartered accountants and the owner and director of a medium sized Queensland business.

GeneralManagerOperations

Louise Rusan BBus

Louise has over twenty years senior management experience across a diverse range of private sector industries including insurance, construction, tourism and corporate communication consultancy. This business experience supports her ability to deliver efficient customer driven processing functions, through our customer contact centre and our business services team.

WorkCover’smanagementpeople

aremotivated,ambitious,andexcited

bytheopportunitytoworkforan

organisationthatisintenselyfocused

ondeliveringanexceptionalinsurance

service.

GeneralManagerFinance

David Heley BAdmin, FCPA, DFP, FPA (Aff), Grad Dip CSP

David’s financial skills and experience ensures WorkCover maintains its strong financial position. David, as Chief Financial Officer, is responsible for managing all finance, investments, performance reporting, statistical analysis, compliance and property management functions to support our business.

GeneralManagerBusinessSolutions

Trevor Barrenger BA

A new addition to the executive management group from June 2006, Trevor brings a wealth of experience to WorkCover, including 20 years IT consulting experience throughout Europe, America and Australia with leading organisations including KPMG.

GeneralManagerHumanResources

Robert Miller BBus

Robert is a HR professional with over a decade’s experience in the fields of training, leadership development, recruitment and selection and internal consulting. Robert brings a commercial and customer focus to his role from his background in banking and finance.


against key performance indicators (KPIs) in their individual performance plan is measured.

>Directors’meetingsBoard and Audit Committee meetings held and attended by each director during the financial year totalled:

>StrategicplanningAnnually, WorkCover produces a corporate plan that sets our strategic direction for the next three years, and a statement of corporate intent (SCI). The SCI, which is a subset of the corporate plan, outlines in more detail our objectives and main undertakings for the next financial year. Both of these documents are approved by the Minister in accordance with the Workers’ Compensation and Rehabilitation Act 2003. Both documents outline our:

• vision, values and goals

• business divisions

• key corporate issues

• business projections.

Our annual customer satisfaction research is reported in early April and is significant in forming our corporate plan and direction for the coming year. Also contributing to the development of our plans are our operational and financial results, market and industry trends and analysis, and a SWOT analysis.

The corporate plan is distributed and communicated to our people by senior management in June-July. From this corporate plan base, our divisional business plans and budgets are developed. These plans contain the strategies for achieving our vision, values and goals, addressing corporate issues, and meeting our business projections and performance indicators.

This annual report is structured according to our goals and is the main vehicle for externally reporting progress against our corporate plan and SCI to stakeholders.

General managers provide progress reports against divisional plans to the Board on a monthly basis.

The strategic planning process is represented graphically below.

In addition, all our people participate in one annual performance development meeting and one annual review meeting, in which achievements

Board papers are circulated in advance and the CEO, Chairman and Board Secretary agree the agenda. Standing meeting items include:

• CEO report

• financial statements

• divisional updates.

The CEO attends all Board meetings and general managers are often called upon to present and discuss relevant issues.

Significant actions in 2005–2006 include:

• reduced premium rate from $1.55 to $1.43, then announced a further reduction to $1.20 effective 1 July 2006

• secured a strong investment return

• passed a resolution to give WorkCover people a 4% pay increase and improved leave policies as part of enterprise bargaining negotiations

• opened three new customer service centres.

Board AuditCommittee meetings meetings

A B A B

I Brusasco AM 9 10 - -

T A White AO 8 10 4 4

W P Ludwig OAM 9 10 - -

R W Monaghan 8 10 - -

H W Shand 10 10 4 4

H A Skippen 9 10 4 4

A: Numberofmeetingsattended B: Numberofmeetingsheldduringthedirector’sterminoffice

Directors


Figure 8

Consultstakeholders Conduct annual

planning withBoard andexecutivemanagementgroup, drivenby vision, valuesand goals

DevelopStatement ofCorporate Intentand corporateplan

Reviewdocuments forapproval bythe Minister

Developdivisional plansand budgets forapproval by theCEO and Board

Distribute andcommunicateplans to ourpeople

Annual report

Listen to ourcustomers(annual customersatisfactionresearch)

>Planningcycle Figure7


processes. This also includes ensuring an effective fraud and corruption control framework designed to foster awareness and discourage perpetration of fraud within the organisation.

This year the internal audit function was outsourced to Ernst & Young to achieve a more efficient allocation of resources, further independence from management and access to a broader range of audit, risk and internal control frameworks.

Internal audit has independent status within WorkCover, reporting operationally to the Board through the Audit Committee and administratively to the CEO. The internal audit charter, approved by the Audit Committee and endorsed by the Board, outlines its objectives, duties and authority. An annual audit program is developed through a risk analysis process. This is endorsed by the Audit Committee and approved by the Board.

Key achievements for 2005–2006 include:

• developed and implemented a quality assurance framework, including control self-assessment

• developed a three year strategic plan for internal audit

• developed and implemented an internal audit charter.

>RiskmanagementWorkCover has implemented a risk management policy based on AS/NZS4360:2004 – Risk Management that has established an appropriate infrastructure and culture designed to systematically identify, analyse, treat, monitor and communicate key risks associated with its activities. The risk management policy is part of the organisation’s philosophy, practices and business processes.

Risk analysis is conducted annually at the time of our corporate planning, and a risk register is reviewed and updated quarterly by the executive management group. Each division takes ownership for their section of the risk register and this is also updated at least quarterly.

The executive management group is responsible for monitoring risk management issues and internal audit reviews the monitoring framework

>AuditcommitteeWorkCover’s Audit Committee is governed by its own charter, which is approved by the Board. The committee consists of three directors—Harold Shand (Chairman), Helen Skippen and Terry White. The CEO, General Manager Finance, Board Secretary, internal audit (Ernst & Young) and external audit (Queensland Audit Office) attend the quarterly meetings, as do other senior WorkCover people as required. The committee has due regard for the Queensland Treasury Audit Committee Guidelines.

The Audit Committee assists WorkCover maintain strong and efficient accounting, administrative and operating controls. This is achieved by ensuring:

• effectiveness of internal and external audit functions

• compliance with accounting and corporate governance requirements

• adequate internal control frameworks

• timely reporting of any misappropriation, fraud or theft

• adequate risk management systems

• ethical standards.

Key achievements for 2005–2006 include:

• outsourced internal audit function to Ernst & Young

• endorsed internal audit three year strategic plan

• monitored progress of the implementation of International Financial Reporting Standards by the finance division.

>InternalauditInternal audit’s role within WorkCover is to support the Audit Committee in meeting its charter and to provide independent, impartial advice to senior management and the Board. This is achieved through systematic and disciplined evaluation of the effectiveness of risk management, controls and corporate governance


TheAuditCommitteeassistsWorkCovertomaintainstrongandefficientaccounting,administrativeandoperatingcontrols.

Internalaudit’srolewithinWorkCoveristosupporttheAuditCommitteeinmeetingitscharterandtoprovideindependent,impartialadvicetoseniormanagementandtheBoard.


interests, exercise due diligence and not use information or their position inappropriately.

In addition, the Australian Institute of Company Directors’ code of conduct has been adopted to provide guidance on carrying out duties and define standards of professional conduct. A register of directors’ material interests assists in avoiding conflicts of interest, and this is reviewed annually. Where conflict exists, the director involved does not receive the relevant Board paper and is not present when the item is considered.

WorkCover’s people are bound by the WorkCover Queensland code of conduct, adapted primarily from the Public Sector Ethics Act 1994. This was developed in a consultative manner to support WorkCover’s values and provide a framework for high ethical standards.

>ExternalreportingandaccountabilityAccess to information

WorkCover is a public authority under the Freedom of Information Act 1992 (FOI Act). This Act provides members of the community access to government information and documents. The Information Release Unit (IRU) administers the requirements of the FOI Act for WorkCover. In 2005–2006, WorkCover received 371 FOI applications.

Injured workers with a claim or their authorised representative can access a copy of their own file under administrative release in accordance with section 572 of the Workers’ Compensation and Rehabilitation Act 2003 (WCRA). The WCRA allows for certain information to be exempt from release.

on an annual basis. Outcomes from this year’s monitoring included:

• periodic reporting—linking risk reviews to quarterly reporting to the Audit Committee

• increased responsibility and accountability for risk issues to be resolved, for example, risk issues are now part of KPIs for senior WorkCover people.

Quality assurance

Our quality assurance programs provide assurance to management that the controls in place to manage risks are effective. As part of this, a system of control self-assessment is undertaken throughout WorkCover to assist in self-identification and mitigation of risk and control breakdowns. Outcomes from quality assurance checks are used to suggest improvements to our processes, policies and procedures.

>PoliciesandproceduresDelegations

Section 428 and 455 of the Workers’ Compensation and Rehabilitation Act 2003 gives the Board and CEO authority to delegate certain powers to appropriately qualified WorkCover people. Delegations and relevant documentation are reviewed and updated at least annually.

Communicating standards

The corporate induction program for new employees is held monthly, or on an as needs basis, and provides training and information on business divisions, policies and procedures. Existing employees receive regular updates to standards, industry trends and business progress through ‘team brief’ newsletters and meetings with management in which issues in the team brief newsletter are openly discussed every two months. In addition to the organisation wide team brief, each business division has its own newsletter designed to update our people on division specific operational issues, policy and procedure changes, business progress and any other relevant issues.

Our people are encouraged to join relevant professional bodies and access subscriptions to relevant information services to keep themselves and WorkCover abreast of the latest industry developments.

Ethical standards and code of conduct

WorkCover’s Board is bound by ethical standards outlined in the Workers’ Compensation and Rehabilitation Act 2003 to act honestly, disclose

Major reason for modification or denial:Informationwasidentifiedaspersonalaffairsofaninjuredworkerandthereleaseofthisinformationwasdeemednotinthepublicinterest.

Type No.

Number released without modification 9

Number denied applications 7

Number of withdrawn applications 33

Number released with modification 322

Total 371

>NumberofFOIapplications


Figure 9


about how WorkCover gives effect to each of the Information Privacy Principles outlined in IS42. An IS42 review, involving each business division within WorkCover conducting a self-assessment of their practices, was conducted during 2005–2006. This confirmed substantial compliance with IS42 across WorkCover.

Whistleblowers Protection Act 1994

WorkCover is a public sector entity as defined by the Whistleblowers Protection Act 1994. No disclosures under the legislation were received in 2005–2006.

>ComplianceprogramA corporate governance working party was established in 2005–2006 and is comprised of members from each business division. This group met quarterly to review and action WorkCover’s legal compliance register, which itemises legislation and standards that apply to our business. The working party has a forward focus and is responsible for proactively identifying emerging claim and other relevant trends.

Some of the items addressed by the working party in 2005–2006 include:

• IS40 recordkeeping

• AS ISO10002–2006 Customer satisfaction–guidelines for complaints handling in organisations

• finalised International Financial Reporting Standards.

IS40 recordkeeping

In February 2005, the Department of Public Works and Queensland State Archives (QSA) introduced a direction in accordance with the Public Records Act 2003, which outlines how public authorities must manage their records. There are two main goals—to implement a business strategy for compliant recordkeeping, and to implement an electronic Document and Records Management System (eDRMS). The deadline for compliance is December 2007.

In 2005–2006 our achievements in working towards full compliance in 2007 include:

• continued work with QSA to finalise Retention and Disposal Authority for WorkCover specific records

If access to requested information is refused, or granted only in part, the applicant can ask for a formal FOI decision, which gives access to an internal review of the decision by WorkCover, and an external review by the Office of the Information Commissioner.

This year we implemented a new employer administrative release policy for physical injuries. This policy has removed the application fee and streamlined the process for employers to access information more quickly. The information available for release is aligned with that releasable under the FOI Act.

As well as processing applications for information, the IRU delivers training to our people on information release and provides independent advice to the Board, senior management, our people and customers. This year the IRU presented information sessions at all staff induction courses and selected formal training courses.

During the year, the employer administrative release policy was reviewed to now include psychiatric and psychological claims. As part of this review, the IRU developed a training package for our managers to use when explaining the changes to their people. In 2006–2007, the process will be evaluated to ensure the changes are meeting the needs of our customers.

Complaints

Complaints are managed in accordance with AS ISO10002–2006 Customer satisfaction–guidelines for complaints handling in organisations, and this year we appointed a full-time person to manage complaints and compliments. In 2005–2006, WorkCover received 362 complaints. One hundred per cent of complaints received this year received a response.

Privacy and confidentiality

At WorkCover, the privacy and confidentiality of the personal information of our customers, stakeholders and other parties is vital. We are committed to protecting privacy through responsible collection, use, storage and disclosure of personal information, and employ a privacy officer to oversee privacy issues. We comply with the Queensland Government’s Information Standard 42 (IS42) and this year developed a privacy plan with detailed information

Wearecommittedtoprotectingprivacythroughresponsiblecollection,use,storageanddisclosureofpersonalinformation,andemployaprivacyofficertooverseeprivacyissues.



customer service centres where ESD design principles have been incorporated wherever possible. This focus will continue into 2006–2007.

With the drought continuing in Queensland, we have complied with level two and three water restrictions agreed to by a consortium of the Queensland Government, Brisbane City Council, SEQ Water and 12 regional councils. This has involved reduced garden watering, washing cars with buckets and cleaning all hard surfaces using dry methods.

• completed recordkeeping requirements document for use in acquiring eDRMS

• finalised the recordkeeping policy and continued work on the associated suite of policies and procedures

• formally assigned recordkeeping roles and responsibilities to our people through induction training, position descriptions and performance reviews

• continued networking with external parties in regard to recordkeeping compliance, e.g. with QSA through industry seminars and forums

• continued efforts to review and amend internal current practices and systems to meet recordkeeping compliance requirements

• restructured the network drive to align more closely with WorkCover’s Business Classification Scheme in Operations division

• WorkCover was selected as an industry representative in a statewide (QSA) reference group to contribute to the development of an overall e-Government recordkeeping policy.

>InvestmentThe Board reviews WorkCover’s investment strategy at least annually, and it is monitored on a monthly basis, with bi-monthly presentations to the Board by WorkCover’s fund manager, QIC. In 2005–2006 the Board chose to adopt a strategy to minimise exposure to volatile Australian and international investment markets by securing our mid year return for the duration of the year. This has proven successful, consistently returning near 14% per annum after fees. The impact of negative investment returns is minimised by an investment fluctuation reserve that underpins ongoing stability and certainty of premium rates. Refer to p. 36-38 for more detailed information about our financial management.

>EnvironmentalregulationWhile WorkCover is not subject to any significant environmental regulations, a working party continues to investigate ways to make our offices and operations more environmentally friendly. A primary focus this year has been on Environmentally Sustainable Development (ESD) particularly in relation to the fit out of our new

This year we changed our fleet cars from Holden Commodores to the smaller and more energy efficient Mazda 3’s. These cars use less fuel, saving WorkCover money in rising petrol costs, and contributing to a cleaner environment.

In 2006–2007, WorkCover will work with environmental architects to develop a program of environmentally sound practices to include refurbishments of existing offices. These practices may include refitting kitchens with water saving tapware and placing water meters on each floor to adequately monitor water use and quickly identify potential leaks and over-use.

Recycle bins continue to be used in WorkCover’s customer service centres throughout the state. Paper, printer cartridges and some other consumables are being recycled.

The Board believes that WorkCover Queensland has adequate systems in place for the management of environmental requirements as they apply to WorkCover, and is not aware of any breaches of these requirements.


ThereplacementofHoldenCommodoreswiththesmallerandmoreenergyefficientMazda3’ssavesWorkCovermoneyinrisingpetrolcosts.TimMcClymontmakesuseofthenewMazdaontheSunshineCoast.


Page reference >Targetsfor2005–2006

25, 29

30

31

33

34

34

35

32

38

20, 23

23

4, 6, 8, 24, 37

6, 22

25

9, 30, 31

37

Performance overview

>Goal Be a customer

focused insurer.

Assist with delivering effective return to work outcomes for injured workers.

Be an organisation of professional, committed people.

Maintain a financially viable fund, balancing the needs of injured workers and employers.

1

2

3

4

• We achieved our highest ever customer satisfaction rating of 76.5% —just short of our target, but a pleasing figure.

• Injured worker satisfaction 77%. • Aim for 77% satisfaction.

• Further communicate the process for early lodgement of claims, for example through the doctor fax fee initiative. Further reduce decision making timeframes.

• Make earlier decisions on common law claims by, for example, improving the actual investigations and encouraging the use of joint medical reports.

• This year we introduced initiatives to encourage early lodgement of statutory claims. We reduced our decision making time from 10 to seven days, and we now decide 80% of claims in 10 days or less (2004–2005: 75%). Common law claims for non-asbestos claims averages nine months, and settlement payments for these claims are now paid in three days, instead of the previous 19 days.

• Make the claims process faster and more efficient.

• Our achievement of 75.5% satisfaction was also just short of our target, but consistent with the trend over time, and we are pleased with this result.

• Employer satisfaction 77%. • Aim for 77% satisfaction.

• The average premium rate reduced from $1.55 per $100 wages to $1.43. From 1 July 2006, this further reduced to $1.20 and remains the lowest of any Australian state.

• Reduce the average premium rate paid by employers.

• Continue to provide excellent benefits to injured workers, at the lowest possible cost to employers.

• Be more accessible to our customers by opening new customer service centres in Townsville, Gold Coast, and Brisbane North, South, East and West in line with changing Queensland demographics.

• We restructured our business into a front and back office to give our frontline people a clear customer focus. We offered more face-to-face communication at our customer service centres, and a review of our case management practices reduced administrative work, allowing for more customer contact time.

• Increase time for face-to-face customer contact.

• Continue to review our work practices to identify efficiencies and allow more face to face contact with injured workers and employers.

• We reduced our decision making time from 10 to seven days, and we now decide 80% of claims in 10 days or less (2004–2005: 75%).

• Improve decision making timeframes. • Maintain high benchmark of 80% of claims decided in 10 days or less.

• We created a new role of ‘serious injuries case management advisor’, expanding the team who help seriously injured workers in the pre-discharge phase of their hospital care.

• Allocate more resources to serious injuries case management.

• Goal completed.

• We implemented a new strategy of regular, scheduled contact with medical providers in each customer service centre location.

• Regularly contact our frequently used medical providers to keep them informed of our processes, and gather their feedback for improvements to our service.

• Continue contact strategy with medical providers and expand contact to include allied health providers.

• Conduct formal customer satisfaction surveys with allied health providers.

• Collaborate with the Queensland Public Sector Union (QPSU) and Department of Industrial Relations (DIR) to finalise WorkCover’s enterprise bargaining agreement (EBA).

• Our new performance management system has less paperwork and administration, and now involves an informal review in February that focuses on professional development, and a more formal appraisal in July.

• Streamline the performance management system.

• Goal completed.

• We currently have 21 people participating in our new mentoring program for senior managers.

• Develop new leadership training options. • Expand monitoring program to other levels of management.

• Staff satisfaction target of 72%.

• Our premium rate remains the lowest of any Australian state at $1.43 per $100 wages. This rate reduced further to $1.20 at 1 July 2006.

• Retain the lowest premium rate in Australia. • Maintain the lowest average premium rate in Australia, with due regard for injured worker benefits.

• Quantify the impact of emerging claim trends on outstanding claims provision.

• This year we introduced voluntary health assessments for our people, and conducted a range of activities including seminars about nutrition, and access to discounted products to assist in quitting smoking.

• Introduce wellness program including voluntary health assessments.

• Offer voluntary health assessments to our people, to monitor progress.


>Werethesetargetsachieved? >Futuredirection• We achieved our highest ever customer satisfaction rating of 76.5%

—just short of our target, but a pleasing figure.• Injured worker satisfaction 77%. • Aim for 77% satisfaction.

• Further communicate the process for early lodgement of claims, for example through the doctor fax fee initiative. Further reduce decision making timeframes.

• Make earlier decisions on common law claims by, for example, improving the actual investigations and encouraging the use of joint medical reports.

• This year we introduced initiatives to encourage early lodgement of statutory claims. We reduced our decision making time from 10 to seven days, and we now decide 80% of claims in 10 days or less (2004–2005: 75%). Common law claims for non-asbestos claims averages nine months, and settlement payments for these claims are now paid in three days, instead of the previous 19 days.

• Make the claims process faster and more efficient.

• Our achievement of 75.5% satisfaction was also just short of our target, but consistent with the trend over time, and we are pleased with this result.

• Employer satisfaction 77%. • Aim for 77% satisfaction.

• The average premium rate reduced from $1.55 per $100 wages to $1.43. From 1 July 2006, this further reduced to $1.20 and remains the lowest of any Australian state.

• Reduce the average premium rate paid by employers.

• Continue to provide excellent benefits to injured workers, at the lowest possible cost to employers.

• This year we opened three new customer service centres—in Townsville, the Gold Coast and Brisbane East. Brisbane North opened 3 July 2006.

• Locate and open a site for a brand new customer service centre in Brisbane West.

• We restructured our business into a front and back office to give our frontline people a clear customer focus. We offered more face-to-face communication at our customer service centres, and a review of our case management practices reduced administrative work, allowing for more customer contact time.

