Long Term Trends in Worker Compensation Claims FINAL · Workers compensation claims and claims incidence rates (the number of claims per thousand workers) vary over time and are apparently

Long Term Trends in Worker Compensation Claims

Prepared by Rod McInnes, Bruce Watson and Rob Thomson

Presented to the Institute of Actuaries of Australia 12th Accident Compensation Seminar

22-24 November 2009 Melbourne

This paper has been prepared for the Institute of Actuaries of Australia’s (Institute) 12th Accident Compensation Seminar The Institute Council wishes it to be understood that opinions put forward herein are not necessarily those of the Institute and

the Council is not responsible for those opinions.

© WorkCover NSW and Finity Consulting Pty Ltd

The Institute will ensure that all reproductions of the paper acknowledge the Author/s as the author/s, and include the above copyright statement:

The Institute of Actuaries of Australia Level 7 Challis House 4 Martin Place

Sydney NSW Australia 2000 Telephone: +61 2 9233 3466 Facsimile: +61 2 9233 3446

Email: [email protected] Website: www.actuaries.asn.au

Abstract Workers compensation claims and claims incidence rates (the number of claims per thousand workers) vary over time and are apparently affected by a number of factors. This paper examines the long term trends in workers compensation claims incidence in the NSW WorkCover scheme over the life of the statutory scheme from its introduction in 1926. It examines and assesses the short and long terms affects of industrial, economic, legislative and environmental impacts on these trends. Key Words: Workers compensation claims incidence, claims incidence trends, industry impacts, economic impacts, legislative impacts

Index

Executive Summary ....................................................................................................................................... i

1. Introduction ................................................................................................................................. 1

1.1 Purpose of this paper....................................................................................................................1

1.2 Scope of the paper........................................................................................................................1

2. The NSW WorkCover Scheme.................................................................................................... 2

2.1 History of the NSW WorkCover Scheme ....................................................................................2

2.2 Legislative Reforms of the 1987 Workers Compensation Scheme..............................................3

2.3 Other Legislation .........................................................................................................................4

3. Data and Data Analysis ............................................................................................................... 5

3.1 Data Sources ................................................................................................................................5

3.2 Approach to Analysis...................................................................................................................5

3.3 Claims History Data.....................................................................................................................6

3.4 Employment Data History ...........................................................................................................7

3.5 Economic Data.............................................................................................................................7

4. Claims Incidence Rates ............................................................................................................... 9

4.1 Scheme Claims Incidence Trends ................................................................................................9

4.2 Claims Incidence by Industry ....................................................................................................11

4.3 Overall Industry Trends .............................................................................................................21

5. Analysis and Results.................................................................................................................. 24

5.1 Impact of Industry Mix ..............................................................................................................24

5.2 Impact of Economic Factors ......................................................................................................26

5.3 Impact of Legislation .................................................................................................................30

5.4 Other Factors..............................................................................................................................35

6. Conclusions ............................................................................................................................... 36

Long Term Trends in Workers Compensation Claims Incidence and their Causes

i

Executive Summary

This summary briefly shows the incidence rates for the NSW workers compensation Scheme (the “Scheme”) and for the high level industry groupings examined and the analysis of the factors that impact incidence rates. The summary is not a substitute for the full report. Scheme Incidence Rates We have examined workers compensation claims incidence rates in NSW from the start of the statutory Scheme in 1926 to date. Incidence rates were calculated as the number of claims per thousand employees exposed under the Scheme. We obtained claims data from the WorkCover claims database for report periods after 1987 and prior to 1987 used statistics published by the State Compensation Board and predecessor organisations and in the NSW Year Book. Data for the 1987/88 did not appear to be complete and as it appears to be a point of discontinuity with the introduction of the Workers Compensation Act 1987; we have not extrapolated this statistic but left it blank. A claim is defined as a claim for compensation relating to a fatality, a permanent incapacity or a temporary incapacity involving 3 days or more compensation. This is consistent with the definition of a claim in the published data. For denominator data we used NSW employment data published by the Australian Bureau of Statistics (ABS) adjusted to exclude those not covered by the Scheme, ie Commonwealth Government employees, the self employed, employers and volunteer workers. Figure A shows the resulting claims incidence rates for the Scheme.

