The insurance industry’s impossible dream of a workers’ compensation scheme that has one set of rule for the whole country came a tiny bit closer to reality last week when Federal Employment and Workplace Relations Minister Tony Abbott called for the nationalisation of the entire system. Tiny because the chances of it happening are based on the same sort of equation as Hell freezing over.

Mr Abbott’s department has told a parliamentary inquiry that the problems of fraud and non-compliance found in some of the states workers’ compensation schemes are caused by the “inherent complexity of the different systems”. It said this is causing employee fraud and workplace non-compliance.

Mr Abbott has been hot on the subject of a nationalised scheme for some time. But the chances of him wresting such a basic political toy out of the hands of state and territory governments is not likely. Each state and territory has its own workers’ compensation system and/or workplace health and safety scheme and each operates with different legal and administrative rules. 

“The implementation of a single national regulatory framework for coverage under workers’ compensation purposes has the obvious potential to remove the volume of complexity that exists and lessen the potential for fraud and/or non-compliance,” the Employment and Workplace Relations Department submission said.

It estimates that fraud by employees is costing the insurance industry $320 million a year. The figures were taken from an ICA study, which covered only five schemes representing less than 20% of the national market. If Victoria, NSW, Queensland and SA were included and similar problems were noted, the figure “might be significantly higher”.