• Increase time for face-to-face customer contact.

• Continue to review our work practices to identify efficiencies and allow more face to face contact with injured workers and employers.

• We reduced our decision making time from 10 to seven days, and we now decide 80% of claims in 10 days or less (2004–2005: 75%).

• Improve decision making timeframes. • Maintain high benchmark of 80% of claims decided in 10 days or less.

• We created a new role of ‘serious injuries case management advisor’, expanding the team who help seriously injured workers in the pre-discharge phase of their hospital care.

• Allocate more resources to serious injuries case management.

• Goal completed.

• We implemented a new strategy of regular, scheduled contact with medical providers in each customer service centre location.

• Regularly contact our frequently used medical providers to keep them informed of our processes, and gather their feedback for improvements to our service.

• Continue contact strategy with medical providers and expand contact to include allied health providers.

• Conduct formal customer satisfaction surveys with allied health providers.

• We were unable to finalise our EBA. So our people were not disadvantaged, the Board passed a resolution for a range of increased benefits.

• Continue negotiations with the QPSU and DIR to finalise EBA.

• Our new performance management system has less paperwork and administration, and now involves an informal review in February that focuses on professional development, and a more formal appraisal in July.

• Streamline the performance management system.

• Goal completed.

• We currently have 21 people participating in our new mentoring program for senior managers.

• Develop new leadership training options. • Expand monitoring program to other levels of management.

• Our staff satisfaction survey is now conducted biennially, so a measure will be available in 2006–2007.

• Aim for 72% satisfaction.

• Our premium rate remains the lowest of any Australian state at $1.43 per $100 wages. This rate reduced further to $1.20 at 1 July 2006.

• Retain the lowest premium rate in Australia. • Maintain the lowest average premium rate in Australia, with due regard for injured worker benefits.

• Reduce outstanding claims provision for latent onset injuries, as a result of legislative changes.

• Continue to monitor emerging trends and assess the impact on financial and other aspects of WorkCover’s business.

• This year we introduced voluntary health assessments for our people, and conducted a range of activities including seminars about nutrition, and access to discounted products to assist in quitting smoking.

• Introduce wellness program including voluntary health assessments.

• Offer voluntary health assessments to our people, to monitor progress.


Listeningtoourcustomers

• Establish customer service centres in key Brisbane locations—North, South, East and West.

• Reduce average premium rate paid by employers.

• Achieve customer satisfaction of 77% for injured workers and employers.

• Made the claims process faster and more efficient.

• Opened three new customer service centres.

• Reduced average premium rate from $1.55 to $1.43 per $100 wages, and announced a further reduction to $1.20, effective 1 July 2006.

• Highest ever injured worker satisfaction rate at 76.5%.

• 80% of claims decided in 10 days.

• Common law claim duration averages nine months.

• Reduced common law settlement payments to injured workers from 19 days to three days.

>Aimsforourcustomers

in2005–2006

>Majorachievements

forourcustomersin2005–2006

Be a customer focused insurer

Listening to our customers is one of the most important aspects of our business, and we have many ways in which we do this. We commission an independent research company to conduct annual customer satisfaction research. Through this research, we listen to over 1000 of our injured worker and employer customers who have had a compensation claim during the year. The research company makes personal phone calls to these customers and asks how satisfied they were with various aspects of their claim, and how they suggest we can improve our service. This year we extended our research to include doctors, medical practice managers and plaintiff lawyers. In 2006–2007, we will expand this further to include allied health professionals. We conduct regular focus groups with our major stakeholder groups, which are led by our CEO, and plan to continue these forums throughout the coming year.

On a less formal basis, our frontline people are empowered to listen to our customers and make decisions that deliver good service. We are an open organisation and offer various communication channels for customers—please read the section ‘How are we customer focused?’ on p. 22 for more information.

Abovephoto:RosieSakzewskihasbeenwithWorkCoverfor13yearsandworksinourcontactcentre,whichthisyeartookover300000callsfromcustomersthroughoutthestate.


people who don’t meet the criteria for accident insurance coverage. These people are usually self-employed. This year we registered 76 309 applications for compensation.

>Whatisourbusiness?WorkCover Queensland provides a safety net for employers and their workers who are injured at work.

WorkCover provides workers’ compensation benefits that can include weekly compensation payments, medical treatment costs (e.g. general practitioners), hospitalisation costs, travelling expenses, rehabilitation costs and lump sump compensation for any permanent impairment.

Queenslander’s who employ a worker are required by law to have a current workers’ compensation policy with WorkCover to cover their workers for a work-related injury, unless they are a self-insurer (please refer to p. 3 for more information about self-insurance).

Queensland workers have the right to apply for workers’ compensation no matter who or what caused their workplace injury. When they make this claim for compensation, this is called a statutory claim and it is a no-fault claim, meaning WorkCover does not apportion blame to either party. It is only if a claim progresses to common law that apportioning of blame may become relevant. In Queensland, less than 3% of statutory claims progress to common law.

>Whoareourcustomers?We provide over 146 000 employers with accident insurance coverage, and 43 000 policyholders with household workers’ insurance coverage each year. WorkCover also provides workplace personal injury insurance to 4 500

From these registrations, the following breakdowns apply.

0 2002 2003 2004 2005 2006

80

60

40

20

>StatutoryclaimregistrationsNumber (’000)

Figure 10

25-49 years59%

50 years or more20%

24 years and under21%

>Agebreakdownofclaimregistrations2005–2006

Female29%

Male71%

>Genderbreakdownofclaimregistrations2005–2006

Figure 11

Figure 12


Newstatutoryclaims Statutoryclaimspayments

2006 2005 2006 2005

Customerservicecentre No. % No. % $M % $M %

Brisbane Government 7 104 9.3 8 440 11.4 46.1 10.9 49.2 14.2

Brisbane North 8 603 11.3 6 676 9.0 40.3 9.6 30.2 8.7

Brisbane South 9 646 12.6 8 235 11.1 47.1 11.2 39.9 11.5

Brisbane West 10 453 13.7 10 455 14.1 55.1 13.1 41.6 12.0

Brisbane East 9 276 12.2 9 959 13.4 42.8 10.2 27.3 7.9

Gold Coast 7 003 9.2 7 205 9.7 37.3 8.8 33.0 9.5

Sunshine Coast 3 413 4.4 4 023 5.4 28.6 6.8 24.6 7.1

Toowoomba 5 159 6.8 4 872 6.6 24.7 5.9 20.6 5.9

Maryborough 3 319 4.3 2 907 3.9 22.0 5.2 16.9 4.9

Rockhampton 2 923 3.8 2 851 3.8 19.8 4.7 16.7 4.8

Mackay 3 415 4.5 3 079 4.1 21.5 5.1 15.7 4.5

Townsville 2 942 3.9 2 573 3.5 17.6 4.2 13.7 4.0

Cairns 3 053 4.0 2 938 4.0 18.1 4.3 17.3 5.0

Total 76309 100.0 74213 100.0 421.0 100.0 346.7 100.0

>StatutoryclaimsandpaymentsbycustomerservicecentreConsistent with Queensland demographics, our claims are spread throughout the state, with the majority in the Brisbane metropolitan area. Please note that some figures differ from those printed in our 2004–2005 annual report. This is due to the opening of new customer service centres this year. Last year’s results have been recalculated in line with our new service delivery model in order to generate a true year-to-year comparison. All claims payments in this report are gross figures.

Figure 13


so they can speak to their customer advisor when they want to.

To speak to WorkCover face to face, we have customer service centres throughout Brisbane and in the major regional centres of Queensland. This year we opened three new customer service centres in Townsville, the Gold Coast and Brisbane East, which offer state of the art facilities and easy access. A new centre in Brisbane North was also opened on 3 July 2006. It is a priority for our new centres to be close to public transport, have ample parking and be in a ground floor location with disabled access, as many of our customers have physical injuries.

Customers can also email us at [email protected], and we will respond within 48 hours.

For more general queries our web site at www.workcoverqld.com.au offers comprehensive information about WorkCover and is available 24 hours a day, seven days a week.

We want our customers to understand what we’re saying and what our processes are, so we write our forms, fact sheets, flyers, web site and letters in plain English. We annually review our communication to ensure the information we provide is accurate, that the language is right and that our customers have the latest information. All of our forms, fact sheets and flyers are available on our web site.

>Howarewecustomerfocused?We offer a range of communication methods

At WorkCover, we want to hear what our customers say and encourage our customers to give us feedback by having open lines of communication.

We have a 1300 telephone number that allows our customers to call us from a landline anywhere in Australia for the cost of a local call. We always answer the phone in person—we don’t have voicemail or voice recognition. This year our contact centre answered 308 925 phone calls, with 74% of these answered within 20 seconds. Our target is to answer 80% of calls in 20 seconds. This target was not quite achieved because this year we merged our two contact centres into one, resulting in more services being provided from one centre, and increasing the amount of time devoted to each customer call. We are implementing extensive training for our contact centre people to increase their product knowledge and ability to respond more quickly to customer enquiries. This target of 80% is based on an industry standard that includes calls answered by voicemail. Considering all our calls are answered personally, we are pleased with our achievement of 74%, but aim to meet out target in 2006–2007.

In addition to our contact centre, we make a point of giving customers our direct telephone numbers



2006 2005 2006 2005

Industryclassification No. % No. % $M % $M %

Accommodation, cafés and restaurants 3 951 5.2 4 335 5.8 17.4 4.1 18.6 5.4

Agriculture, forestry and fishing 1 957 2.6 2 033 2.7 19.2 4.6 15.0 4.3

Communication services 187 0.2 195 0.3 1.3 0.3 1.1 0.3

Construction 8 060 10.6 7 456 10.1 58.4 13.9 47.2 13.6

Cultural and recreational services 1 197 1.5 1 057 1.4 8.3 2.0 6.6 1.9

Education 2 307 3.0 2 342 3.2 12.3 2.9 10.0 2.9

Electricity, gas and water supply 519 0.7 535 0.7 2.6 0.6 3.6 1.0

Finance and insurance 513 0.7 505 0.7 2.8 0.7 2.3 0.7

Government administration and defence 4 849 6.3 4 618 6.2 26.9 6.4 25.8 7.4

Health and community services 7 716 10.1 7 770 10.5 41.3 9.8 34.5 9.9

Manufacturing 20 685 27.1 20 134 27.1 85.7 20.3 66.3 19.1

Mining 1 428 1.9 1 248 1.7 13.0 3.1 9.9 2.9

Personal and other services 3 506 4.6 3 697 5.0 22.7 5.4 19.0 5.5

Property and business services 5 478 7.2 4 968 6.7 26.2 6.2 21.5 6.2

Retail trade 5 725 7.5 5 482 7.4 27.2 6.4 21.0 6.1

Transport and storage 4 211 5.5 3 954 5.3 36.1 8.6 27.3 7.9

Wholesale trade 4 020 5.3 3 884 5.2 19.6 4.7 17.0 4.9

Total 76309 100.0 74213 100.0 421.0 100.0 346.7 100.0

>StatutoryclaimsandpaymentsbyindustryclassificationManufacturing and construction industries continue to register the largest number of claims, which is consistent with the physical nature of work undertaken in these industries.

Figure 14

Wewanttohearwhatour

customerssayandencourage

ourcustomerstogiveusfeedback

byhavingopenlinesof

communication.


make sure they know what their responsibilities are during the claims process. Our customer service centres regularly hold employer information sessions for local employers. At these we discuss the claims process, the premium formula and general information about WorkCover. In 2005–2006, we held 78 employer information sessions throughout Queensland.

This year we restructured our business, creating a front and back office in order to provide better service to our customers. The front office consists of our frontline people—those working directly with our customers in our customer service centres, while our back office comprises support staff including administration, human resources, finance, and information technology. For example, we centralised the administration component of the premium renewal process to our Operations Services area to ensure our customer advisors were able to focus on communication with our customers.

Within our structure, we also have a dedicated small team managing specific asbestos related claims. We recognise that these claims are unique and require specialist attention to help injured workers through the process and to gather information that will expedite their claim. For example, contacting unions to assist with employment history and asbestos exposure information. We also created an Application for Compensation—Asbestos Injury form, which asks for information that is unique to these types of claims.

Market research shows high customer satisfaction

We conduct annual market research surveys with our injured worker and employer customers. We ask about how they were dealt with by WorkCover, what communication was involved, how satisfied they were with the service they received, and we also request their feedback and suggestions for improvements to our process and communication approach.

This year we expanded our surveys to include doctors, medical practice managers, and plaintiff lawyers. We used the information collected in the surveys to develop our yearly business plan and strategies for improvement.

This year, our injured worker satisfaction of 76.5% was the highest since we began the surveys in 1998–1999. Our employer satisfaction level was 75.5%. These results almost meet our target of 77% and are consistent with our trend of steady customer satisfaction over time. These results are evidence of our philosophy to balance the needs of both injured workers and employers.

We structured our business to be more customer focused

We’ve listened to our customers and based on their feedback we have structured our business to focus on the needs of our injured worker and employer customers during the claims process. Managing claims for compensation for injured workers is the largest part of our service and we remain the only Australian state to manage all claims in-house. Our claims assessors and case management advisors are trained and empowered to make decisions and manage claims according to legislative requirements.

We have a dedicated workforce responsible for managing insurance policies and our relationship with individual employers who hold these policies. We offer premium forecasting to help employers budget for their premium payment and it is the customer advisor’s role to help the employer and

50 2002 2003 2004 2005 2006

80

70

60

55

65

Injured workersatisfaction

Employersatisfaction

Target

75 >Injuredworkerandemployersatisfaction%

Figure 15

Thisyear,ourinjuredworkersatisfactionof76.5%wasthehighestsincewebeganthesurveysin1998–1999.


Listeningtoourcustomersincludesarangeofformalresearch.Thisyear,AnitaSietasandAnnaLightfromourCommunicationUnit,coordinatedsurveysofinjuredworkers,employers,doctors,medicalpracticemanagers,andplaintifflawyers.Theresultsofthisresearchcontributetoourannualcorporateplanningandhaveadirectimpactonourcustomerstrategiesandthewayweconductourbusiness.


notification of the injury, allowing us to assess the claim and, if accepted, begin the compensation and rehabilitation process as soon as possible. Research shows the earlier this process begins, the sooner the injured worker is able to return to work, therefore the claim duration is shorter and less costly to the employer and to WorkCover.

Another example of our relationship building efforts is our ongoing work with plaintiff lawyers, who represent injured workers at common law. The relationship between a plaintiff lawyer and an insurance company is adversarial by nature, and has the potential to result in long negotiations and a drawn out process. However, our research this year revealed plaintiff lawyers believe WorkCover’s pre-proceedings and compulsory case conferencing is effective because WorkCover is realistic, reasonable, open to resolving and settling matters and is more effective at doing so than other similar insurers. This is positive for both injured workers and employers because when claims are settled before going to court, the injured worker receives a negotiated, acceptable payment faster and the employer avoids long, costly court cases.

>Whatdidweachieveforourcustomers?In 2005–2006, we achieved some significant outcomes for customers, including reducing the average premium rate, making decisions on claims faster, paying injured workers sooner, increasing our compliance measures to make the system fairer for all employers, and we made improvements to our claims process.

Reduced average premium rate

Every February we review our premium pricing and set our rates for the next financial year.

Building strong stakeholder relationships

Building strong relationships with our key stakeholders is one of our three corporate drivers (our Chairman and CEO discuss the importance of our corporate drivers on p. 7 and 9). Our stakeholders include injured workers, employers, industry associations, unions, medical providers and allied health professionals, and lawyers, and the State Government.

We listen to these stakeholders by conducting independent formal research, holding regular meetings and attending industry conferences and events. We also provide information to these stakeholders through regular publications such as our monthly WorkCover newsletter. There are positions within WorkCover dedicated to managing these relationships. For example, our Manager Customer Strategy leads a team that is the point of contact for unions and industry associations, and our Medical and Allied Health Unit contains specialists including our Principal Medical Officer who liaises with the medical community. Each of our customer service centre managers are responsible for building strong relationships with the stakeholders in their area, and have regular visitation programs with their local medical practices, members of parliament and others.

Not only are these relationships valued in their own right, but they help us deliver better customer service to our primary injured worker and employer customers. For example, on 1 July 2006 we introduced a new $10 fax fee incentive payment made to doctors who fax an injured worker’s Application for Compensation form with the Workers’ Compensation Medical Certificate and their invoice for service to WorkCover, within 24 hours of the consultation. When injured workers lodge this documentation with their doctor, WorkCover receives the earliest possible

Buildingstrongrelationshipswithourkeystakeholdersisoneofourthreecorporatedrivers.


MarkMurphyispartofourCustomerServicesdivisionandone

ofthemaincontactsforunionsandindustryassociations.Buildingstrongrelationshipswiththesekey

stakeholdersisoneofourthreecorporatedrivers.Webelievethat

buildingstrongstakeholderrelationshipswillmakethe

differencebetweenWorkCoverbeingconsideredagoodbusiness,

oragreatbusiness.


In 2005–2006 our average premium rate reduced from $1.55 per $100 wages paid, to $1.43. From 1 July 2006 this rate reduced even further to $1.20, remaining the lowest rate in Australia for the last seven years.

When calculating an employer’s premium rate, we use the Experience Based Rating system, which takes into account:

• any claims made against the policy in the last five years

• the size of the business

• the industry the employer works in

• F-factors (if applicable).

Significantly, there are no increases in Workplace Industry Classification rates from 1 July 2006, and F-factors have reduced or remained stable. This means employer premiums will remain as low as possible.

Making decisions and payments faster

This year we reduced the average time to register a claim from 16 minutes to 12 minutes. Though four minutes may not seem like much, it is a 25% productivity improvement, and registering claims more quickly, means they are available for decision making sooner. The average time it takes to decide whether to accept a claim has reduced from 10 days to 7 days, and we now decide 80% of claims in 10 days or less—a 5% improvement on 2004–2005. We are well ahead of our legislative requirements—the Workers’ Compensation and Rehabilitation Act 2003 allows us 40 days to make this decision.

Common law settlement payments reduced from 19 days to just three days this year, when we changed our process from a cheque based system through our panel lawyers, to electronic funds transfer (EFT) made directly to the injured worker’s solicitor.

Less common law claims proceeding to court

Less than 3% of statutory claims proceed to common law. We received 2 110 new common law claimants and 44 new asbestos related common law claimants this year, down from 2 400 and 70 respectively last year. Of the common law claims settled this year, 99.6% were settled before proceeding to court. These figures are significant because we believe if injured workers are satisfied with their benefits at a statutory level, they are less likely to proceed with a common law claim, and the reduced number of claims reflects an increased satisfaction at the statutory level. Of the injured workers that do commence common law proceedings, they are overwhelmingly settling before taking their case to court. We believe that this reflects a fair negotiation process between all parties during the case conferencing process.


Nonasbestos Asbestos Total

New claimants 2 110 44 2 154

Settled claimants 2 319 61 2 380

>Commonlawclaimants2006

No. %

Settled before court 2 370 99.6

Settled in court 10 0.4

Claimssettled 2380 100.0

>Nonasbestosandasbestosclaimssettled2006

Figure 18

Figure 17

2006 2005

Paymenttype $M % $M %

Statutoryclaims

Weekly compensation 180.2 25.1 156.6 25.0

Medical/rehabilitation 100.6 14.0 79.4 12.7

Lump sum 99.4 13.8 88.7 14.2

Hospital 30.6 4.3 12.3 2.0

Travel 5.4 0.7 4.1 0.6

Legal 4.1 0.6 5.0 0.8

Funeral 0.7 0.1 0.6 0.1

Grossstatutorypayments 421.0 346.7

Commonlawclaims

Settlement out of court 260.9 36.3 236.6 37.8

Settlement in court 0.7 0.1 1.8 0.3

Legal costs for defendants 30.7 4.3 34.7 5.5

Outlays for defendants 3.6 0.5 3.3 0.5

Legal costs for plaintiffs 1.8 0.2 2.8 0.4

Outlays for plaintiffs 0.2 0.0 0.5 0.1

Grosscommonlawpayments 297.9 279.7

Totalgrosspayments 718.9 626.4

>Statutoryandcommonlawpayments

Figure 19

0

80

60

20

40

<=5days

6-10days

11-20days

>20days

2005 2006

>Statutoryclaimsdecisions%This year we report our decision making timeframes in business days. 68% of claims are decided in five days or less, and 80% of claims are decided in 10 days or less.

Figure 16

Lessthan3%ofstatutoryclaimsproceedtocommonlaw.

Wenowdecide80%ofclaimsin10daysorless—a5%improvementon2004–2005.


A smaller claim form and more places to lodge it

This year we reviewed our most used document—our Application for Compensation form, and in simplifying it, halved its size. The form is now shorter and easier to complete, and from July 2006 can be lodged at any doctor’s office as well as direct to WorkCover or through the injured worker’s employer.