Figure A – Incidence Rate (Scheme Level)

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While the early years of the Scheme were impacted by the Great Depression, incidence rates appear to increase during this period. This perhaps reflects a degree of under-reporting in the initial years of the Scheme. From the end of the 1930s to the early 1980s incidence rates remain relatively stable in the 70 to 90 range, except for the period around the end of the Second World War. There was a substantial spike in incidence rates around the end of the Second World War.


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Since 1981/82 there has been a significant downward trend in incidence rates. Claims rates are now at a low of 20 claims per thousand workers in 2007/08. This represents a fall of 75% from the 1981/82 level of 80 claims per thousand workers and represents a reduction of 84% from the peak of 124 in 1946/47. If injury rates continued to be at 1946/47 rates there would have been 369,000 (three day or more) claims in 2007/08 compared to the actual number of 58,279. Industry Incidence Rates An industry breakdown of claims data was available from 1962/63. The published industry data prior to 1987 was based on aggregations of industry tariff rates used for premium purposes. As far as possible we allocated post-1987 claims to the same groupings. We have classified data into six high level industry groups: • Agriculture

• Manufacturing

• Building and Construction

• Retail and Wholesale Trade

• Transport

• Other Industries (including mining, health, education, financial services, business services, and personal services).

We consider that the definitions are reasonably consistent pre and post 1987, with the likely exception of Building and Construction where it appears there is a significant difference. The resulting incidence rates for each industry grouping and the Scheme 1962/63 to 2007/08 are shown in Figure B.


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Figure B – Incidence Rates by Industry

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Figure B shows that all industry groupings have seen significant reductions from their peaks – generally in the mid-1970s or early 1980s. The trends for all industry groupings are broadly similar. Figure B also highlights the apparent definitional difference for the Building and Construction industry grouping. Impact of Industry Mix Changes There have been significant changes in the mix of industry within the NSW economy over the period since 1962. The biggest changes are the reduction in prominence of Manufacturing (from 34% of exposed employees to 10%), and the growth in the “Other” grouping (from 26% to 60%). To assess the impact of the changes in industry mix we recalculated Scheme rates using the 2007/08 industry breakdown across all years. Figure C shows the results.


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Figure C – Unadjusted and Standardised Incidence Rates

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Scheme UnadjustedStandardised for Industry Mix

The standardised incidence rates show a flatter series and significantly reduced level of the incidence rate peaks. However after standardising for industry mix the incidence rate for the Scheme stills shows a substantial reduction from a peak of 66 in 1981/82 to 20 in 2007/08 – a 70% reduction. Therefore while the change in industry mix may have inflated the level of improvement in claims incidence rates it is not the primary cause of incidence rate improvements over this period. Economic Impacts Periods of economic downturn are shown together with Scheme incidence rates in Figure D below.


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Figure D- Incidence Rates with Periods of Economic Downturn (Scheme Level)

