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Legislative Assembly for the ACT: 1999 Week 13 Hansard (9 December) . . Page.. 4082 ..

MR OSBORNE (continuing):

Some of the most vocal critics of the cost of the scheme demand changes based on their belief that fraudulent claims by employees inflate the cost to the scheme's contributors - the Government and employers.

While employee fraud is often suspected - and suspected very publicly - very few cases have been prosecuted. A comprehensive study was carried out by the Labor Research Association in the United States last year in order to try to nail down the extent of employee workers compensation fraud in that country. While it did find a small level of employee fraud, it identified that the true drain on workers compensation across the whole of the nation was in fact employer and provider fraud.

Some States found that the incidence of employer and provider fraud outnumbered employee fraud by about 3: 1 and that the value of the fraud concerned was about 4: 1. The favourite tactics used by employers to pay small premiums, thus increasing the cost to government and the taxpayer, included under-reporting wages, misclassifying workers as independent contractors even though they were in fact legal employees, and misrepresenting their claims history.

While I appreciate that there is a difference between the two jurisdictions and that the Assembly currently has a committee inquiry under way into certain aspects of workers compensation, I have nonetheless decided to table this legislation today, as I believe this Bill will assist the committee as it progresses through its inquiry.

This Bill establishes criminal offences and provides penalties for deliberate evasion of payment of premiums and/or the understating of wages in order to lessen the payment of premiums. The current divisions relating to insurance and premiums are contained in Part III of the Workers Compensation Act 1951. Section 17B requires an employer to maintain a prescribed insurance policy in force with a group insurer. Failure to comply makes the offender liable to a penalty. Subsection 17(5) allows the nominal insurer to recover as a debt twice the amount which would have been payable.

Section 18 requires that an employer give to an insurer a certificate from a registered auditor and a statutory declaration setting out the categories of workers and a total amount of wages paid in respect of those workers. Failure to comply also makes the offender liable to a penalty. If a person knowingly makes a false statutory declaration, that person has committed an offence under section 11 of the Statutory Declarations Act 1959 of the Commonwealth and is liable to imprisonment for four years. Subsection 4B(2) of the Crimes Act 1914 of the Commonwealth converts this to a possible pecuniary penalty of $24,000. If an auditor makes a false claim in a certificate for the purposes of this Act, they are liable to imprisonment for six months or a fine of $5,000, or both. Under section 345 of the Crimes Act 1990:

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