Tougher on compliance, a fair go for Queenslanders

In Queensland, workers’ compensation insurance is compulsory for all employers who employ workers, and the majority of workers and employers comply with this requirement. While we have always been active in making sure all Queensland employers do the right thing by declaring their true wages, and insuring all of their workers (as defined by the Workers’ Compensation and Rehabilitation Act 2003), this year we took further measures to improve the fairness of our system. We conducted 1 459 compliance audits and implemented new penalties and prosecutions for late or non-payment of premiums. We continue to investigate and examine information and interview witnesses to ensure injured workers comply with the legislation.

Reduced complaints

This year the Queensland Ombudsman’s office received 117 complaint enquiries about WorkCover, down from 134 in 2004–2005 and 165 in 2003–2004. We believe this reflects our ability to better resolve customer issues before they require escalation to a third party. Our people are empowered to make decisions and resolve issues as they arise. A full-time Complaints Advisor was appointed this year to internally coordinate formal responses to complaints and provide advice to managers and frontline people, to better satisfy customer needs. In addition, we keep a register of all customer complaints from which we can track any trends, and identify training requirements for our people, and improvements for our customers.


>OutlookIn 2006–2007 we will implement our customer care program, which involves regular contact with customers and stakeholders at a local level. We will hold a series of industry forums with industry associations, unions, doctors, medical practice managers, and lawyers to gather face-to-face feedback on our processes and better understand how these customers and stakeholders want to do business with us in the future.

We plan to make it easier for employers to pay their premium by offering a wider range of payment options; and further speed the claims process by implementing some new initiatives in the way we gather information about a claim.

Following through with our strategy to locate our customer service centres according to customer demographics, and where our resources will be most efficiently used, we will secure a location for a new Brisbane West centre.

0 2004 2005 2006

200

150

100

50

>ComplaintsaboutWorkCoverlodgedwithQueenslandOmbudsmanNumber

Figure 20

Ourpeopleareempoweredtomakedecisionsandresolveissuesastheyarise.

WorkCover Queensland Annual Report 2005–2006 ��

Listeningforrehabilitation

Assist with delivering effective return to work outcomes for injured workers

• A review of case management administrative practices to increase time for face-to-face customer contact and return-to-work planning.

• Create an additional position dedicated to managing seriously injured workers in the pre-discharge phase of their hospital care.

• Improve lodgement of application forms to reduce the delay between workplace injury and the start of effective rehablitation and return-to-work planning.

• Visit employers with their first ever workers’ compensation claim to increase their knowledge of the process and their obligations under the legislation.

• Regularly contact our frequently used medical practitioners and the associations that represent them to educate them on our processes and to get their feedback on our performance.

• Increased durable return to work rate to 84%, above the national average of 81%.

• Created a new serious injuries case management advisor position.

• Introduced a local relationship management strategy for medical providers.

Abovephoto:CassRoseworksdirectlywithinjuredworkersandmanagestheirindividualclaimsforcompensation,whichoftenincludesdevelopingrehabilitationandreturntoworkplans.DavidVargaandhisteamofmedicalandalliedhealthprofessionalsprovideadvicetoourcasemanagementareas.

Rehabilitation is a joint effort that involves the injured worker, their employer, doctors, health providers and WorkCover. Every situation is unique and we need to listen closely to all of these parties for rehabilitation to be successful. This year we have increased the time our people have for face-to-face communication with customers and for case conferencing with doctors, which speeds the rehabilitation process.

Doctors and allied health professionals work directly with our injured worker customers and give advice on treatment options that will help these people return to work as quickly and safely as possible. Listening to these professionals is a key step in the process for returning an injured worker to the workforce. One resounding message we’ve heard over the years is that early intervention in an injury, and early treatment, is the most important thing we can do to speed the process for return to work, minimising lost time and minimising costs for all parties. We’ve listened to this message and throughout this section of the report you can read about the initiatives we’ve taken to improve this early intervention.

We’re listening …

>Aimsforrehabilitation

in2005–2006

>Majorachievements

forrehabilitationin2005–2006



2006 2005 2006 2005

Injurynature No. % No. % $M % $M %

Burns 1 692 2.2 1 571 2.1 4.5 1.1 3.0 0.9

Contusion 6 221 8.2 6 606 8.9 16.2 3.9 12.4 3.6

Deafness 528 0.7 544 0.7 2.7 0.6 2.8 0.8

Diseases of the skin and subcutaneous tissue 633 0.8 456 0.6 1.8 0.4 1.0 0.3

Dislocation 572 0.8 416 0.6 6.1 1.5 3.7 1.1

Disorders of muscles, tendons and soft tissue 24 730 32.4 2 819 3.8 75.5 17.9 9.5 2.7

Foreign body 3 650 4.8 3 083 4.2 1.7 0.4 1.5 0.4

Fracture 5 133 6.7 4 516 6.1 66.7 15.8 52.2 15.1

Hernia 1 569 2.1 866 1.2 11.8 2.8 5.7 1.6

Mesothelioma/asbestosis* 616 0.8 225 0.3 25.4 3.7 23.0 6.6

Multiple injuries 159 0.2 204 0.3 8.5 2.0 9.5 2.7

Nerve root and plexuses disorders 708 0.9 514 0.7 6.1 1.4 3.5 1.0

Open wound 10 626 13.9 10 735 14.5 21.3 5.1 17.5 5.0

Other diseases 8 454 11.1 1 117 1.5 30.4 9.6 4.9 1.4

Other injuries 2 622 3.4 2 546 3.4 26.9 6.4 18.6 5.4

Psychological injuries 2 288 3.0 2 485 3.3 35.9 8.5 33.9 9.8

Strain/sprain 4 823 6.3 33 548 45.2 77.3 18.4 142.0 41.0

Superficial injuries 1 285 1.7 1 962 2.6 2.2 0.5 2.0 0.6

Total 76309 100.0 74213 100.0 421.0 100.0 346.7 100.0

>StatutoryclaimsandpaymentsbyinjurynatureRegistration of injury nature has changed this year as a result of the National Occupational Health and Safety Council’s expansion of classification codes. In 2004–2005 there were 47 classification codes and in 2005–2006 this expanded to 92 codes. As a result, regulatory reporting standards required us to make significant changes to the way we register injury nature. This accounts for the large differences between 2004–2005 and 2005–2006 figures. It is not possible to create a true year-to-year comparison.

* The increase in mesothelioma/asbestosis claims is due to increased publicity this year about asbestos. The figure of 616 includes claims lodged and ‘report only’ notifications, which are not yet claims.


2006 2005 2006 2005

Injurylocation No. % No. % $M % $M %

Ankle 3 440 4.5 3 130 4.2 14.1 3.4 11.2 3.2

Back 15 112 19.8 14 534 19.6 70.3 16.7 61.3 17.7

Ear 766 1.0 813 1.1 3.3 0.8 3.4 1.0

Elbow 1 754 2.3 1 744 2.3 8.1 1.9 6.6 1.9

Eye 4 478 5.9 4 097 5.5 3.5 0.8 2.7 0.8

Foot and toes 2 536 3.3 2 320 3.1 10.5 2.5 7.5 2.2

Hand and fingers 13 045 17.1 12 623 17.0 38.2 9.1 29.2 8.4

Head and face 2 993 3.9 3 159 4.3 17.3 4.1 11.7 3.4

Hip 379 0.5 377 0.5 2.3 0.5 2.4 0.7

Knee 5 022 6.6 4 788 6.4 34.6 8.2 25.3 7.3

Lower limbs 3 159 4.1 2 964 4.0 17.9 4.3 14.3 4.1

Multiple locations 733 1.0 1 364 1.8 13.9 3.3 12.1 3.4

Neck 3 946 5.2 3 758 5.1 17.6 4.2 14.3 4.1

Shoulder 5 778 7.6 5 477 7.4 46.8 11.1 37.1 10.7

Systemic 2 842 3.7 3 232 4.4 41.7 9.9 38.0 11.0

Trunk other 4 228 5.5 3 799 5.1 45.2 10.7 41.2 11.9

Upper limbs 2 636 3.5 2 724 3.7 13.6 3.2 11.4 3.3

Wrist 3 462 4.5 3 310 4.5 22.1 5.3 17.0 4.9

Total 76309 100.0 74213 100.0 421.0 100.0 346.7 100.0

>StatutoryclaimsandpaymentsbyinjurylocationBacks, followed by hands and fingers, continue to be the most common injury locations.


Figure 21

Figure 22


at the end of the program. If a worker is unable to return to their job because of their work injury, WorkCover will discuss options with them and their employer.

>Whatdidweachieveinrehabilitationandreturntowork?Above average return to work rate

The Workplace Relations Ministers’ Council’s Comparative performance monitoring report (November 2005) uses figures based on 2003–2004 data from all Australian workers’ compensation schemes. WorkCover Queensland compares very favourably on most key comparative items—notably average premium rates, claims durations, durable return to work, disputation rates and assets/outstanding claims liabilities.

Durable return to work refers to workers who had returned to work either fully or partially and were in a paid job at the time they were surveyed. Queensland’s durable return to work rate increased to 84%, which is above the national average of 81%. Return to work at the end of a claim was also maintained above the national average at 88%.

>Whatisrehabilitation?Rehabilitation is the process of helping you return to your former health. It is sometimes called occupational, vocational or workplace rehabilitation and can include treatment from a range of health providers, assessments of work capacity and suitable duties programs.

The aim of rehabilitation in the workers’ compensation scheme is to help you back to your former health and back to work. This year we assisted workers with a range of injuries, which are categorised in the tables opposite.

>Whatisreturntowork?Once you’ve had rehabilitation, you may participate in a return to work program. This looks at the duties you performed at your workplace before your injury and what you are capable of after your injury. You may need new training or take a new job to return to work. Sometimes you even return to work with a different employer.

Under the Workers’ Compensation and Rehabilitation Act 2003, workers and employers must take every reasonable step to participate in rehabilitation and return to work programs. The purpose of rehabilitation is to ensure the worker’s safest and earliest possible return to work or to maximise their independence.

Who benefits?

Rehabilitation has many benefits for both injured workers and employers. It is a joint effort that involves workers, employers, doctors, health providers and WorkCover Queensland.

For the injured worker, rehabilitation has many benefits including:

• helping to recover as quickly as possible

• helping to return to work safely

• reducing impairment from injury

• minimising disruption to their home, social and working life.

Employers also achieve better outcomes by being involved in rehabilitation. The disruption caused by having an employee absent or unable to perform set duties can impact on a workplace’s productivity. Employer participation in rehabilitation (either through a rehabilitation and return to work coordinator or another person) can:

• reduce staff turnover

• improve staff morale and workplace industrial relations

• minimise retraining expenses

• reduce claims costs

• help an injured worker return to the workplace.

How long rehabilitation takes is different for each injury and each person, however the majority of workers who participate in rehabilitation programs are able to return to work with their employer

0

100

75

25

50

2000 2001 2002 2003 2004

Qld NSW Vic SA Tas NT Comcare Aust.Average

>Durablereturntoworkrate%

Figure 23

Queensland’sdurablereturntoworkrateincreasedto84%,whichisabovethenationalaverageof81%.


The way we measure return to work is slightly different to the above report. This year, at the time their claim was closed, 95.2% of injured workers had returned to work, either with their same employer or a different employer, and either in their same job or a different one. This was just short of our target of 96% return to work.

Earlier decision making means faster return to work

We know the sooner an injured worker lodges their application form, if accepted, the sooner the worker has access to effective rehabilitation and return to work planning. In 2005–2006 we investigated options to decrease the delay between a workplace injury and the start of rehabilitation. As a result, we are placing

DrMattLee-ArcherworksinourMedicalandAlliedHealthUnitandgivesadvicetoourpeopleaboutmedicalconditionsandtreatment.

Source: Comparitive performance monitoring report (November 2005).


WorkCover is here to help them through the process. This year we focused on increasing the time our case managers have to provide this help.

As part of our review of case management practices we undertook a three month pilot in three customer service centres. During the pilot we introduced more verbal communication and less reliance on documentation and letters. The pilot resulted in positive feedback from our case management people that they had more time for customer contact. Given the successful pilot outcomes, these initiatives were rolled out statewide in April.

The review also resulted in us implementing better and faster ways to exchange information with doctors. One example of this is case conferencing. A case conference is a face-to-face or telephone meeting in which WorkCover and the doctor discuss the claim and the best medical treatment options to help the injured worker return to work. A plan is decided upon and actioned much faster than if WorkCover was to send a written request for a doctor’s report, wait for the report, and then develop and action the plan.

We also focused more on vocational assessments and where appropriate, re-training injured workers to achieve return to work.

In line with our focus on increasing our face-to-face communication, our customer advisors now visit employers with first time workers’ compenstion claims to help them through the process and increase their knowledge of the process and their obligations under the Workers’ Compensation and Rehabilitation Act 2003.

New serious injuries case management advisor

This year, over 76 000 Queensland suffered an injury at work. These injuries range from minor cuts and bruises to serious injuries—for example, those which result in quadraplegia or tetraplegia. For these more serious injuries, we have a small team of people who are dedicated to managing seriously injured workers in the pre-discharge phase of their hospital care.

Application for Compensation forms at doctors surgeries, and encouraging workers to lodge these forms with the required Workers’ Compensation Medical Certificate via their doctor’s surgery. This means as soon as their entitlement to compensation arises, the worker’s form should be lodged immediately, greatly reducing the time between injury and rehabilitation. (See p. 25–26 for more information about decision making timeframes and lodging with doctors.)

Host employment

Ideally, the injured worker will return to work with their previous employer, but this is not always possible. If return to work with the same employer is not a possibility, either short term or permanently, WorkCover proactively strives to identify this early and provide innovative employment solutions.

A ‘host employer’ is an employer who agrees to have an injured worker at their workplace when the worker is unable to participate in rehabilitation with their original employer. WorkCover pays the worker’s wages when they participate in a host suitable duties program with a host employer. These programs normally run for three to six weeks. A host employer does not have to employ a person after their program has ended.

In 2005–2006 WorkCover placed 547 injured workers with over 400 Queensland based host employers. The injured workers who participated in host placements came from diverse backgrounds, originating from 199 different types of Queensland industry. These industry types are based on our workplace industry classification codes used to classify which industry an employer belongs to for premium calculation purposes.

Improved case management practices

As each of our injured workers is unique in their circumstances and their injury, each person’s rehabilitation program will be different as it is designed specifically for their needs. We understand that suffering an injury can introduce major changes to an injured worker’s life and


Weunderstandthatsufferinganinjurycanintroducemajorchangestoaninjuredworker’slifeandWorkCoverisheretohelpthemthroughtheprocess.

Webelieveface-to-facecommunicationisimportant,andthisyearwereviewedourcasemanagementadministrationpracticestoincreasetimeforface-to-facecustomercontactandreturntoworkplanning.ChristieElssmannisaClaimsAssessoratournewBrisbaneEastcustomerservicecentre.

In2005–2006WorkCoverplaced547

injuredworkerswithover400

Queenslandbasedhostemployers.


information about WorkCover and discussed their interaction, and current satisfaction, with WorkCover and areas for improvement. Each provider told us when and how they want to be contacted by WorkCover, and this will guide how we interact with them in future. The majority of feedback was positive and these responses were further supported by our independent surveys of local doctors and medical practice managers.

Faster payments to medical and allied health providers

Medical and allied health providers are an integral part of an injured worker’s rehabilitation and return to work, so ensuring these relationships are well managed is very important to WorkCover. These stakeholders told us prompt payment of invoices is of great importance to the way they run their business, and how they feel about interacting with WorkCover. Initiatives in this area in 2005–2006 included increasing the number of payment runs from one to two per week and centralising the processing of accounts to Brisbane. This resulted in all accounts being paid within seven days, as per our service charter implemented last year.

Participation in Q-COMP medical services review

This year we were represented on subcommittees of the Q-COMP medical services review. The purpose of these subcommittees was to review matters relevant to medical practitioners, proactively facilitate discussion and resolve issues, for example, medical certificates, reports, rehabilitation, and up-front payment of services before a claim is accepted. The outcomes of this review were positive.

>OutlookIn 2006–2007 we will expand many of our current strategies. For example, our relationship building strategy will expand to include our most frequently used general practitioners, and include allied health professionals. Our return to work rate remains a top priority, and we will again aim to return 96% of injured workers to work at the time their compensation claim is closed.

Fast decision making and more verbal communication between all parties involved in the claim will be a significant focus in the coming year. This means we will increase our use of case conferencing with doctors, and in response to feedback from injured workers, we plan to dedicate more time and resources to educating employers and getting them involved in the rehabilitation and return to work plans for their injured workers. This will include more education forums for employers and encouraging employers to have more direct involvement in case conferencing.

We created an additional role of serious injuries case management advisor to reflect the increasing importance of face-to-face contact with our injured worker customers. The advisor visits the injured worker in hospital and works with them and their family to assist them through the claims process and discuss their rehabilitation options, as these are usually more complicated and involved than those of most injured workers. For example, the serious injuries case manager has assisted injured workers to have modifications made to their car and home to provide wheelchair access, and also with the sourcing and acquisition of their often extensive requirements for equipment, such as wheelchairs.

Scanning claim files reduces retrieval time

This year we commenced scanning all 580 000 closed statutory claim files from 1998–2005. Within nine months this project was 57% complete and on track for finalisation in December 2006. What this means for customers is that retrieval times for file requests has reduced from four hours to an average of 30 minutes. When our people can access information quickly, they can act on customer enquiries faster and more efficiently. For example, retrieving information about previous rehabilitation and return to work outcomes for an injured worker can speed the decision making and rehabilitation planning for any new claims.

>BuildingrelationshipswiththemedicalcommunityAttendance at conferences and events

This year we attended a range of conferences and events to speak face-to-face with the medical community in order to understand the issues that are of importance to them and inform them about WorkCover. For example, at the External Medical Officers’ conference on the Gold Coast, we met with over 250 local and interstate providers and discussed issues including mental health, chronic pain and occupational dermatitis. We also participated in a variety of specialist meetings such as the annual meeting of the Queensland Hand Society where we met with surgeons and therapists to study the legal and medical issues surrounding occupational hand injuries.

We met regularly with the state representatives of the Division of General Practice, College of General Practitioners and College of Psychiatrists to encourage communication and possible joint injury education initiatives.

New relationship building strategy at local level

In October we implemented a new strategy of regular, scheduled contact with medical providers in the local area. Our customer service centre people visited their local providers, distributed



Listeningtoourpeople

• Satisfaction rate of 72%.

• Collaborate with the Queensland Public Sector Union (QPSU) and Department of Industrial Relations to finalise new enterprise bargaining agreement (EBA).

• Implement new performance management process to reduce time spent on paperwork and increase the time available to concentrate on personal development.

• Introduce wellness program incorporating voluntary health assessments.

• Develop new leadership development training options.

• Despite being unable to formalise the new EBA, implemented 4% pay increase and range of improvements to employment conditions.

• Successfully implemented new, simplified performance management process.

• Introduced wellness program.

• Introduced mentoring program for managers.

• Implemented new payroll system including an improved online management system for our people.

>Aimsforourpeople

in2005–2006

>Majorachievements

forourpeoplein2005–2006

Be an organisation of professional, committed people

WorkCover’s human resources initiatives are developed and implemented for a number of reasons, most importantly, they are based on the needs and wants of our 970 people. We listen through our staff satisfaction surveys, regular group meetings and on an individual level. Feedback is passed through our organisation structure in performance management and development meetings, quarterly team brief sessions, training programs and WorkCover’s consultative committee (comprising union delegates and senior human resources people, this committee meets regularly with the QPSU).

We have been conducting staff satisfaction surveys for six years and over that time have found that results have remained fairly consistent year to year. As a result, this year we decided to adjust the timing of our staff satisfaction surveys and in future conduct them biennially. We believe that this revised timetable will still yield the valuable results we need to continue delivering what our people need and want from their employer.

Abovephoto:Webelievefitandhealthypeoplearehappierandmoreproductiveatwork,andournewwellnessprogramreflectsourcommitmenttohelpingourpeopleachieveahealthylifestyle.JanineReidworksinourCommonLawdivisionandregularlyusesthegymlocatedinourBrisbaneoffice.


hours of 8.30am–4.45pm. An outcome of our EBA negotiations was to allow individuals to manage their work hours to guarantee the accrual of one day off work in a four-week cycle if they choose.

The banked time system has the added benefit of allowing individuals and managers to effectively manage workloads and minimise overtime to ensure productivity is focused during work hours. We also believe the banked time system reduces absenteeism by giving our people the freedom to take one day per month away from work to attend to their personal lives.

>CreatingahappyworkplaceTo provide the best possible service to our customers, it is vital our people are happy at work and feel valued. We strive to be an employer of choice and our low attrition rates show our people are staying at WorkCover longer. This means we are retaining knowledge and skills and our people are satisfied in their roles.

Several actions and initiatives at WorkCover contribute to our happy workplace including our commitment to industrial relations; staff recognition programs; an understanding of work/life balance, reflected in flexible working conditions, our gym and new wellness program; and the Infocus staff newsletter. Our remuneration is also very competitive.

Commitment to industrial relations

Our EBA expired on 30 September 2005. Though negotiations between WorkCover and the Queensland Public Sector Union (QPSU) to formalise a new agreement began, unfortunately, the current environment of workplace legislation change resulted in no agreement being formalised. We did not want our people to be disadvantaged by this so we worked with the QPSU and WorkCover Board to pass a resolution for a range of increased benefits. These benefits include a 4% pay increase effective 1 October 2005, increased maternity or adoption leave provisions from six to 12 weeks, purchased annual leave up to six weeks, the option to take annual and long service leave at half pay, and access to long service leave entitlements after seven years instead of the previous 10 years.

More regular recognition of our people

This year, at the whole-of-organisation level, WorkCover’s recognition awards program rewarded our people for contributions considered above and beyond their normal role. For example, one award this year was presented for designing a database to streamline the issuing of employer reports; another for introducing a customer visitation program in the Sunshine Coast area.

Informal staff recognition programs also exist within many areas of WorkCover. Our review of the motivational impetus provided by these informal programs has led us to review the awards structure. From 2006–2007 we will move away from our whole-of-organisation recognition programs in order to channel these resources into supporting informal programs. We believe that this approach will enable local management teams to provide timely and appropriate recognition of achievement to their people.

Creating a better work/life balance

WorkCover has long had a banked time system, which allows our people to accrue ‘banked time’ when they work overtime or outside their normal


Customerservices58%

Operations 17%

8%

Common law 6%

Finance 8%Human resources 2%

Informationtechnology

Executive services 1%

0 2002 2003 2004 2005 2006

15

10

5

0 2002 2003 2004 2005 2006

4

2

1

3>Absenteeism

%Our absenteeism rate remains low at 2.9%, and below our external benchmark of 3.27%.

Figure 26

>Attritionrate%Our attrition rate of 10.6% has remained stable for several years and pleasingly, is below our external benchmark of 14.6%.

Figure 25

>Employeesbydivision2006In 2005–2006, WorkCover had 970 full time equivalent roles across seven divisions. The Customer Services division is the largest in WorkCover, and involves the most face-to-face contact with our injured worker and employer customers.

Figure 24

Toprovidethebestpossibleservicetoourcustomers,itisvitalourpeoplearehappyatworkandfeelvalued.

Thisyearweimplementedanewpayrollsystem,includinganimprovedonlinemanagementtoolforourpeople.GraemeWoodsworksinourHumanResourcesdivisionandexplainsthenewsystemtoHayleyBushellfromExecutiveServices.


The health assessments measured areas including smoking, weight, cholesterol levels, physical activity, blood pressure, and stress.

Activities in the wellness program included seminars, mostly based around different aspects of nutrition, and access to discounted products to assist in quitting smoking. In 2006–2007, we will expand the seminar program and offer the voluntary health assessments again. This will allow our people to track the progress they have made since their first assessment.

We also have a gym in our Brisbane CBD building and encourage participation in the Bridge to Brisbane Fun Run.

Infocus newsletter

Infocus is a bi-monthly newsletter designed to encourage networking and relationship building among our workforce located in various geographic locations. Our people are encouraged to contribute articles and stories that demonstrate our values of excellence, integrity, responsiveness and respect, in all aspects of life. Focus groups held in Brisbane last year encouraged our people to contribute ideas and gave an insight into what our people want from a staff newsletter. This information, plus regular reader feedback has enabled us to continually improve Infocus.

We practice what we preach

As the largest provider of workers’ compensation insurance in Australia, we take great pride in keeping our own workplace safe and healthy. In 2005–2006, our high standards were maintained with an incident rate of 1.84 for every 100 employees. The lost time injury rate was 0.15% of total available working hours.

In addition to our wellness program to support the health of our people, we again offered onsite flu vaccinations before winter.

>EqualityanddevelopmentStreamlining performance management and development

As a result of listening to our people’s feedback, we have changed our approach to our staff review process. Previously we undertook formal biannual reviews. When our people told us the performance management and development process was time consuming and hindered by paperwork, we formed a working party with people from all divisions to collaborate on changes to the process. This resulted in the change to one formal review in July and altering the focus of our interim reviews in February to professional development planning. We feel the start of the calendar year is a positive time and our people are naturally setting development goals for the coming year. Feedback so far indicates we have met our goal to streamline the process, reduce paperwork, encourage discussion and construct development plans.

Offering flexible working conditions

We receive a number of requests for part-time work, for example, from people returning from maternity leave. As many of our roles require an ongoing relationship with our customers as a rehabilitation program is conducted, we have trialled a number of variations on how best to meet these requests for part-time work options and at the same time maintain our high levels of customer service delivery. We now have 51 permanent part-time positions in our total workforce of 970, and are trialling options including job sharing and reduced customer portfolios.

New wellness program for a healthy workforce

This year we introduced voluntary health assessments for all WorkCover people because we believe fit and healthy people are happier and more productive at work. Four hundred and fifty five of our people undertook these assessments, with 80% of our attendees rating the assessments as ‘good’ or ‘excellent’.

The key aims of the wellness program are for our people to:

• have an increased awareness of their personal health and body

• increase motivation for leading a healthy lifestyle

• identify any current lifestyle habits that, if left unattended, may lead to serious injury or illness

• adopt a healthy lifestyle and therefore a healthy mindset.


0 2002 2003 2004 2005 2006

6

4

2

>Part-timepositions%The number of part-time positions at WorkCover has increased as we try to be more flexible as an employer.

Figure 27

Female73%

Male27%

>Genderofourworkforce2006The majority of our people are women.

Figure 28

0

100

75

25

50

Female Male

Executive(contract)

Grade1

Grade2

Grade3

Grade4

Grade5

TotalBoardmember

>Genderofourworkforcebypaygrade2006 %

Figure 29


Our intention is to provide a blended learning strategy, combining formal training, on the job learning and self-directed e-learning methods to suit all learning styles.

Tertiary study

In conjunction with Griffith University, we offer our people three fully funded graduate certificate programs—Case Management, Professional Legal Studies, and Business. Case Management was first offered in 2000 and 113 WorkCover people have graduated from this course, with another 40 currently enrolled. Professional Legal Studies was new in 2005 and there have been three intakes, with a total of 72 people currently enrolled. The first intake will graduate in December 2006. The Business certificate was also first offered in 2005 and there are 16 people currently enrolled.

We also offer a study assistance program which gives eligible people leave and financial assistance to complete tertiary study, reimbursing up to 75% of fees on successful completion of course work. This year 41 people participated in this program.

>ChangemanagementWorkCover has undergone some internal restructuring this year. The objective of this change was to ensure our internal structure matched our external customer needs. Most significantly, a new Operations division was created, and the Statutory Claims and Underwriting divisions were amalgamated into one Customer Services division. The change was also driven by a streamlining of procedures that resulted in increased efficiencies and reduced staffing requirements. Prior to any changes taking place, our senior managers gave formal presentations to our people to explain the reasons for the change, what would change, and when this would occur.

>OutlookIn 2006–2007 we will conduct a staff satisfaction survey, aiming for a result of 72% satisfaction. We will aim to formalise a new EBA and will support staff recognition programs at a local level. Offering more education seminars and voluntary health assessments for our people will expand our wellness program. We will also expand our mentoring program to lower levels of management.

Leadership development

In 2005–2006 we partnered with Griffith University to introduce a cross-divisional mentoring program for senior managers. The CEO and each general manager has two people they mentor in order to assist the mentees to build more intuitive leadership skills.

The matching process used by Griffith University concentrates on matching the expectations of mentees with the skills and experiences of mentors. The program is designed to run formally for approximately six months but it is likely that some mentoring relationships will continue beyond the official life of the program.

We currently have 21 people participating in the mentoring program. During 2006–2007 we plan to expand the program to other levels of management. Our goal is to have people who were mentees at the beginning of the program become mentors themselves as the program progresses.

Our relationship with the Mt Eliza Centre for Executive Education continues for the professional development of our frontline leaders. During 2005–2006, 35 participants completed the Diploma in Business (Front Line Management)—176 of our people have completed this program since it began in 1999.

>TrainingparticipationCustomer service training

This year, nine customer service training programs were conducted for 105 of our people. Another 86 attended programs relating to ‘critical customer confrontations’. These training strategies continue to provide the necessary skills to provide excellent service to our customers. Other professional development programs delivered on an ad hoc basis were ‘training small groups’, ‘coaching skills’ and ‘time management’.

Technical training

Over 570 of our people attended technical training programs during 2005–2006. These programs included statutory claims introduction, induction training for new employees, role specific courses, premium training, statement taking, and effective thinking and problem solving courses. A highlight of the year was the introduction of a tailored program for senior case managers and assessors. Sixty people attended this program and the feedback was positive.

A significant level of training has been provided in our new Operations division. A course providing an overview of statutory claims was delivered to almost 80 of our people and a premium induction program was delivered to approximately 40 people.

For 2006–2007 we are investigating options to provide more self-learning technical modules.


WorkCoveroffersarangeofcustomerserviceandtechnicaltraining,aswellasgeneroussupportforrelevanttertiarystudy.Here,oneofourin-housetrainers,JennyLisha,ispresenting‘Compass’trainingtonewstaff.ThiscourseprovidesafoundationforthoseenteringtheCustomerServicesdivision.


>FinancialresultsSeveral external factors have impacted on our financial results.

When we conducted our employer premium assessments this year, we found that wages growth in Queensland had significantly increased compared to historical weekly earnings experience. Therefore, we collected more premium revenue than we had forecast.

Strong performances in financial markets both this year and last year resulted in our actual investment returns being much higher than the average long-term returns for balanced funds.

The Queensland Government made a decision to change the legislation surrounding latent onset injuries. Under the Workers’ Compensation and Rehabilitation Act 2003, latent onset injuries such as those caused by asbestos exposure are now deemed to have an injury date when first diagnosed by a medical practitioner. The previous approach was to consider the date of injury to be the date at which the claimant was exposed to asbestos; that is as long as 40 years prior to diagnosis. This change in legislation has significantly impacted the outstanding claims reserves held by WorkCover. It changes the nature of WorkCover’s liability in relation to such injuries such that outstanding claims estimates are only required for those injuries that have been diagnosed but not settled. This means that instead of setting aside large sums for asbestos related

• Maintain a fully funded position that allows an appropriate balance between worker benefits and employer premiums.

>Aimforfinance

in2005–2006

>Majorachievements

forourcustomersin2005–2006

Maintain a financially viable fund, balancing the needs of injured workers and employers

In2005–2006,WorkCovercontinuedtomaintainafullyfundedequityposition,whileatthesametimeannouncingasignificantreductiontotheaveragepremiumrateforemployersandincreasingbenefitspaidtoinjuredworkers.

Abovephoto:WorkCovercomplieswithAustralianequivalentstoInternationalFinancialReportingStandardsandthosesetbytheAustralianPrudentialRegulationAuthority.Thisyear,BethGarvisandEdwardVerhagehavebeenintegralinmakingsureWorkCover’sfinancialreportingandsystemscomplywiththesestandards.

• Reducing the average premium rate from $1.55 to $1.43 and announcing a further 16% reduction to $1.20 as at 1 July 2006.

• Strong equity position of $1.39 billion.

• Significant reduction in the net outstanding claims liability.

• Increased benefits to injured workers.

• Strong investment return of 14.3%.


claims not yet received, we are able to budget for these claims year to year, and effectively return provisions set aside in previous years to the fund, for the benefit of injured workers and employers.

>CapitaladequacyThe Workers’ Compensation and Rehabilitation Act 2003 outlines specific requirements WorkCover must meet to be considered fully funded. These directly align with the requirements placed on other private insurers by the Australian Prudential Regulation Authority (APRA) under the Insurance Act 1973 (Cwlth). While WorkCover is not implicitly required to comply with the APRA standards, WorkCover has chosen to do so in the interests of best practice.

WorkCover undertakes a capital adequacy calculation in line with Prudential Standard GPS 110 Capital Adequacy for General Insurers using the prescribed method. The standard requires WorkCover to have eligible capital in excess of its minimum capital requirement (MCR).

On the basis of calculations undertaken at 30 June 2006, WorkCover’s estimated capital adequacy multiple (the proportion of eligible capital to MCR) is strong and meets APRA’s requirements.

>PremiumrevenueNet premium revenue for the year was $861 million, representing an increase of 10% on the same period last year ($782.8 million). The major driver of this increase was an increase in employer wages.

This year our average premium rate reduced from $1.55 per $100 wages, to $1.43. In December 2005, WorkCover announced a further reduction to $1.20. This represents a 16% reduction in premium rates for employers and builds on WorkCover’s charter to reduce premium where it is financially responsible to do so. Queensland is currently leading the way in providing the lowest average premium rates to Australian employers.

>GrossclaimsexpenseGross claims expense has reduced significantly to $144.3 million (2004–2005: $1 003.5 million). This is due to actuarial movements in the outstanding claims provision, and does not reflect any decrease in the actual benefits paid to injured workers. Excluding the effects of actuarial movements, gross claims paid during the year actually increased by $92.5 million to $718.9 million (2004–2005: $626.4 million).

This increase is due to several factors including the increase in medical fees in accordance with the revised Q-COMP table of costs, increased use of Queensland Health hospital services,

0 2002 2003 2004 2005 2006

500

400

200

100

300

Statutoryclaims

Common lawclaims

>Grossclaimsexpense$M

Figure 32


and legislative changes. These legislative changes included larger lump sum payments for permanently injured workers, fatalities and dependants.

>ClaimsrecoveriesrevenueClaims recoveries revenue has reduced to ($87.0) million (2004–2005: $79.8 million). We no longer expect recoveries to be received as a result of the write-back of the provision for latent onset injuries.

Excluding the effects of actuarial movements, claims recoveries received during the year increased by $4.6 million to $30.4 million (2004–2005: $25.8 million). This increase is attributable to asbestos and higher compulsory third party recoveries.

2006 2005

$M $M

Impactonresultsfrominternalfactors 200 (116)

Impactonresultsfromexternalandlegislativechanges

- Difference between actual growth in wages and average wage inflation 50 68

- Difference between actual investment returns and long-term investment returns 191 160

- Legislative change for latent-onset injuries 500 -

- Legislative change in relation to increased benefits 5 -

Incometaxequivalents (277) (26)

Operatingresultaftertax 669 87

Totalequity 1392 719

>FinancialresultsFigure 30

2006 2005

$ $

Queensland 1.43 1.55

New South Wales 2.44 2.57

Victoria 1.80 1.99

Australian Capital Territory 3.08 3.08

South Australia 3.00 3.00

Western Australia 2.32 2.25

Tasmania 2.45 2.46

Comcare 1.77 1.77

>Averagepremiumrateper$100ofwages

Figure 31


WorkCover’s investments are managed by QIC. At 30 June there was $2.97 billion in funds invested.

>TransitiontotheAustralianequivalentstoInternationalFinancialReportingStandardsThe 2005–2006 financial report adopts the Australian equivalents to International Financial Reporting Standards (AIFRS).

Key changes to this year’s report include:

• significant additional disclosure requirements with respect to the outstanding claims provision and actuarial assumptions and methods

• reclassification of land and building from investments to property, plant and equipment and

• calculation of income tax using the balance sheet method in accordance with AASB 112 Income Taxes.

The financial impact of the transition is detailed in the financial report at note 35.

>NewfinancesystemDuring the year, the Finance Division implemented a new financial management information system which went live on 1 July 2006. The new system provides significantly enhanced functionality, a higher quality of business reporting and an improved budgeting program.

>OutlookWe will continue to use prudent financial management to ensure a balanced, financially viable scheme for all stakeholders. Premiums will be set, claim benefits reviewed, and operational expenses carefully managed in order to deliver this balance. Further, we will continue our long-term investment strategy built around a balanced portfolio.

>NetoutstandingclaimsliabilityThe valuation of the net outstanding claims liability reduced by $563.2 million to $1 357.4 million (2004–2005: $1 920.6 million). This follows a significant write-back as a result of changing legislation with respect to latent onset injuries—those injuries that take a long time to appear, for example, asbestosis.

A review of WorkCover’s probability of sufficiency was undertaken during the year with the WorkCover Board targeting the probability of sufficiency at 80% (2004–2005: 83.6%). The probability of sufficiency is above the minimum APRA requirement of 75% for general insurers.

There is a three-year statute of limitations in which a common law claim can be lodged. Of the claims we receive, more are now being lodged toward the beginning of this three-year period and less towards the end of the three years. Therefore, we are better able to budget for these claims on a year-to-year basis, and our provisioning has been reduced accordingly.

>UnderwritingexpensesUnderwriting expenses include WorkCover’s management expenses and the levy payable to Q-COMP. To meet disclosure under accounting standards, the claims handling expense portion of underwriting expenses is added to gross claims expense to reflect the cost of administering claims during the year.

Excluding claims handling expense, total underwriting expenses increased by 3%, or $4.0 million.

>InvestmentsWorkCover’s investment strategy targets an estimated long-term return of 7% per annum net of fees, by holding investments in a balanced portfolio.

In 2005–2006, the net return on WorkCover’s investment portfolio was 14.3% (2004–2005: 13.9%). This was due to strong performances in both domestic and international equities as well as direct property. We continue to maintain an investment fluctuation reserve to absorb any downturn in investment markets.


-4 2002 2003 2004 2005 2006

16

12

4

0

8

Actual Target

>Returnoninvestments%

Figure 33

WorkCover Queensland Annual Report 2005–2006 39We’re listening …

Financial statements 2005–2006Contents

Page number

Income statement 40

Balance sheet 41

Statement of changes in equity 42

Cash flow statement 43

Notes to the financial statements1 Statement of significant accounting policies 44

2 Amendments to the Workers’ Compensation and Rehabilitation Act 2003 50

3 Critical accounting judgements and estimates 50

4 Actuarial assumptions and methods 51

5 Insurance contracts—risk management policies and procedures 55

6 Net premium revenue 56

7 Net claims incurred 56

8 Underwriting expenses 57

9 Investment income 57

10 Other income 58

11 Other expenses 58

12 Income tax equivalents 58

13 Recoveries receivable on outstanding claims 59

14 Receivables 60

15 Investments 60

16 Property, plant and equipment 61

17 Intangible assets 62

18 Payables 62

19 Unearned premium liability 62

20 Outstanding claims liability 63

21 Provisions 64

22 Asset revaluation reserve by class 64

23 Investment fluctuation reserve 64

24 Operating leases 65

25 Consultancy fees 65

26 Notes to the cash flow statement 66

27 Employee benefits 66

28 Key management personnel disclosures 67

29 Related parties 70

30 Auditors’ remuneration 70

31 Additional financial instruments disclosure 71

32 Contingent liabilities 72

33 Segment information 72

34 Events after balance sheet date 72

35 Explanation of transition to Australian equivalents to International Financial Reporting Standards 73

Actuarial certificate on outstanding claim liabilities 79

Certificate of WorkCover Queensland 80

Declaration by directors 81

Independent audit report 82

General informationWorkCover Queensland is a statutory body established under the Workers’ Compensation and Rehabilitation Act 2003, and is controlled by the State Government. WorkCover’s principal place of business is 280 Adelaide Street, Brisbane.

This financial report covers WorkCover and is presented in Australian currency, while the nature of WorkCover’s operations and principal activities is included in the previous section of this annual report. WorkCover Chairman, Mr Ian Brusasco AM, authorised this report for issue on 29 August 2006.

WorkCover Queensland Annual Report 2005–200640

Income statementFor the year ended 30 June 2006

Note 2006 2005

$’000 $’000

Net premium revenue 6 861 042 782 770

Gross claims expense 7(a) (144 301) (1 003 526)

Claims recoveries revenue 7(a) (87 015) 79 798

Net claims incurred 7(a) (231 316) (923 728)

Underwriting expenses 8 (53 489) (65 825)

Underwriting result 576 237 (206 783)

Investment income 9 373 841 323 021

Other income 10 509 558

Other expenses 11 (4 972) (4 308)

Operating result for the year before income tax equivalents 945 615 112 488

Income tax equivalents expense 12(a) (276 511) (25 757)

Operating result for the year 669 104 86 731

The above income statement is to be read in conjunction with the accompanying notes.


Balance sheetAs at 30 June 2006

Note 2006 2005

$’000 $’000

Current assets Cash assets 26(a) 7 220 12 509

Recoveries receivable on outstanding claims 13(a) 28 800 31 900

Receivables 14 10 292 18 435

Investments 15 584 100 577 100

Prepayments 5 648 3 421

Total current assets 636 060 643 365

Non-current assets Recoveries receivable on outstanding claims 13(a) 67 800 182 100

Investments 15 2 392 453 1 988 018

Property, plant and equipment 16 46 838 40 128

Deferred tax assets 12(c) 8 371 8 469

Intangible assets 17 17 027 16 814

Total non-current assets 2 532 489 2 235 529

Total assets 3 168 549 2 878 894

Current liabilities Payables 18 12 579 3 829

Unearned premium liability 19 3 276 519

Outstanding claims liability 20(a) 612 900 609 000

Provisions 21 355 771

Current tax liabilities 12(e) 238 722 -

Employee benefits 27 15 697 11 487

Total current liabilities 883 529 625 606

Non-current liabilities Deferred tax liabilities 12(d) 49 054 4 624

Outstanding claims liability 20(a) 841 100 1 525 600

Provisions 21 687 340

Employee benefits 27 2 530 4 079

Total non-current liabilities 893 371 1 534 643

Total liabilities 1 776 900 2 160 249

Net assets 1 391 649 718 645

Equity Investment fluctuation reserve 23 894 035 284 607

Asset revaluation reserve 22 5 221 1 321

Accumulated surplus 492 393 432 717

Total equity 1 391 649 718 645

The above balance sheet is to be read in conjunction with the accompanying notes.


Statement of changes in equityFor the year ended 30 June 2006

Investment Asset fl uctuation revaluation Accumulated Note reserve reserve surplus Total

$’000 $’000 $’000 $’000

As at 30 June 2004 296 276 - 334 490 630 766

Operating result for the year - - 86 731 86 731

Transfer of accumulated surplus to/ (from) investment fluctuation reserve 23 (11 669) - 11 669 -

Gain on revaluation of land and building, net of tax 22 - 1 321 - 1 321

Change in equity due to separation of Q-COMP from WorkCover - - (173) (173)

As at 30 June 2005 284 607 1 321 432 717 718 645

Operating result for the year - - 669 104 669 104

Transfer of accumulated surplus to/ (from) investment fluctuation reserve 23 609 428 - (609 428) -

Gain on revaluation of land and building, net of tax 22 - 3 900 - 3 900

As at 30 June 2006 894 035 5 221 492 393 1 391 649

The above statement of changes in equity is to be read in conjunction with the accompanying notes.


Note 2006 2005

$’000 $’000

Cash flows from operating activities Premiums received 876 026 804 550

Premiums refunded (16 174) (27 111)

Interest received 2 138 3 450

Unit trust distributions received 248 967 149 933

GST collected on sales 86 387 78 639

GST refunded from ATO 6 558 7 867

Claims paid (818 528) (737 214)

Claims recoveries received 25 897 26 683

Underwriting expenses paid (41 182) (59 533)

Other revenue received 431 592

Other expenses paid (4 848) (4 299)

GST paid on purchases (8 789) (10 962)

GST remitted to the ATO (78 373) (69 024)

Income tax equivalents (paid)/received 16 799 (8 505)

Net cash provided by operating activities 26(b) 295 309 155 066

Cash flows from investing activities Purchases of investments (975 869) (814 601)

Proceeds on sale of investments 687 169 672 777

Payment for intangible assets (4 982) (2 863)

Payment for property, plant and equipment (7 763) (7 136)

Proceeds from sale of property, plant and equipment 847 760

Net cash used in investing activities (300 598) (151 063)

Net increase/(decrease) in cash held (5 289) 4 003

Cash at the beginning of the year 12 509 8 506

Cash at the end of the year 26(a) 7 220 12 509

The above cash flow statement is to be read in conjunction with the accompanying notes.

Cash fl ow statementFor the year ended 30 June 2006


Notes to the fi nancial statementsFor the year ended 30 June 2006

The signifi cant accounting policies adopted in the preparation of the fi nancial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

This general purpose fi nancial report covers WorkCover as a single entity and has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group interpretations corresponding to the interpretations approved by the International Accounting Standards Board (IASB), Financial Administration and Audit Act 1977, Financial Management Standard 1997 and the Workers’ Compensation and Rehabilitation Act 2003.

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards. Compliance with AIFRS ensures that the fi nancial statements and notes of WorkCover comply with International Financial Reporting Standards.

This is the fi rst fi nancial report to be prepared in accordance with AIFRS and comparatives for the year ended 30 June 2005 have been restated accordingly. AASB 1 First Time Adoption of Australian Equivalents to International Financial Reporting Standards has been applied in preparing these fi nancial statements. Reconciliations of AIFRS equity and operating result for 2005 under AIFRS to the balances reported in the 30 June 2005 fi nancial report are detailed in note 35.

This fi nancial report is prepared in accordance with the historical cost convention with certain exceptions as described in the accounting policies below.

The preparation of fi nancial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying WorkCover’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial statements have been disclosed in note 3.

Australian Accounting Standards issued but not yet effective

The AASB has issued the following amendments to Australian Accounting Standards:

TitleOperative date

2005-10 Amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 and AASB 1038]

1 January 2007

AASB 7 Financial Instruments: Disclosures

1 January 2007

These amendments are not effective for the annual reporting period ending 30 June 2006 and have not been applied in preparing the fi nancial statements. The nature of the impact of the application of these standards is disclosure only. WorkCover will apply these standards for the annual reporting period beginning on or after the operative date set out above.

(a) Reinsurance

WorkCover does not enter into any reinsurance arrangements.

(b) Premium revenue

Premium revenue includes amounts charged to the policyholder, excluding stamp duty and goods and services tax (GST) received on behalf of the State and Federal governments.

Premium revenue, including that on unclosed business, is recognised in the income statement when it has been earned. Premium revenue is recognised in the income statement from the date of attachment of risk. The pattern of recognition over the policy period is based on time, which is considered to closely approximate the pattern of risks underwritten.

The proportion of premium received or receivable not earned in the income statement at the reporting date is recognised in the balance sheet as an unearned premium liability. In some instances, premiums may be paid in advance of the period to which those premiums relate. These premiums are also recognised as a liability at balance date.

Premiums on unclosed business are brought to account where material.

Section 382(2) of the Workers’ Compensation and Rehabilitation Act 2003 provides that all insurance policies issued by or on behalf of WorkCover are guaranteed by the Queensland Government.

1. Statement of significant accounting policies



(c) Investment revenue and expenses

Interest income is recognised in the income statement as it accrues which may differ from when cash is transferred. Distributions from unit trusts are recognised on the date the unit value is quoted ex-distribution. Changes in the fair value of investments are recognised as revenue or expenses in the income statement.

Investment expenses are recognised on an accruals basis.

(d) Liability adequacy test

At each reporting date WorkCover assesses whether the unearned premium liability is suffi cient to cover all expected future cash fl ows relating to future claims against current insurance contracts. This assessment is referred to as the liability adequacy test and is performed separately for each group of contracts subject to broadly similar risks and managed together as a single portfolio.

If the present value of the expected future cash fl ows relating to future claims plus the additional risk margin to refl ect the inherent uncertainty in the central estimate exceeds the unearned premium liability, then the unearned premium liability is deemed to be defi cient. WorkCover applies a risk margin to achieve the same probability of suffi ciency for future claims as is achieved by the estimate of the outstanding claims liability, see note 1(f).

The entire defi ciency is recognised immediately in the income statement.

(e) Claims expense

Claims expenses are recognised in the income statement as losses are incurred which is usually the point in time when the event giving rise to the claim occurs.

(f) Outstanding claims liability

The liability for outstanding claims is measured as the central estimate of the present value of expected future payments against claims incurred at the reporting date with an additional risk margin to allow for the inherent uncertainty in the central estimate. This liability is actuarially calculated by an independent actuary.

The expected future payments include those in relation to claims reported but not yet paid, claims incurred but not yet reported (IBNR), claims incurred but not enough reported (IBNER) and anticipated claims handling costs.

Future payments are estimated on the basis of the ultimate cost of settling claims, which is affected by factors arising during the period to settlement such as normal and superimposed infl ation. The expected future payments are discounted to a present value at balance date using a risk free rate. The details of infl ation and discount rates applied are included in note 4(a).

The outstanding claims liability includes an 11.6% (2005: 15%) risk margin. This increases the probability of suffi ciency of the liability to 80% (2005: 83.6%) in recognition that there are inherent uncertainties in the actuarial assumptions underlying the present value calculation. This risk margin was determined having regard to the inherent uncertainties in the actuarial models and economic assumptions, the quality of the underlying data used in the models and industry and market conditions. An analysis of these inherent uncertainties was performed, considering the statutory, common law and asbestos related gross outstanding claims estimates separately.

(g) Deferred acquisition costs

Under Australian Accounting Standards, acquisition costs incurred in obtaining and recording general insurance contracts should be deferred and recognised as an asset where it is probable that they will give rise to premium revenue that will be recognised in the income statement in subsequent reporting periods and where the value of the asset can be reliably measured. The general insurance contracts entered into by WorkCover tend to only give rise to immaterial amounts of premium revenue that will be recognised in the income statement in subsequent reporting periods. As a result, no deferred acquisition costs have been recognised.

(h) Self-insurer payments and receipts

Under Chapter 2, Part 4 of the Workers’ Compensation and Rehabilitation Act 2003, an employer may provide their own accident insurance for their workers instead of insuring with WorkCover. Upon separation, WorkCover will make a payment to the self-insurer for the estimated liability of outstanding claim payments, which relate to the period of insurance covered by WorkCover.

If a self-insurer returns to WorkCover as a policyholder, WorkCover will receive payment from the self-insurer for the estimated liability of outstanding claim payments for the period of self-insurance.

There may be an additional payment or receipt by WorkCover in relation to the estimated outstanding claims liability transferred. This applies to those self-insurers who elected the 5 year recalculation option. The recalculation considers the initial payment made by WorkCover and the history of payments by the self-insurer over a 5 year period from the date of becoming a self-insurer.

1. Statement of significant accounting policies (continued)



(i) Income tax

Tax effect accounting is applied using the balance sheet liability method whereby tax payable on the current period’s taxable income will be equal to current tax expense plus or minus any movement in the balances of deferred tax assets or liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements, and any unused tax losses.

The tax effect of temporary differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the balance sheet as a deferred tax asset or liability at the rates which are expected to apply when those temporary differences reverse.

Deferred tax assets for deductible temporary differences and unused tax losses are brought to account when it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(j) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Tax Offi ce (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or in the amount of the expense.

Receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet.

The GST components of cash fl ows arising from investing and fi nancing activities, which are recoverable from, or payable to, the ATO are classifi ed as operating cash fl ows.

(k) Cash and cash equivalents

For cash fl ow statement presentation purposes, cash and cash equivalents includes cash on hand and deposits held at call with fi nancial institutions.

(l) Receivables

Premiums outstanding

Premiums outstanding are recognised at fair value. They are initially measured at the amounts due but are subsequently reduced for any impairments identifi ed. Premium debts are given 30 days to settle (excluding those policies subject to a common due date of 30 September).

Sundry debtors and recoveries

Sundry debtors and recoveries are recognised on an accrual basis and are given 30 days to settle. They are initially measured at the amounts due but are subsequently reduced for any impairments identifi ed.

Provision for impairment

Collectibility of receivables is reviewed on an ongoing basis. A provision for impairment of receivables is established when there is objective evidence that the amounts due will not be able to be collected in accordance with the original terms of the receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows. The discount is calculated using a risk free rate. Cash fl ows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the income statement.

(m) Claim recoveries receivable

Claim recoveries received or receivable on outstanding claims liabilities are recognised as revenue in the income statement, and the receivable is recorded in the balance sheet.

Claims recoveries receivable are assessed in a manner similar to the assessment of gross outstanding claims. Recoveries are measured as the present value of the expected future receipts, calculated on the same basis as the liability for gross outstanding claims.

Details of infl ation and discount rates applied are included in note 4(a).




(n) Property, plant and equipment

Acquisition

All items of property, plant and equipment are recorded at their cost of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.

With respect to plant and equipment, an asset recognition threshold of $5 000 exists below which all items are expensed. With respect to property, an asset recognition threshold of $10 000 exists for buildings and $1 for land.

Items or components which form an integral part of an asset are recognised as a single asset. The recognition threshold is applied to the aggregate cost of each functional asset.

Subsequent additional costs

Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefi ts, in excess of the originally assessed performance of the asset will fl ow to the entity in future years. Costs that do not meet the criteria for capitalisation are expensed as incurred.

Valuation

Land and buildings are shown at fair value, based on annual valuations by an external independent valuer, less subsequent depreciation for buildings. On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset and any change in the estimate of remaining useful life.

Increases in the carrying amounts arising on revaluation of land and buildings are credited, net of tax equivalents, to the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised as an expense, in which case the increase is recognised in the income statement.

Any revaluation decrease is recognised as an expense, except a decrease offsetting a previous revaluation increase for the same assets is debited directly to the asset revaluation reserve to the extent of the credit balance existing in the revaluation reserve for that asset.

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation

Land is not depreciated.

Depreciation on property, plant and equipment is calculated on a straight-line basis over the estimated useful life of the assets as follows:

2006 2005

Building 4 to 60 years

4 to 60 years

Plant and equipment:

Computer equipment 2 to 10 years

3 to 8 years

Offi ce equipment and furniture

5 to 15 years

3 to 20 years

Fixtures and fi ttings 4 to 15 years

4 to 15 years

Motor vehicles 2 to 4 years 2 to 4 years

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each fi nancial year end.

(o) Intangible assets

Computer software

WorkCover has one class of intangible assets, that being computer software.

Computer software is recognised as an intangible asset where greater than $100 000. Computer software with a lesser value is expensed. Computer software is amortised on a straight-line basis over the period in which the related benefi ts are expected to be realised. Current amortisation periods range between 3 and 15 years.

Computer software in development

Costs incurred on software development projects are recognised as intangible assets when it is probable that the project will be a success considering its technical feasibility and its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services and direct labour. Other development expenditure that do not meet this criteria are recognised as an expense as incurred. Capitalised software development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use.

The carrying value of computer software in development is reviewed for impairment annually when the asset is not yet in use, or more frequently when an indicator of impairment arises during the reporting year that the carrying value may not be recoverable.




(p) Impairment

All non-current physical and intangible assets are assessed for indicators of impairment on an annual basis. If an indicator of possible impairment exists, WorkCover determines the asset’s recoverable amount. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the income statement, unless the asset is carried at revalued amount, in which case the impairment loss is treated as a revaluation decrease.

The asset’s recoverable amount is determined as the greater of the asset’s fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(q) Assets backing general insurance liabilities

As part of its investment strategy, WorkCover actively manages its investment portfolio to ensure that investments mature in accordance with the expected pattern of future cash fl ows arising from general insurance liabilities.

WorkCover has determined that its investments are held to back its general insurance liabilities.

Investments

Investments are designated at fair value through the income statement. Initial recognition is at cost in the balance sheet and subsequent measurement is at fair value with any resultant unrealised gains and losses recognised in the income statement. Subsequent fair value is taken as the quoted bid price of the investment at balance date.

Unit trusts held provide WorkCover with a mix of investments which include domestic and international equities, domestic and internatioinal fi xed interest and domestic cash. These investments are subject to fl uctuation in equity market prices, foreign exchange rates and interest rates.

(r) Accounts payable

Trade creditors

Liabilities are recognised for amounts to be paid in the future for administrative goods or services received. The amounts are unsecured, non-interest bearing and are usually paid within 30 days of recognition.

Premium creditors

Liabilities are recognised for premiums received in advance and policies in credit.

Claim creditors

This represents liabilities for amounts owed which are directly related to claim payments or claims made. Settlement for these creditors usually occurs within 30 days.

(s) Provisions

A provision is recognised when there is a present legal, equitable or constructive obligation as a result of a past event and it is probable that an outfl ow of economic benefi ts will be required to settle the obligation, the timing or amount of which is uncertain.

If the effect is material, a provision is determined by discounting the expected future cash fl ows (adjusted for expected future risks) required to settle the obligation at a pre-tax rate that refl ects current market assessments of the time value of money and, where appropriate, the risks specifi c to the liability.

Provision for lease restoration

A provision for lease restoration is recognised in relation to the ‘making good’ of leased offi ce buildings following the cessation of a lease. The provision relates to all offi ce buildings leased by WorkCover and the obligation is calculated based on a market rate per square metre.

(t) Employee benefits

Wages, salaries and annual leave

Liabilities for wages, salaries and annual leave expected to be settled within 12 months of the reporting date represent present obligations resulting from employee’s services provided up to the balance date, calculated at undiscounted amounts based on wages and salary rates which are expected to be paid when the liability is settled. Related on-costs have been included in the liability.




(t) Employee benefits (continued)

Long service leave

A liability for long service leave is recognised, and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the balance date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using interest rates on national government securities with terms to maturity that match, as closely as possible, the estimated future cash outfl ows. Related on-costs have been included in the liability.

Sick leave

Sick leave entitlements are non-vesting and are only paid upon valid claims for sick leave by employees. Sick leave expense is brought to account in the reporting period in which it occurs. No liability for sick leave has been recognised as experience indicates that on average, sick leave taken each fi nancial year is less than the entitlement accruing in that period.

Superannuation

WorkCover contributes to superannuation funds for the purpose of providing benefi ts for employees and their dependants on retirement, disability or death. Contributions are charged as expenses when incurred.

Employer superannuation contributions for employees are paid to superannuation funds as nominated by employees including QSuper, the superannuation plan for Queensland Government employees. The rates for contributions to defi ned benefi t plans are determined by the State Actuary.

No liability is recognised for accruing superannuation benefi ts in these fi nancial statements, the liability being held on a whole-of-Government basis and reported in the fi nancial report prepared pursuant to AAS 31 Financial Reporting by Governments.

(u) Operating leases

Payments made under operating leases are charged to the income statement on a straight line basis over the term of the lease.

Lease income from operating leases is recognised in income on a straight-line basis over the lease term.

(v) Derivative financial instruments

WorkCover utilise derivative fi nancial instruments to hedge underlying exposures in investments backing insurance liabilities. Derivative fi nancial instruments are not held for speculative purposes.

In accordance with the approved investment strategy, WorkCover holds the following derivative fi nancial instruments. These derivatives are held for risk management purposes which meet the criteria specifi ed in AASB 139 Financial Instruments: Recognition and Measurement and are accounted for using fair value hedge accounting.

Currency overlay

The purpose of the currency overlay is to hedge the foreign exchange risks on the market value of international equity assets held by WorkCover via its investments in unit trusts. This activity is facilitated by holding a portfolio of forward exchange contracts within the overlay.

Rebalancing derivative overlay

The rebalancing overlay is a portfolio of exchange traded derivative contracts that are used to control the overall exposure of WorkCover’s asset portfolio to various asset classes. The purpose of the overlay is to remove the investment risks associated with having too little or too much of the underlying assets invested in various asset classes, relative to WorkCover’s approved investment strategy.

Derivative fi nancial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the reporting date. The resulting fair value gain or loss is recorded in the income statement, together with any changes in the fair value of the hedged asset that are attributable to the hedged risk. The hedged item is recognised at fair value, for the risk being hedged, in the balance sheet.

At the inception of the hedging transaction, the Investment Manager on behalf of WorkCover formally documents the relationship between the hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking the hedge. Such hedges are expected to be highly effective in achieving offsetting changes in fair value and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the fi nancial reporting period for which they are designated.

(w) Rounding

Amounts included in the fi nancial statements have been rounded to the nearest $1 000 or, where that amount is $500 or less, to zero.




2. Amendments to the Workers’ Compensation and Rehabilitation Act 2003

The Workers’ Compensation and Rehabilitation and Other Acts Amendment Bill 2005 was introduced into Parliament on 5 October 2005. This bill included an amendment in relation to the defi nition of latent onset injuries.

Subdivision 3A of the Workers’ Compensation and Rehabilitation Act 2003 states that the defi nition of the date of injury for a latent onset injury, such as those caused by asbestos, is the date at which a medical practitioner diagnoses the injury. The previous approach was to consider the date of injury to be the date at which the claimant was exposed to asbestos.

The primary purpose of this change was to enhance workers’ compensation benefi ts for injured workers and their families by providing them with benefi t rates as at the date of diagnosis which are higher than the benefi t rates that would have applied under the old legislation. This builds on WorkCover Queensland’s focus of providing enhanced compensation to more seriously injured workers and to minimise immediate fi nancial hardship on families if a worker is fatally injured as a result of a work-related injury.

This change in legislation has signifi cantly impacted the outstanding claims liability held by WorkCover Queensland in that WorkCover is only required to provide outstanding claims estimates in respect of those injuries which have been diagnosed but not settled. No liability is held for latent onset claims where initial diagnosis has not yet occurred, as there is no requirement to recognise a claim until such time as a date of injury has occurred.

This has resulted in a reduction of approximately $500 million in the net outstanding claims provision for asbestos liability for the year ended 30 June 2006. This amount represents the latest estimate provided by WorkCover’s Actuary as to what WorkCover may be required to pay out in future years.

WorkCover will continue to meet the future liabilities incurred for asbestos claims as they are diagnosed. The funding of such future liabilities will be met by future premiums as required.

3. Critical accounting judgements and estimates

WorkCover makes estimates and assumptions in respect of certain key assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The key area in which critical estimates have been applied is described below.

It has been determined that no critical accounting judgements have been made in the year.

(a) The ultimate liability arising from claims made under insurance contracts

Provision is made at the year end for the estimated cost of claims incurred but not settled at the balance sheet date, including the cost of claims incurred but not yet reported to WorkCover. An independent actuary undertakes this calculation.

The estimated cost of claims includes direct expenses to be incurred in settling claims gross of the expected value of salvage and other recoveries. The independent actuary takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the fi nal outcome will prove to be different from the original liability established.

The estimation of claims incurred but not reported (IBNR) is generally subject to a greater degree of uncertainty than the estimation of the cost of settling claims already notifi ed to WorkCover, where more information about the claim event is generally available. IBNR claims may often not be apparent until many years after the events giving rise to the claims has happened. Claims typically reported soon after the claim event tend to display lower levels of volatility. In calculating the estimated cost of unpaid claims, the independent actuary uses a variety of estimation techniques, generally based upon statistical analyses of historical experience, which assumes that the development pattern of the current claims will be consistent with past experience.



(a) The ultimate liability arising from claims made under insurance contracts (continued)

Allowance is made, however, for changes or uncertainties which may create distortions in the underlying statistics of which might cause the cost of unsettled claims to increase or reduce when compared with the cost of previously settled claims including:

• changes in WorkCover’s processes which might accelerate or slow down the development and/or recording of paid or incurred claims, compared with the statistics from previous periods

• changes in the legal environment

• the effects of infl ation

• the impact of large losses

• movements in industry benchmarks

• medical and technological developments.

A component of these estimation techniques is usually the estimation of the cost of notifi ed but not paid claims. In estimating the cost of these, the independent actuary has regard to the claim circumstance as reported, any information available from loss adjusters and information on the cost of settling claims with similar characteristics in previous periods.

Large claims are generally assessed separately, being measured on a case by case basis or projected separately in order to allow for the possible distortive effect of the development and incidence of these large claims.

Where possible, the independent actuary adopts multiple techniques to estimate the required level of provisions. This assists in giving greater understanding of the trends inherent in the data being projected. The projections given by the various methodologies also assist in setting the range of possible outcomes. The most appropriate estimation technique is selected taking into account the characteristics of the business class and the extent of the development of each accident year.

Details of specifi c assumptions used in deriving the outstanding claims liability at year end are detailed in note 4.

(b) Estimation of other recoveries

In addition to the calculation of the gross outstanding claims liability, estimates for potential claim recoveries are also computed using the above methods. These calculations are also based on past recovery experience and include adjustments to these assumptions where appropriate. In addition, the recoverability of the assets is assessed on a periodic basis to ensure that the balance is refl ective of the amounts that will ultimately be received, taking into consideration factors such as credit risk. Impairment is recognised where there is objective evidence that WorkCover may not receive amounts due to it and these amounts can be reliably measured.

4. Actuarial assumptions and methodsWorkCover writes one class of business: workers’ compensation. It provides two types of insurance: accident insurance and contracts of insurance.

The process to determine the value of net outstanding claims liability is detailed below.

Claims estimates are derived from analysis of the results of several different actuarial models. Ultimate numbers of claims are projected based on past reporting patterns. Payments experience is analysed based on averages paid per claim incurred and averages paid per claim settled or fi nalised. The resulting average claim sizes from these models are analysed in order to determine a fi nal estimate of gross outstanding claims.

Recoveries are analysed separately using similar payments based models. Estimated outstanding recoveries are then subtracted from gross outstanding claims to arrive at net outstanding claim estimates.

Claims infl ation is incorporated into the resulting projected payments to allow for general economic infl ation. Projected payments are discounted to allow for the time value of money, which is the investment return expected based on risk free rates in the period to settlement.

3. Critical accounting judgements and estimates (continued)



2006 2005

4. Actuarial assumptions and methods (continued)

(a) Actuarial assumptions

The following assumptions have been made in determining the outstanding claims liability.

Recoveries receivable on outstanding claims

Discount rates

Not later than one year 6.0% 5.4%

Later than one year 5.9% 5.1%

Inflation rates



Average weighted term to settlement from claims reporting date—refer (i) 2.2 years 7.4 years

Gross outstanding claims

Discount rates



Inflation rates (average weekly earnings)



Average weighted term to settlement from claims reporting date—refer (ii) 1.9 years 4.8 years

Ultimate claim numbers per annum—statutory claims 67 236 63 422

Ultimate claim numbers per annum—common law 2 321 2 435

Ultimate claim numbers per annum—asbestos related 467 309

Ultimate claims size—statutory claims $5 839 $5 065

Ultimate claims size—common law $108 200 $102 800

Ultimate claim size—asbestos related—refer (iii) $57 129 $84 860

Expense rate—statutory claims 30.0% 30.0%

Expense rate—common law 5.0% 5.0%

Expense rate—asbestos related 5.0% 5.0%

(i) Decrease in the recoveries outstanding estimate average weighted term to settlement is due to the decrease in the relative size of the asbestos-related recoveries outstanding estimate to all other claim types and the significant individual decrease in the recoveries outstanding estimate average weighted term of the asbestos-related liability.

(ii) Decrease in the gross outstanding estimate average weighted term to settlement is due to the decrease in the relative size of the asbestos-related gross outstanding estimate to all other claim types and the significant individual decrease in the gross outstanding estimate average weighted term of the asbestos-related liability.

(iii) The decrease in the ultimate claims size for asbestos-related claims is due to a change in the mix of the various types of asbestos-related claims that make up the asbestos-related outstanding claims estimate. The proportion of statutory mesothelioma claims to statutory asbestosis claims at this valuation has decreased. Statutory mesothelioma claims have a much higher average claim size than statutory asbestosis claims, therefore as the proportion of these claims decrease, the total average claim size across all asbestos-related claims reduces.



(b) Process used to determine assumptions

A description of the processes used to determine these assumptions is provided below.

Discount rates

Discount rates derived from market yields on Commonwealth Government securities as at the balance date have been adopted.

Infl ation rates

Economic infl ation assumptions are set by reference to current economic indicators.

Average weighted term to settlement

The average weighted term to settlement is calculated separately based on historic settlement patterns.

Ultimate claim numbers per annum

The incurred claims total for the current underwriting year has been estimated based on past reporting patterns for statutory and common law claims separately, taking into account trends or changes in reporting patterns. The ratio of numbers of common law to statutory claims is also examined for reasonableness. The incurred claims total for asbestos-related claims for the current underwriting year is an estimate of all claims diagnosed in the current year. This is estimated using past reporting patterns and delays from diagnosis to report for asbestos-related claims.

Ultimate claim size

The average ultimate claim size for the current underwriting year has been estimated based on past payment patterns for statutory, common law and asbestos-related claims separately, taking into account trends or changes in payment patterns.

Expense rate

Claims handling expenses are calculated by reference to past experience of claims handling costs as a percentage of past payments.

(c) Sensitivity analysis—insurance contracts

(i) Summary

WorkCover conducts sensitivity analyses to quantify the exposure to risk of changes in the key underlying variables. The valuations included in the reported results are calculated using certain assumptions about these variables as disclosed above. The movement in any key variable will impact the performance and equity of WorkCover.

The tables below describe how a change in each assumption will affect the insurance liabilities and show an analysis of the sensitivity of the operating result and equity to changes in these assumptions.

Variable Impact of movement in variable

Discount rates The outstanding claims liability is calculated by reference to expected future payments. These payments are discounted to adjust for the time value of money. An increase or decrease in the assumed discount rate will have an opposing impact on total claims expense.

Infl ation Expected future payments are infl ated to take account of infl ationary increases. An increase or decrease in the assumed level of infl ation would have a corresponding impact on claims expense, with particular reference to longer tail business.

Average weighted term to settlement

A decrease in the average term to settlement rates would lead to more claims being paid sooner than anticipated. Expected payment patterns are used in determining the gross outstanding claims liability. An increase or decrease in the average weighted term would have a corresponding increase or decrease on claims expense.

Ultimate claim numbers per annum

Numbers of claims incurred are used in determining the estimates in respect of claims incurred but not reported (IBNR) for statutory and common law claims and in respect of claims diagnosed but not reported (DBNR) for asbestos-related claims. An increase or decrease in the estimated numbers of claims incurred would have a corresponding impact on the claims expense.

Ultimate claim size Ultimate claim sizes are used in determining the estimates in respect of all claim payments made in the future. An increase or decrease in the estimated ultimate claim sizes would have a corresponding impact on the claims expense.

Expense rate An estimate for the internal costs of handling claims is included in the outstanding claims liability. An increase or decrease in the expense rate assumption would have a corresponding impact on claims expense.




Operating result Equity

$’000 $’000


(c) Sensitivity analysis—insurance contracts

(ii) Impact of changes in key variables

Recognised amounts per the financial statements 669 104 1 391 649

Movement Adjusted Adjusted in variable amount amount

Variable $M $M

Discount rates—claims expected to be paid 1% 7.1 7.1 not later than one year (1)% (7.2) (7.2)

Discount rates—claims expected to be paid 1% 9.5 9.5 not later than one year (1)% (10.0) (10.0)

Inflation rates—claims expected to be paid 1% (8.0) (8.0) not later than one year (1)% 8.0 8.0

Inflation rates—claims expected to be paid 1% (10.1) (10.1) later than one year (1)% 9.8 9.8

Average weighted term to settlement—years 0.5 8.3 8.3 (0.5) (8.4) (8.4)

Ultimate claim numbers per annum—latest year 10% (40.5) (40.5) (10)% 41.9 41.9

Ultimate claims size—latest year 10% (40.5) (40.5) (10)% 41.9 41.9

Expense rate 1% (15.9) (15.9) (1)% 15.9 15.9



All employers in Queensland are required to have accident insurance coverage for all employees that meet the defi nition of a ‘worker’.

WorkCover also provides optional insurance instruments—i.e. contracts of insurance. These instruments provide cover to individuals, employees or members of associations that do not meet the defi nition of ‘worker’ and are therefore not covered by the accident insurance policies.

The fi nancial condition and operation of WorkCover are affected by a number of key risks including insurance risk, interest rate risk, currency risk, credit risk, market risk and liquidity risk. Notes on WorkCover’s policies and procedures in respect of managing these risks are set out below.

(a) Objectives in managing risks arising from insurance contracts and policies for mitigating those risks

WorkCover has an objective to control insurance risk thus reducing the volatility of operating results. In addition to the inherent uncertainty of insurance risk, which can lead to signifi cant variability in the loss experience, operating results from insurance business are affected by market factors, particularly movements in asset values. Short-term variability is, to some extent, a feature of insurance business.

Key aspects of the processes established to mitigate insurance risks include:

• The maintenance and use of management information systems, which provide up to date, reliable data on the risks to which WorkCover is exposed at any point in time.

• Actuarial models, using information from the management information system, are used to monitor claims patterns and calculate premiums. Past experience and statistical methods are used as part of the process.

• The mix of assets in which WorkCover invest is driven by the nature and term of the insurance liabilities. The management of assets and liabilities is closely monitored to attempt to match the maturity dates of assets with the expected pattern of claim payments.

(b) Terms and conditions of insurance contracts

The terms and conditions attaching to insurance contracts affect the level of insurance risk accepted by WorkCover. All insurance contracts entered into are in the same standard form and are subject to substantially the same terms and conditions.

(c) Concentration of insurance risk

WorkCover’s exposure to insurance risk is due to injury caused through an unforeseen event or disaster. WorkCover’s outstanding claims liability includes an amount estimated to cover any such occurrences. This fi gure is reviewed on an annual basis.

(d) Development of claims

There is a possibility that changes may occur in the estimate of our obligations at the end of a contract period. The table in note 20(c) show our estimates of total net claims outstanding for each underwriting year at successive year ends.

(e) Interest rate risk

WorkCover is exposed to the risk that interest rate movements may materially impact the value of the outstanding claims provision. The fi nancial impact of changing interest rates on outstanding claims is expected to be offset in the longer term by similar changes in claims infl ation.

The discount rates being applied to future claims payments in determining the valuation of outstanding claims is disclosed in note 4. The exposure to interest rate risk and the effective weighted average interest rate for classes of fi nancial assets and fi nancial liabilities is set out in note 31 (a).

(f) Credit risk

Financial assets and liabilities arising from insurance contracts are stated in the balance sheet at the amount that best represents the maximum credit risk exposure at balance date. Exposure to credit risk is monitored on a regular basis.

There are no signifi cant concentrations of credit risk.

(g) Liquidity risk

WorkCover’s exposure to liquidity risk is managed by ensuring that investments held to match policyholder liabilities are matched to the expected duration of those liabilities and suffi cient cash deposits are available to meet day-to-day operations.

(h) Market risk

WorkCover is exposed to price or market value risk on its investments and uses exchange traded derivative contracts to manage this exposure. These exchange traded derivative contracts are accounted for in accordance with the derivatives accounting policy set out in note 1 (v).

(i) Currency risk

WorkCover is exposed to foreign currency risk in respect of its net foreign currency exposures. This risk is managed by holding a portfolio of forward exchange contracts. These foreign exchange contracts are accounted for in accordance with the derivatives accounting policy set out in note 1 (v).

5. Insurance contracts—risk management policies and procedures



Note 2006 2005

$’000 $’000

6 Net premium revenue Gross written premiums 857 570 776 554

Fees and charges 6 229 4 239

863 799 780 793

Movement in unearned premiums 19 (2 757) 1 977

861 042 782 770

2006 2005

Current Prior Current Prior year years Total year years Total

7 Net claims incurred

(a) Net claims incurred

Gross claims expense

Gross claims incurred —undiscounted 921 523 (1 445 373) (523 850) 837 911 546 932 1 384 843

Discount movement (72 748) 740 899 668 151 (69 083) (312 234) (381 317)

848 775 (704 474) 144 301 768 828 234 698 1 003 526

Claims recoveries revenue

Claims recoveries revenue —undiscounted (32 085) 247 297 215 212 (29 740) (116 664) (146 404)

Discount movement 5 245 (133 442) (128 197) 4 527 62 079 66 606

(26 840) 113 855 87 015 (25 213) (54 585) (79 798)

821 935 (590 619) 231 316 743 615 180 113 923 728

Current year amounts relate to risks borne in the current fi nancial year. Prior period amounts relate to a reassessment of the risks borne in all previous fi nancial years.

The signifi cant reduction in net claims incurred in respect of the prior injury years is predominantly due to the change in defi nition of injury date for latent onset injury claims. From November 2005, the date of injury for latent onset claims has been changed to the date of diagnosis. Therefore, the estimate of outstanding claims as at 30 June 2006 includes an allowance in respect of claims which have been diagnosed to that date. It does not include an allowance for claims which will be diagnosed beyond 30 June 2006. The estimate of outstanding claims as at 30 June 2005 included an allowance in respect of all future diagnoses.

A further reduction in the prior injury year estimates is due to the reduction in the risk margin adopted in the estimate of outstanding claims at 30 June 2006 compared to that adopted at 30 June 2005. The risk margin as at 30 June 2006 is designed to produce an estimate of outstanding claims at the 80% suffi ciency level, down from 83.6% at 30 June 2005.

In addition to the two changes above, the experience during the year has resulted in a further reduction in the prior year reserves, particularly in relation to the numbers of common law claims reported. There has been a speeding up in the rate of common law reports and a reduction in the number of claims which are reported just before the three year statute of limitations.



Note 2006 2005

$’000 $’000

7 Net claims incurred (continued)

(b) Reconciliation of net claims incurred separating actuarial movement

Gross claims expense (excluding actuarial movements)

Gross claims paid—statutory 421 023 346 692

Gross claims paid—common law 297 897 279 727

Claims handling expenses 8 103 910 87 589

822 830 714 008

Claims recoveries revenue (excluding actuarial movements)

Gross claims recovered—statutory (26 954) (20 505)

Gross claims recovered—common law (3 431) (5 293)

(30 385) (25 798)

Movement in net outstanding claims liability

Gross claims (680 600) 277 500

Recoveries receivable 117 400 (54 000)

Net self insurance payments1 1(h) 2 071 12 018

(561 129) 235 518

231 316 923 728

1 Net self insurance payments are included in gross claims expense within the net claims incurred table.

8 Underwriting expenses Employee benefits expense 76 151 69 919

Contractors 2 790 5 582

Consultancy fees 25 771 563

Computer costs 7 393 5 938

Operating lease rental expense 2 308 1 799

Other administration expenses 14 091 12 874

Depreciation of property, plant and equipment 16 4 797 4 299

Amortisation of intangible assets 17 3 311 5 590

Net loss on disposal of property, plant and equipment 268 156

Impairment loss on intangible assets 17 1 486 -

Transfer to provision for impairment of receivables 14 1 935 2 249

Q-COMP levy 42 098 44 445

157 399 153 414

Claims handling expenses allocated to gross claims expense 7 (103 910) (87 589)

53 489 65 825

9 Investment income Interest 2 138 3 450

Distribution from unit trusts 237 382 222 963

Movement in financial assets at fair value

Unrealised gains 92 914 64 427

Realised gains 41 407 32 181

373 841 323 021



2006 2005

$’000 $’000

10 Other income Property income 416 555

Sundry income 93 3

509 558

11 Other expenses Investment fees and expenses 4 952 4 274

Property expenses 20 34

4 972 4 308

12 Income tax equivalents

(a) Income tax equivalents expense

Current income tax expense 238 931 8 486

Deferred income tax expense 38 105 18 284

Over provision in prior year (525) (1 013)

276 511 25 757

Reconciliation of income tax equivalents expense

Operating result before income tax 945 615 112 488

Tax at the standard tax rate of 30% 283 684 33 746

Increase in income tax expense due to:

Foreign tax credit gross up 443 381

Imputation gross up on dividends received 2 412 2 001

Other non-deductible items 12 16

Decrease in income tax expense due to:

Foreign tax credits (1 476) (1 269)

Franking credits on dividends received (8 039) (6 671)

Utilisation of prior period capital loss - (1 386)

Other non-assessable items - (48)

Income tax over provided in prior year (525) (1 013)

Income tax expense attributable to operating result 276 511 25 757

(b) Deferred income tax related to items charged to equity

Deferred tax relating to revaluation of land 1 099 949

Deferred tax relating to revaluation of building 2 401 706

Deferred tax relating to separation of Q-COMP from WorkCover - 174

3 500 1 829

(c) Deferred tax assets

Provisions and employee benefits not currently deductible 5 994 5 678

Capital works 1 709 1 469

Difference in depreciation for accounting and income tax purposes (plant and equipment) 533 1 265

Other items 135 57

8 371 8 469



2006 2005

$’000 $’000

12 Income tax equivalents (continued)

(d) Deferred tax liabilities

Difference in depreciation for accounting and income tax purposes (software) 2 532 1 967

Difference in depreciation for accounting and income tax purposes (building) 1 340 231

Investments (unrealised gains/tax deferred) 32 580 1 474

Outstanding claims (indirect costs) 11 501 -

Revaluation of land to fair value 1 099 949

Other items 2 3

49 054 4 624

(e) Current tax liabilities

Balance at the beginning of the financial year - -

Income tax equivalents paid (209) (20 218)

Current year’s income tax expense on operating result 238 931 8 486

Income tax to be refunded (transferred to receivables) - 11 732

238 722 -

13 Recoveries receivable on outstanding claims

(a) Recoveries receivable on outstanding claims

Expected future recoveries undiscounted 110 500 356 100

Discount to present value (13 900) (142 100)

96 600 214 000

Represented by:

Current 28 800 31 900

Non-current 67 800 182 100

96 600 214 000

(b) Reconciliation of movement during year

Carrying amount at the beginning of the year 214 000 160 000

Effect of changes in assumptions1 (117 286) 49 292

Recoveries anticipated over the year 26 840 25 213

Recoveries received during the year (26 954) (20 505)

Carrying amount at the end of the year 96 600 214 000

1 Included in effect of changes in assumptions is a change in the reserve for asbestos-related claims of $118.000 million. This is primarily due to a change in the approach to reserving for latent onset injury claims as a result of a change in the legislation. Refer note 2.



2006 2005

$’000 $’000

14 Receivables Premiums outstanding 7 261 5 294

Other recoveries 4 710 2 359

Income tax refund - 11 732

Unclosed business 324 133

Sundry debtors 148 196

Less: provision for impairment of receivables (3 000) (3 209)

9 443 16 505

GST receivable 1 196 1 930

GST payable (347) -

849 1 930

10 292 18 435

Reconciliation of provision for impairment of receivables


Net debts written off/(recovered) during the year (2 144) (3 290)

Provision made during the year 1 935 2 249


15 Investments Financial assets at fair value

Unit trusts 2 856 383 2 497 168

Hedging instrument—currency overlay (3 011) 12 931

Hedging instrument—rebalancing derivative overlay 123 180 53 907

Other financial instruments 1 1 112

2 976 553 2 565 118

Represented by:

Current 584 100 577 100

Non-current 2 392 453 1 988 018

2 976 553 2 565 118



2006 2005

$’000 $’000

16 Property, plant and equipment Land at fair value 6 500 6 000

Building at fair value 28 417 22 926

Less accumulated depreciation (3 417) (1 626)

25 000 21 300

Total property 31 500 27 300

Plant and equipment 24 968 20 112

Less accumulated depreciation (9 630) (7 284)

Total plant and equipment 15 338 12 828

Total property, plant and equipment 46 838 40 128

Plant and Note Land Building equipment Total

$’000 $’000 $’000 $’000

Reconciliation of property, plant and equipment

Carrying amount at the beginning of the year 6 000 21 300 12 828 40 128

Additions - 57 6 994 7 051

Disposals - - (1 115) (1 115)

Depreciation - (1 428) (3 369) (4 797)

Revaluation increments 22 500 5 071 - 5 571

Carrying amount at the end of the year 6 500 25 000 15 338 46 838

Valuation of land and building

An independent valuation of land and building was performed as at 30 June 2006 by McGees Property. The valuation basis of land and building is fair value, being the amounts for which the assets could be exchanged between willing parties in an arms length transaction, having regard to the highest and best use of the asset. This has resulted in a revaluation increment of $5.571 million being recognised in the asset revaluation reserve as at 30 June 2006.



2006 2005

$’000 $’000

17 Intangible assets Computer software at cost 31 504 27 379

Less accumulated amortisation (15 519) (12 208)

15 985 15 171

Computer software at cost—in development 1 042 1 643

17 027 16 814

Computer Computer software – in software development Total

$’000 $’000 $’000

Reconciliation of intangible assets

Carrying amount at the beginning of the year 15 171 1 643 16 814

Additions– internally developed - 5 010 5,010

Transfers 4 125 (4 125) -

Amortisation (3 311) - (3 311)

Impairment losses - (1 486) (1 486)

Carrying amount at the end of the year 15 985 1 042 17 027

Amortisation of intangible assets and impairment losses are included in the line item underwriting expenses in the income statement.

2006 2005

$’000 $’000

18 Payables Current:

Trade creditors 2 668 2 810

Premium in credit 682 538

Claims creditors 9 229 481

12 579 3 829

19 Unearned premium liability Unearned premium as at beginning of the year 519 2 496

Deferral of premiums on contracts written in the period 3 107 12

Earning of premiums written in previous periods (350) (1 989)

Unearned premium at the end of the year 3 276 519



2006 2005

$’000 $’000

20 Outstanding claims liability

(a) Gross outstanding claims liability

Central estimate 1 326 700 2 423 300

Risk margin 170 000 388 900

Claims handling expenses 135 800 169 000

1 632 500 2 981 200

Discount (178 500) (846 600)

1 454 000 2 134 600

Represented by:

Current 612 900 609 000

Non-current 841 100 1 525 600

1 454 000 2 134 600

(b) Reconciliation of movement during year

Carrying amount at the beginning of the year 2 134 600 1 857 100

Effect of changes in assumptions1 (704 474) 234 698

Provisions made during the year (current injury year) 848 775 768 828

Payments made during the year (824 901) (726 026)


1 Included in effect of changes in assumptions is a change in the reserve for asbestos-related claims of $599.200 million. This is primarily due to a change in the approach to reserving for latent onset injury claims as a result of a change in the legislation. Refer note 2.

(c) Claims development

The following tables show the development of net undiscounted outstanding claims relative to the ultimate expected claims for the five most recent injury years.

2002 2003 2004 2005 2006 Total

$’000 $’000 $’000 $’000 $’000 $’000

Estimate of ultimate claims cost:

At end of injury year 5 204 100 601 000 626 000 619 900 693 900

One year later 4 779 600 573 500 565 900 599 900

Two years later 4 505 300 506 700 545 200

Three years later 4 997 400 484 800

Four years later 4 185 800

Current estimate of cumulative claims cost 4 185 800 484 800 545 200 599 900 693 900 6 509 600

Cumulative payments (4 028 600) (396 800) (367 200) (301 100) (188 200) (5 281 900)

Net outstanding claims—undiscounted 157 200 88 000 178 000 298 800 505 700 1 227 700

Discount (20 200) (9 800) (18 200) (31 600) (54 900) (134 700)

Net outstanding claims—discounted 137 000 78 200 159 800 267 200 450 800 1 093 000

Claims handling expenses 10 500 4 500 10 400 24 500 73 100 123 000

Risk margin 17 200 9 600 19 800 33 900 60 900 141 400

Provision for net outstanding claims—discounted 164 700 92 300 190 000 325 600 584 800 1 357 400



Note 2006 2005

$’000 $’000

21 Provisions Provision for lease restoration 1 042 1 111

Represented by:

Current 1(s) 355 771

Non-current 1(s) 687 340

1 042 1 111

Reconciliation of provision for lease restoration


Provisions recognised during the year 271 253

Reductions in provision as a result of payments made during the year (138) (269)

Unused provision reversed during the period (177) -

Discount rate adjustments (25) (30)


Land Building Total

$’000 $’000 $’000

22 Asset revaluation reserve by class Carrying amount at the beginning of the year 1 120 201 1 321

Revaluation increments 500 5 071 5 571

Tax effect on revaluation (150) (1 521) (1 671)


The asset revaluation reserve is used to record increments and decrements on the revaluation of land and building to fair value.

2006 2005

$’000 $’000

23 Investment fluctuation reserve Carrying amount at the beginning of the year 284 607 296 276

Transfer (to)/from accumulated surplus 609 428 (11 669)


The investment fluctuation reserve is held to provide financial stability in lieu of volatility in the investment markets.



2006 2005

$’000 $’000

24 Operating leases

(a) Operating lease commitments

Non-cancellable operating leases are payable as follows:

Not later than one year 2 256 2 201

Later than one year and not later than five years 6 253 3 730

Later than five years 3 914 4 001

12 423 9 932

WorkCover Queensland leases office premises at various regional locations throughout Queensland under non-cancellable operating leases expiring within one to ten years. The leases have varying terms, including inflation escalation clauses and renewal rights. On renewal, the terms of the lease are renegotiated.

(b) Operating lease receivables

WorkCover Queensland has one lease agreement with respect to the 280 Adelaide Street building.

Future minimum rental revenues under this non-cancellable operating lease at balance date is as follows:

Not later than one year 181 176

181 176

25 Consultancy fees Human resource management 20 49

Finance/accounting 46 20

Professional/technical 705 494

771 563



2006 2005

$’000 $’000

26 Notes to the cash flow statement

(a) Reconciliation of cash

Cash includes cash at bank and imprest accounts.

WorkCover has no unused borrowing or overdraft facilities 7 220 12 509

(b) Reconciliation of net cash provided by operating activities to operating result

Operating result for the year 669 104 86 731

Investment income—change in fair value of financial assets (122 736) (169 638)

Net loss on disposal of property, plant and equipment 268 156

Depreciation of property, plant and equipment 4 797 4 299

Amortisation of intangible assets 3 311 5 590

Impairment loss on intangible assets 1 486 -

Movement in equity due to separation from Q-COMP - (173)

Tax effect of revaluation on land and building (1 671) (567)

Change in operating assets and liabilities:

(Decrease)/increase in income tax payable 238 722 -

(Decrease)/increase in deferred income taxes payable 44 527 18 432

(Increase)/decrease in prepayments (2 226) (890)

(Increase)/decrease in receivables 125 418 (49 482)

(Decrease)/increase in payables 12 525 (15 662)

(Decrease)/increase in provisions (678 216) 276 270

Cash flow from operating activities 295 309 155 066

27 Employee benefits Aggregate liability for employee benefits, including on-costs 18 227 15 566

Represented by:

Current:

Accrued wages and other benefits 2 292 960

Accrued annual leave 5 010 4 946

Provision for long service leave 7 643 4 731

Provision for termination benefits 752 850

15 697 11 487

Non-current:

Provision for long service leave 2 530 4 079

2 530 4 079

The present value of long service leave not expected to be settled within twelve months of reporting date has been calculated using the following rates:

Assumed rate of increase for contract salaries 4.0% 4.0%

Assumed rate of increase for non-contract salaries 7.0% 6.0%

Discount rate 5.8% 5.1%

Settlement term (years) 6.3 8.3

Defined contribution superannuation fund

WorkCover makes contributions to a defined contribution superannuation fund. The amount recognised as an expense was $6.213 million for the year ended 30 June 2006 (2005: $5.958 million).



28 Key management personnel disclosures

Details of key management personnel

Directors

I Brusasco AM Chairman (non-executive)

T A White AO Deputy Chairman (non-executive)

W P Ludwig OAM Director (non-executive)

R W Monaghan Director (non-executive)

H W Shand Director (non-executive)

H A Skippen Director (non-executive)

R C McNally Director (non-executive)—appointed 1 July 2006

Chief Executive Offi cer (CEO)

A J Hawkins Chief Executive Officer

Senior executives

T A Barrenger General Manager Business Solutions—appointed 19 June 2006

D E Heley General Manager Finance

G E Lawson General Manager Common Law

E E McMahon General Manager Customer Services

R W J Miller General Manager Human Resources

L L Rusan General Manager Operations—appointed 3 October 2005

L D Kincade General Manager Information Technology—resigned 3 February 2006

Other than the appointment of Ms R C McNally, there were no other changes of key management personnel after the reporting date and the date the financial report was authorised for issue.

Compensation of key management personnel

Compensation policy Compensation levels for key management personnel are competitively set to attract and retain appropriately qualified

and experienced directors, the CEO and senior executives.

Directors

The compensation of directors is approved by the Governor-in-Council as part of the terms of appointment.

Each director receives a fee for being a director of WorkCover Queensland.

CEO and senior executives

The board of directors is responsible for determining and reviewing compensation arrangements for the CEO and senior executives.

Remuneration and other terms of employment for the CEO and each senior executive are formalised in executive employment contracts. Notice periods range from 6 to 12 months.

The CEO and senior executives are given the opportunity to receive their fixed remuneration in a variety of forms including cash and fringe benefits such as motor vehicles. Fixed remuneration is reviewed annually to ensure the CEO’s and senior executive’s pay is competitive with the market.



Short-term Post employment

28 Key management personnel disclosures (continued) Details of compensation

Details of the remuneration of the directors and key management personnel of WorkCover Queensland are set out in the following tables:

Other long- Termi- Salary Cash Non- Super- term nation & fees bonus monetary Other2 annuation Other benefi ts benefi ts Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Directors

I Brusasco AM Chairman

2006 55 - - 4 - - - - 59

2005 55 - - 3 - - - - 58

T A White AO Deputy Chairman

2006 35 - - 4 4 - - - 43

2005 35 - - 3 4 - - - 42

W P Ludwig OAM Director

2006 25 - - 4 - - - - 29

2005 25 - - 3 - - - - 28

R W Monaghan1

Director

2006 25 - - 4 - - - - 29

2005 25 - - 3 - - - - 28

H W Shand Director

2006 25 - - 4 2 - - - 31

2005 25 - - 3 2 - - - 30

H A Skippen Director

2006 25 - - 4 2 - - - 31

2005 25 - - 3 2 - - - 30

D I Nissen Director: Resigned 1 October 2004

2005 6 - - 3 1 - - - 10

Total compensation: Directors

2006 190 - - 24 8 - - - 222

2005 196 - - 21 9 - - - 226

1 Salary and fees are paid to the Australian Liquor, Hospitality and Miscellaneous Workers’ Union, Queensland Branch.2 Short-term other benefits received by all directors relates to an allocation of insurance premiums paid by WorkCover in respect of their duties.



Short-term Post employment

28 Key management personnel disclosures (continued) Details of compensation (continued)

Other long- Termi- Salary Cash Non- Super- term nation & fees bonus monetary1 Other2 annuation Other benefi ts benefi ts Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

CEO and senior executives

A J Hawkins Chief Executive Offi cer

2006 312 - 14 4 13 - - - 343

2005 301 - 14 3 12 - - - 330

T A Barrenger General Manager Business Solutions(Appointed: 19 June 2006)

2006 6 - - - 1 - - - 7

D E Heley General Manager Finance

2006 130 - 17 4 13 - - - 164

2005 121 - 18 3 13 - - - 155

G E Lawson General Manager Common Law

2006 105 - 6 4 90 - - - 205

2005 152 - 6 3 35 - - - 196

E E McMahon General Manager Customer Services

2006 129 - 6 4 67 - - - 206

2005 146 - 5 3 41 - - - 195

R W J Miller General Manager Human Resources

2006 128 - 6 4 26 - - - 164

2005 123 - 5 3 24 - - - 155

L L Rusan General Manager Operations (Appointed: 3 October 2005)

2006 103 - 5 3 12 - - - 123

L D Kincade General Manager Information Technology (Resigned: 3 February 2006)

2006 81 - 2 2 37 - - 142 264

2005 139 - - 3 56 - - - 198

Total compensation: CEO and senior executives

2006 994 - 56 25 259 - - 142 1 476

2005 982 - 48 18 181 - - - 1 229

1 Short-term non-monetary benefits relate to fringe benefits provided to the CEO and senior executives.2 Short-term other benefits received by all key management personnel relates to an allocation of insurance premiums paid by WorkCover

in respect of their duties.



29 Related parties

Mr I Brusasco AM is a Director of QIC which managed WorkCover’s funds during the period under normal terms and conditions. Total fees paid or payable to QIC in respect of investment management expenses during the year ended 30 June 2006 was $4.952 million (2005: $4.274 million).

Terms and conditions of any transaction with directors, CEO, senior executives and their related entities were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-director or executive related entities on an arm’s length basis.

2006 2005

$’000 $’000

30 Auditors’ remuneration Amounts paid or payable to the auditors for:

Audit services

Auditors of the organisation Queensland Audit Offi ce

Audit of the financial report 164 130

Other auditors Audit of the financial report 25 35

Non-audit services - -

189 165

Other auditors relate to review of income tax effect provision balances that were relied on by the auditors of the organisation when completing their audit of the financial report. No non-audit services have been provided.



31 Additional financial instruments disclosure

(a) Interest rate risk

WorkCover’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities are set out below:

Weighted average Floating Non- interest interest 1 year Over 1 year More than interest rate rate or less to 5 years 5 years bearing Total

% $’000 $’000 $’000 $’000 $’000 $’000

2006

Financial assets

Cash 4.7 7 212 - - - 8 7 220

Receivables 11.3 - 211 - - 10 081 10 292

Investments 14.3 2 976 553 - - - - 2 976 553

Financial liabilities

Payables - - - - - 12 579 12 579

Unearned premium - - - - - 3 276 3 276

Provisions - - - - - 1 042 1 042

Weighted average Floating Non- interest interest 1 year Over 1 year More than interest rate rate or less to 5 years 5 years bearing Total

% $’000 $’000 $’000 $’000 $’000 $’000

2005

Financial assets

Cash 4.5 12 500 - - - 9 12 509

Receivables 11.3 - 469 - - 17 966 18 435

Investments 13.9 2 565 118 - - - - 2 565 118

Financial liabilities

Payables - - - - - 3 829 3 829

Unearned premium - - - - - 519 519

Provisions - - - - - 1 111 1 111

Fixed interest maturing in

Fixed interest maturing in



31 Additional financial instruments disclosure (continued)

(b) Credit risk exposure

The maximum exposure to credit risk at balance date in relation to each class of recognised financial assets is the carrying amount of those assets net of any provisions for impairment.

WorkCover has determined the appropriate type and mix of investments and has authorised its investment manager to operate within this approved investment strategy. The investment manager provides regular reports on the investment performance to WorkCover. As part of the management of the portfolio, derivative financial instruments are entered into.

No significant concentration of credit risks have been identified, as exposure is spread over a large number of customers.

(c) Net fair values of financial assets and liabilities

The carrying amounts of financial assets and liabilities approximate their net fair values.

Bank guarantees held on behalf of self-insurers, are accounted for as unrecognised financial assets.

Bank guarantees have increased from $406.472 million in 2005 to $447.223 million in 2006. A net fair value has not been ascribed for these.

32 Contingent liabilities (a) In the normal course of business, WorkCover is exposed to legal issues, including litigation arising out of insurance

policies. The directors do not believe that there are any potential material litigation exposures at balance date.

(b) There are no other potential material litigation exposures known at balance date.

33 Segment information WorkCover operates solely within Queensland dealing in workers’ compensation injury insurance.

34 Events after balance sheet date No material events have taken place after the balance sheet date.



35 Explanation of transition to Australian equivalents to International Financial Reporting Standards

(1) Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRS (AIFRS)

(a) At the date of transition to AIFRS: 1 July 2004

Effect of Previous transition Note AGAAP to AIFRS AIFRS

$’000 $’000 $’000

Current assets Cash assets 8 506 - 8 506 Recoveries receivable on outstanding claims 30 300 - 30 300 Receivables 21 911 - 21 911 Prepayments 2 531 - 2 531 Investments 538 400 - 538 400

Total current assets 601 648 - 601 648

Non-current assets Recoveries receivable on outstanding claims 129 700 - 129 700 Investments A 1 742 257 (27 000) 1 715 257 Property, plant and equipment B 14 104 21 727 35 831 Deferred tax assets C 31 623 (5 169) 26 454 Intangible assets D 19 947 (214) 19 733

Total non-current assets 1 937 631 (10 656) 1 926 975

Total assets 2 539 279 (10 656) 2 528 623

Current liabilities Payables E 17 218 (694) 16 524 Unearned premium 2 496 - 2 496 Outstanding claims liability 568 700 - 568 700 Provisions 5 377 - 5 377

Employee benefits E 5 236 694 5 930

Total current liabilities 599 027 - 599 027

Non-current liabilities Deferred tax liabilities C 9 904 (5 726) 4 178 Outstanding claims liability 1 288 400 - 1 288 400 Provisions 180 - 180 Employee benefits E 6 072 - 6 072

Total non-current liabilities 1 304 556 (5 726) 1 298 830

Total liabilities 1 903 583 (5 726) 1 897 857

Net assets 635 696 (4 930) 630 766

Equity Investment fluctuation reserve 296 276 - 296 276 Accumulated surplus F 339 420 (4 930) 334 490

Total equity 635 696 (4 930) 630 766



35 Explanation of transition to Australian equivalents to International Financial Reporting Standards (continued)

(1) Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRS (AIFRS) (continued)

(b) At the end of the last reporting period under previous AGAAP: 30 June 2005


$’000 $’000 $’000

Current assets Cash assets 12 509 - 12 509 Recoveries receivable on outstanding claims 31 900 - 31 900 Receivables 18 435 - 18 435 Prepayments 3 421 - 3 421 Investments 577 100 - 577 100

Total current assets 643 365 - 643 365

Non-current assets Recoveries receivable on outstanding claims 182 100 - 182 100 Investments A 2 015 318 (27 300) 1 988 018 Property, plant and equipment B 17 340 22 788 40 128 Deferred tax assets C 11 417 (2 948) 8 469 Intangible assets D 17 404 (590) 16 814

Total non-current assets 2 243 579 (8 050) 2 235 529

Total assets 2 886 944 (8 050) 2 878 894

Current liabilities Payables E 4 789 (960) 3 829 Unearned premium 519 - 519 Outstanding claims liability 609 000 - 609 000 Provisions 771 - 771 Employee benefits E 6 506 4 981 11 487

Total current liabilities 621 585 4 021 625 606

Non-current liabilities Deferred tax liabilities C 7 924 (3 300) 4 624 Outstanding claims liability 1 525 600 - 1 525 600 Provisions 340 - 340 Employee benefits E 8 100 (4 021) 4 079

Total non-current liabilities 1 541 964 (7 321) 1 534 643

Total liabilities 2 163 549 (3 300) 2 160 249

Net assets 723 395 (4 750) 718 645

Equity Investment fluctuation reserve 284 607 - 284 607 Asset revaluation reserve G - 1 321 1 321 Accumulated surplus F 438 788 (6 071) 432 717

Total equity 723 395 (4 750) 718 645




(2) Reconciliation of operating result for the year ended 30 June 2005


$’000 $’000 $’000

Premium revenue 782 770 - 782 770

Gross claims expense H (923 728) (79 798) (1 003 526)

Claims recoveries revenue H - 79 798 79 798

Net claims incurred (923 728) - (923 728)

Underwriting expenses I (64 621) (1 204) (65 825)

Underwriting result (205 579) (1 204) (206 783)

Investment income J 319 568 3 453 323 021

Other income K - 558 558

Other expenses L - (4 308) (4 308)

Operating result for the year before income tax equivalents 113 989 (1 501) 112 488

Income tax equivalents expense M (26 117) 360 (25 757)

Operating result for the year 87 872 (1 141) 86 731

(3) Reconciliation of cash flow statement for the year ended 30 June 2005

There have been no material changes to the cash flow statement as a result of the transition to AIFRS.



1 July 30 June 2004 2005


(4) Notes to the reconciliations

It should be noted that adjustments include mandated policy changes as required by Queensland Treasury which have coincided with the AIFRS adjustments.

A. Under previous AGAAP, land and buildings were classified as investments. An adjustment was required on transition to reclassify land and building from investments to property, plant and equipment. (27 000) (27 300)

B. Reclassification of the land and building from investments to property, plant and equipment. 27 000 27 300

The asset recognition threshold mandated by Queensland Treasury has increased from $2 000 to $5 000. An adjustment was required to write-off previously capitalised assets below the new threshold. (5 273) (4 512)

21 727 22 788

C. In accordance with AASB 112 Income Taxes, deferred tax balances were determined using the balance sheet method whereby temporary differences are calculated based on the carrying amounts of WorkCover’s assets and liabilities in the balance sheet and their associated tax bases. In addition, current and deferred taxes attributable to amounts recognised directly in equity have been recognised in equity.

Deferred tax assets

Tax adjustments including the impact of above change in income tax accounting basis as well as the cumulative tax effect of all other AIFRS adjustments. (5 169) (2 948)

Deferred tax liabilities

Tax adjustments including the impact of above change in income tax accounting basis as well as the cumulative tax effect of all other AIFRS adjustments. (5 726) (3 300)

D. The asset recognition threshold mandated by Queensland Treasury has increased from $50 000 to $100 000. An adjustment was required to write-off previously capitalised intangible assets below the new threshold. (214) (590)

E. Under previous AGAAP, accrued wages and other benefits were disclosed under payables. In accordance with AASB 119 Employee Benefi ts, accrued wages and other benefits are classified as short-term employee benefits and recognised in the balance sheet under current employee benefits. (694) (960)

In accordance with AASB 101 Presentation of Financial Statements, annual leave and long service leave previously classified as non-current has been re-classified as a current employee benefit. There was no reclassification required at transition date.

Current employee benefits - 4 021

Non-current employee benefits - (4 021)

Employee benefits

The effects on employee benefits of the changes set out above are as follows:

– Accrued wages and other benefits 694 960

– Current annual leave and long service leave provisions - 4 021

694 4 981



Note 1 July 30 June 2004 2005


(4) Notes to the reconciliations (continued)

F. Accumulated surplus

The effects on accumulated surplus of the changes set out above are as follows:

– Property, plant and equipment B (5 273) (4 512)

– Deferred tax assets C (5 169) (2 948)

– Deferred tax liabilities C 5 726 3 300

– Intangible assets D (214) (590)

– Asset revaluation reserve G - (1 321)

(4 930) (6 071)

G. As permitted by the election available under AASB 1, WorkCover has used a previous AGAAP valuation of land and building as at the date of transition to AIFRS as its deemed cost at that date. Accordingly, the asset revaluation reserve has not been restated in preparing the opening AIFRS balance sheet. The asset revaluation reserve has been credited at 30 June 2005 to account for the revaluation increment in land and building as at 30 June 2005. - 1 321

H. Net claims incurred

In accordance with the revised AASB 1023 General Insurance Contracts, non-reinsurance recoveries should not be netted off against claims expense in the income statement. An adjustment was required on transition to recognise claim recoveries revenue on the income statement, previously netted off against claims expense.

Gross claims expense (79 798)

Claims recoveries revenue 79 798

I. Underwriting expenses

Adjustments to underwriting expenses due to transition to AIFRS and mandated changes by Queensland Treasury are as follows:

– Adjustment to computer expenses due to mandated policy change in asset recognition threshold for software (463)

– Adjustment to amortisation of intangible assets due to mandated policy change in asset recognition threshold for software 87

– Adjustment to other expenses due to mandated policy change in asset recognition threshold for plant and equipment (651)

– Adjustment to depreciation expense due to mandated policy change in asset recognition threshold for plant and equipment 1 418

– Adjustment to loss on disposal of plant and equipment due to mandated policy change in asset recognition threshold 9

– Adjustment to depreciation expense on reclassification of building from investments to property, plant and equipment (1 604)

(1 204)



30 June 2005


(4) Notes to the reconciliations (continued)

J. Investment income

Adjustments to investment income following transition to AIFRS as follows:

– Reclassification of property income to other income following reclassification of land and buildings from investments to property, plant and equipment (555)

– Reclassification of revaluation increment previously recognised as an unrealised gain on investment to asset revaluation reserve following reclassification of land and building from investments to property, plant and equipment (300)

– Separate recognition of investment fees and expenses as other expenses 4 274

– Separate recognition of property expenses as other expenses following reclassification of land and building from investments to property, plant and equipment 34

3 453

K. Other income

Adjustments to other income following transition to AIFRS are as follows:

– Reclassification of property income to other income following reclassification of land and building from investments to property, plant and equipment 555

– Separate recognition of sundry income as other income 3

558

L. Other expenses

Adjustments to other expenses following transition to AIFRS are as follows:

– Separate recognition of investment fees and expenses as other expenses (4 274)

– Separate recognition of property expenses as other expenses (34)

(4 308)

M. Income tax equivalents expense

Tax adjustments including the impact of change in income tax accounting basis under AASB 112 Income Taxes as well as the cumulative tax effect of all above AIFRS adjustments. 360


Actuarial certifi cateon outstanding claim liabilities as at 30 June 2006

PricewaterhouseCoopers Actuarial was requested by WorkCover Queensland to advise on its provisions for outstanding claims liabilities at 30 June 2006.

Valuation report Full details of data, methodology and assumptions are set out in our report dated 2 August 2006. This report was prepared, to the best of our knowledge, in compliance with the requirements of Professional Standard 300 of the Institute of Actuaries of Australia.

Basis of estimates The adopted provision as at 30 June 2006 is $1,357.4 million, comprising our central estimate of the liability for outstanding claims and a prudential margin. The adopted provision is net of recoveries. In principle all of the valuation assumptions have been selected so as to yield a central estimate which is not knowingly above or below the ultimate cost of claims.

The central estimate:

• is discounted - i.e. allows for investment income to be earned on actual or notional assets supporting the liabilities;

• allows for future claims infl ation;

• includes a loading for claims handling expenses; and

• complies with the requirements of Australian Accounting Standard AASB1023.

A prudential margin has been included to allow for the risk and uncertainties inherent in the estimation of outstanding claims liabilities. The margin is expressed as a percentage of the central estimate. In recognition of the overall uncertainty in the claims experience, the WorkCover Board have adopted a prudential margin at 30 June 2006 of 11.6%. This is lower than the 15% margin adopted at 30 June 2005. The adopted margin is intended to increase the probability of suffi ciency of the provision to 80%.

Qualifications It is not possible to estimate the outstanding claims liabilities with certainty. Deviations from our estimates are normal and are to be expected. The outcome is dependant on events which are yet to occur and which are impossible to predict, including legislative, social and economic forces. The provisions we have recommended are based on assumptions which we consider to be reasonable in current circumstances.

Chris Latham Lisa Simpson

Fellow of the Institute of Fellow of the Institute ofActuaries (London) Actuaries of Australia

Fellow of the Institute of Actuaries of Australia

10 August 2006


These general purpose fi nancial statements have been prepared pursuant to the provisions of the Workers’ Compensation and Rehabilitation Act 2003 and the Financial Administration and Audit Act 1977, and other prescribed requirements. We certify that in our opinion -

(i) the prescribed requirements for establishing and keeping of accounts have been complied with in all material respects; and

(ii) the statements have been drawn up so as to present a true and fair view, in accordance with prescribed accounting standards, of the transactions of WorkCover Queensland for the fi nancial year ended 30 June 2006 and of the fi nancial position at the end of that year.

29 August 2006

I Brusasco AM A J Hawkins

Chairman Chief Executive Offi cer

Certifi cate of WorkCover Queensland


In the opinion of the Directors of WorkCover Queensland:

(a) (i) the fi nancial report of WorkCover Queensland, has been drawn up so as to give a true and fair view of the results and cash fl ows for the period from 1 July 2005 to 30 June 2006 and the state of affairs as at 30 June 2006 of WorkCover Queensland;

(ii) at the date of this declaration, there are reasonable grounds to believe that WorkCover Queensland will be able to pay its debts as and when they become due and payable.

(b) The fi nancial report of WorkCover Queensland has been prepared in accordance with Australian Accounting Standards, other mandatory requirements and the Workers’ Compensation and Rehabilitation Act 2003.

Signed in accordance with a resolution of the Board of Directors dated at Brisbane this 29th day of August 2006.

I Brusasco AM T A White AO

Chairman Deputy Chairman

Declaration by directors


Matters relating to the electronic presentation of the audited financial report The audit report relates to the fi nancial report of WorkCover Queensland for the fi nancial year ended 30 June 2006 included on WorkCover Queensland’s web site. The directors’ are responsible for the integrity of the WorkCover Queensland’s web site. We have not been engaged to report on the integrity of WorkCover Queensland’s web site. The audit report refers only to the statements named below. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of the fi nancial report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited fi nancial report, available from WorkCover Queensland, to confi rm the information included in the audited fi nancial report presented on this web site.

These matters also relate to the presentation of the audited fi nancial report in other electronic media including CD Rom.

ScopeThe financial reportThe fi nancial report of WorkCover Queensland consists of the income statement, balance sheet, statement of changes in equity, cash fl ow statement, and notes to and forming part of the fi nancial report and certifi cates given by the chairman and offi cer responsible for the fi nancial administration of WorkCover Queensland, for the year ended 30 June 2006.

The Board’s responsibilityThe Board is responsible for the preparation and true and fair presentation of the fi nancial report, the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error and for the accounting policies and accounting estimates inherent in the fi nancial report.

Audit approachAs required by law, an independent audit was conducted in accordance with QAO Auditing Standards, which incorporate the Australian Auditing Standards, to enable me to provide an independent opinion whether in all material respects the fi nancial report is presented fairly, in accordance with the prescribed requirements, including any mandatory fi nancial reporting requirements as approved by the Treasurer for application in Queensland.

Audit procedures included:• examining information on a test/sample basis to provide evidence supporting the amounts and disclosures in the

fi nancial report

• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of signifi cant accounting estimates made by the Board

• obtaining written confi rmation regarding the material representations made in conjunction with the audit and

• reviewing the overall presentation of information in the fi nancial report.

IndependenceThe Financial Administration and Audit Act 1977 promotes the independence of the Auditor-General and QAO authorised auditors.

The Auditor-General is the auditor of all public sector entities and can only be removed by Parliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised.

The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters, which in the Auditor-General’s opinion are signifi cant.

Audit opinionIn accordance with s.46G of the Financial Administration and Audit Act 1977:

(a) I have received all the information and explanations which I have required and

(b) in my opinion

(i) the prescribed requirements in respect of the establishment and keeping of accounts have been complied with in all material respects and

(ii) the fi nancial report has been drawn up so as to present a true and fair view, in accordance with the prescribed accounting standards of the transactions of WorkCover Queensland for the fi nancial year 1 July 2005 to 30 June 2006 and of the fi nancial position as at the end of that year.

P J DAJCZ CPA Queensland Audit Offi ceAs Delegate of the Auditor-General of Queensland Brisbane

Independent audit reportTo the Board of WorkCover Queensland


At WorkCover, some of our terms are unique or have special meaning. Below is a list of terms used in this report and their meaning.

Accident Insurance Policy

An Accident Insurance Policy is a compulsory workers’ compensation insurance policy for employers engaging workers. The policy covers the employer’s liability for workers’ compensation and damages arising out of a work-related injury sustained by their worker.

Average premium rate

The average premium rate is a rate per $100 of wages. It is calculated by averaging net premium assessed for the year as a proportion of total wages declared by all employers for that year.

Common law claim

A common law claim is made by an injured worker who commences common law action through the courts against their employer for negligence (they are ‘suing’ their employer). The courts award common law damages payments for economic loss, pain and suffering, legal costs, and medical and hospital costs. WorkCover may pay all damages awarded to the injured worker, including legal and investigative costs as part of an employer’s Accident Insurance Policy.

Declaration of Wages form

WorkCover uses the Declaration of Wages form to collect the information needed to assess an employer’s Accident Insurance Policy premium. This form must be completed and returned to WorkCover by 31 August each year.

Experience based rating

Experience based rating (EBR) is the system used to calculate the amount of premium due for an employer’s Accident Insurance Policy. It takes into account an employer’s individual wage and claims experience and the wage and claims experience of their industry.

Health provider Health provider refers to any medical or allied health provider (for example a doctor, medical specialist, physiotherapist, chiropractor or occupational therapist) who is registered with the relevant professional board (e.g. Physiotherapist Board of Queensland).

Host employer A host employer is an employer who agrees to host an injured worker at their workplace when the worker is unable to participate in workplace rehabilitation with their original employer. These programs normally run from three to six weeks. A host employer is not obliged to employ a person after their program has ended.

Industry rate The WorkCover industry rate is the amount of premium per $100 of wages for a specifi c WorkCover Industry Classifi cation (WIC) code. The WIC is used in the EBR calculation.

Injury An injury, as defi ned by the Workers’ Compensation and Rehabilitation Act 2003 is, ‘A personal injury arising out of, or in the course of, employment if the employment is a signifi cant contributing factor to the injury’.Some examples of injuries include:

• a cut or fracture

• a disease (example asbestos or Q-fever)

• industrial deafness

• psychiatric or psychological disorders such as stress or depression

• aggravation of a pre-existing condition

• death from an injury, disease or aggravation of a disease.

Lump sum compensation

If a worker is permanently impaired as a result of their work-related injury, they are entitled to lump sum compensation. If a worker receives lump sum compensation, they will no longer be entitled to receive further statutory compensation benefi ts.

Premium rate The rate of premium payable per $100 of wages for an individual employer.

Glossary


Glossarycontinued

Q-COMP Q-COMP is the Queensland Workers’ Compensation Regulatory Authority. Q-COMP’s objective is to ensure equitable, impartial and balanced regulatory services for Queensland’s injured workers, employers and insurers. These regulatory services include claim and premium review, self-insurance, workplace rehabilitation, medical assessment tribunals and scheme development.

Rehabilitation Under workers’ compensation legislation, the purpose of rehabilitation is to ensure the worker’s safest and earliest possible return-to-work or to maximise the worker’s independent functioning. Rehabilitation for return-to-work (sometimes called occupational, vocational or workplace rehabilitation) can include treatment from a range of health providers, assessments of work capacity and suitable duties programs. Under legislation, workers and employers must take every reasonable step to participate in rehabilitation and return-to-work programs.

Statutory (no-fault) claim

A statutory or no-fault claim is when a worker is compensated for a work-related injury with payments and benefi ts prescribed in the Workers’ Compensation and Rehabilitation Act 2003. These payments and benefi ts are referred to as statutory compensation and may include weekly payments as income replacement, lump sums to compensate for permanent impairment, and hospital and medical expenses. Statutory claims are administered on a ‘no fault’ basis. That is, it doesn’t matter if it is the worker’s or the employer’s fault that the injury occurred, compensation is still paid.

Statutory compensation

Statutory compensation may include weekly payments as income replacement, lump sums to compensate for permanent impairment, and hospital and medical expenses. These payments and benefi ts are prescribed in the Workers’ Compensation and Rehabilitation Act 2003.

Wages Wages are the total amount an employer pays to a worker as defi ned by Schedule 6 of the Workers’ Compensation and Rehabilitation Act 2003.

Worker A ‘worker’ for the purposes of the Workers’ Compensation and Rehabilitation Act 2003 is an individual employed under a Contract of Service (sect 11) or specifi cally included under Schedule 2 Part 1, unless specifi cally excluded under Schedule 2 Part 2.


Page number

Accident insurance 2, 3, 21

Achievement/s 9, 19, 22, 33

AIFRS 38

Aim/s 22, 29, 31, 35

Allied health 8, 9, 10, 19, 20, 24, 27, 31

Asbestos 6, 9, 19, 23, 25, 28, 36, 37, 38

Audit committee 10, 11, 13, 14, 15

Average premium rate 1, 6, 8, 18, 19, 20, 24, 25, 36, 37

Benefi ts 3, 6, 7, 8, 10, 19, 21,25, 29, 33, 36, 37, 38

Board 6, 7, 10, 11, 13, 14, 15, 16, 17, 19, 33, 34, 38

Case management 18, 19, 23, 27, 30, 31, 35

CEO 7, 8, 9, 10, 13, 14, 15, 20, 24, 35

Chairman 6, 10, 11, 13

Common law claim/s 2, 8, 19, 20, 25, 37, 38

Complaints 8, 9, 16, 26

Compliance 4, 11, 12, 14, 16, 17, 24, 26

Customer satisfaction 1, 6, 7, 9, 13, 16, 19, 20, 23

Decision making timeframes

1, 8, 18, 19, 20, 25, 30

Department of Industrial Relations

3, 18, 32

Employer/s 1, 2, 3, 4, 6, 7, 8, 9, 10, 16, 18, 19, 20, 21, 23, 24, 25, 26, 27, 29, 30,

31, 32, 33, 34, 36, 37, 38

Expense/s 10, 21, 29, 37, 38

Freedom of information (FOI)

15, 16

Future 6, 7, 9, 19, 26, 31, 32

Goals 2, 3, 6, 7, 8, 9, 13,

16, 18, 19, 34, 35

Government 3, 4, 6, 7, 9, 10, 15, 17, 21, 22, 24, 36

Household workers insurance

21

Industry 3, 4, 7, 8, 9, 10, 13, 15, 17, 22, 24, 25, 26, 30

Injured worker/s 1, 2, 3, 6, 7, 8, 9, 15, 18, 19, 20, 23, 24, 25, 26, 27, 28, 29, 30, 31, 36, 37, 38

Index

Page number

Internal audit 10, 14

Leadership 7, 18, 32, 35

Legislation 6, 9, 16, 26, 27, 33, 36, 38

Medical 4, 7, 8, 9, 11, 18, 19, 20, 21, 23, 24, 25, 26, 27, 29, 30, 31, 36, 37

Payment/s 6, 19, 20, 21, 22, 23, 24, 25, 26, 28, 31, 37

Performance 3, 4, 6, 10, 13, 17, 18, 19, 27, 29, 32, 34

Planning 7, 13, 14, 23, 27, 29, 30, 31, 34

Premium/s 1, 3, 4, 6, 7, 8, 9, 10, 13, 17, 18, 19, 20, 23, 24, 25, 26,

29, 30, 35, 36, 37, 38

Privacy 16

Q-COMP 4, 31, 37, 38

Rehabilitation 1, 2, 3, 7, 8, 10, 13, 15, 21, 24, 25, 26, 27, 29, 30, 31, 34,

36, 37

Research 1, 6, 7, 8, 9, 13, 20, 23, 24

Return to work 1, 2, 4, 6, 7, 8, 18, 24, 27, 28, 29, 30, 31

Revenue 36, 37

Risk management 14

Satisfaction 1, 6, 7, 8, 9, 13, 16, 18, 19, 20, 23, 25, 31, 32, 35

Self-insurers 3

Stakeholder/s 6, 7, 8, 9, 10, 13, 16, 24, 26, 31, 38

Statutory claims 1, 3, 8, 19, 21, 22, 25, 28, 35, 37

Structure 7, 8, 9, 10, 23, 32, 33, 35

Targets 6, 8, 10, 18, 19, 38

Training 9, 15, 16, 17, 18, 22, 26, 29, 30, 32, 35

Trends 7, 8, 9, 13, 15, 16, 18, 19, 26

Values 2, 3, 6, 7, 9, 13, 15, 34

Vision 2, 3, 6, 7, 9, 13

Workplace personal injury insurance

21

Workers’ Compensation and Rehabilitation Act 2003

3, 10, 13, 15, 25, 26, 29, 30, 36, 37


Index of fi gures

Page number

Figure 1 Financial highlights 1

Figure 2 WorkCover customer service centres in Queensland 3

Figure 3 Claims management 3

Figure 4 Australian average premium rates 4

Figure 5 Our organisation structure and reporting 10

Figure 6 Board of directors 10

Figure 7 Planning cycle 13

Figure 8 Directors’ meetings 13

Figure 9 Number of FOI applications 15

Figure 10 Statutory claim registrations 21

Figure 11 Gender breakdown of claim registrations 21

Figure 12 Age breakdown of claim registrations 21

Figure 13 Statutory claims and payments by customer service centre 21

Figure 14 Statutory claims and payments by industry classifi cation 22

Figure 15 Injured worker and employer satisfaction 23

Figure 16 Statutory claims decisions 25

Figure 17 Common law claimants 25

Figure 18 Non asbestos and asbestos claims settled 25

Figure 19 Statutory and common law payments 25

Figure 20 Complaints about WorkCover lodged with Queensland Ombudsman 26

Figure 21 Statutory claims and payments by injury location 28

Figure 22 Statutory claims and payments by injury nature 28

Figure 23 Durable return to work rate 29

Figure 24 Employees by division 33

Figure 25 Attrition rate 33

Figure 26 Absenteeism 33

Figure 27 Part-time positions 34

Figure 28 Gender of our workforce 34

Figure 29 Gender of our workforce by pay grade 34

Figure 30 Financial results 37

Figure 31 Average premium rate per $100 of wages 37

Figure 32 Gross claims expense 37

Figure 33 Return on investments 38

We at WorkCover Queensland will:

• personally answer our phones when you call us during business hours

• respond to your email or phone message within one business day

• communicate in plain language

• give you the name and direct phone number of a WorkCover person who can assist you

• contact you within two business days of your claim being lodged with us and tell you what will happen next

• contact you when we decide your claim. If you want our reasons for the decision in writing, we will provide this within five business days.

• deposit an EFT payment in your bank account within three business days of accepting your claim for wages compensation as a result of your work related injury

• contact you to discuss major claims that could impact your premium

• pay all authorised invoices by EFT within seven business days

• respond within one business day, if you enquire about working with us

• contact you within two business days, if you complain to us about any aspect of our service.

Thisisourcommitmenttoyouandwewelcomeyourfeedback.

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280 Adelaide St, Brisbane Qld 4000

GPO Box 2459, Brisbane Qld 4001

Telephone 1300 362 128

Facsimile 1300 651 387

www.workcoverqld.com.au

[email protected]

Annual Report 2005–2006

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