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Statistical analysis of movements in Gross Domestic Product (GDP) and claims incidence rates show a weak positive correlation: that is in recessionary times incidence rates are more likely to fall. It is perhaps more interesting to note that the peaks in claims incidence rates appear to coincide with periods of substantial industrial change. For example, the Great Depression, around the end of the Second World War, the oil crisis in the mid 1970s and the significant industry restructuring about 1981/82. While this theory doesn’t appear to explain all peaks and troughs (eg 1951/52 and 1955/56), based on our analysis we consider it is the extent of industry restructuring, not the movement in economic activity, which has the greater impact on incidence rates. We also conclude that economic impacts, whether movements in GDP or the broader impacts of industry restructuring, appear to generate short term effects (aside from the industry mix changes). Impact of Legislation We considered the impact of a number of legislative changes. We found that only two changes to the legislative framework have any significant long term impact: the Workers Compensation Act 1987 and the Occupational, Health and Safety Act 1983. There appears to be a significant one-off reduction in claim numbers and incidence rates coinciding with the introduction of the Workers Compensation Act 1987. The Act itself did not significantly change the scope of coverage of the Scheme or an injured worker’s rights to access to entitlements. There is not, unlike many of the earlier occurrences of significant reductions, an associated economic event and we consider that the introduction of the 1987 Act and its surrounding publicity led to a change in the propensity to claim compensation. The scale of this impact may be up to 15,000 claims or 10 points in terms of incidence rates. The introduction of the Occupational, Health and Safety Act 1983 coincides with the start of the sustained downward trend in incidence rates from 1981/82 to date. We quantified the impact of previous factors (industry mix changes, economic effects and Workers Compensation Act 1987) and found that they could only account for, at most, half the reduction in incidence rates since 1981/82.


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We note there are other factors that may impact on incidence rate, including the aging of the workforce, availability of alternative support and assistance and changes in the propensity to claim. We consider however that these factors are unlikely to have had a significant contribution to incidence rate reductions over this period. We conclude that the bulk of remaining reduction in incidence rates is likely to be a product of improvements in workplace health and safety (broadly defined) and that NSW workplaces are safer now than they have ever been. This outcome has been achieved by Industry (Employers and Workers) and Government actively working to improve health and safety in the workplace within the policy framework created by the Occupational Health and Safety Act 1983. Acknowledgements

The authors thank Sriyani Dias and Maria Iozano from WorkCover NSW for their assistance in extracting claims data, unearthing historical Statistical Bulletins and other advice and assistance and John Jeaitani from Finity Consulting who trawled NSW Year Books and ABS websites for valuable data and completed the bulk of the analysis. Without them this paper would not have been possible.


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1. Introduction

1.1 Purpose of this paper

The purpose of this paper is to: • Analyse long term trends in workers compensation claims and claims incidence rates in New

South Wales

• Provide a long term picture of the underlying trends over the life of the Scheme since its inception in 1926.

• Assess and quantify the causal factors that have led to these long term outcomes, as well as assessing the impact of short term factors, such as economic environment, on the data.

This paper will return to the public domain some historical statistics on the NSW WorkCover Scheme, compile for the first time incidence rate trends over the life of the Scheme and provide analysis of the causes of these trends. This analysis should prove topical in the light of the recent global financial crisis. 1.2 Scope of the paper

This paper sets out the long term trends in workers compensation claims incidence at a Scheme level and by high level industry groups. It also seeks to analyse and discuss possible factors that may have caused these trends. We have not examined other claims metrics such as duration or return to work outcomes. This limitation is largely a reflection of data limitations – we were not able to derive comparable measures pre and post 1987. The paper relies on available data and information, and particularly for the periods prior to 1987, this has been limited to published data and information. We have accepted the published data as an accurate record of the stated statistics and have not sought to independently verify this historical data. Where definitional differences are evident from the relevant publications we have adjusted or allowed for these difference in our analysis. We were not able to verify that data definitions, scope of data and collection methodologies are entirely consistent for the 80 plus years under review – they are however as consistent as we could make them.


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2. The NSW WorkCover Scheme

2.1 History of the NSW WorkCover Scheme

This section contains a summary of the history of the NSW WorkCover Scheme and its predecessors. It is not intended to be comprehensive or exhaustive. A comprehensive statutory workers compensation Scheme in NSW commenced with the commencement of the Workers Compensation Act 1926. This legislation established a Scheme that provided statutory no-fault benefits to injured workers in NSW. The Scheme was supported by a requirement for all employers to compulsorily insure under the Act. This insurance was provided by private insurers licensed to do so. This Act remained essentially unchanged until the mid 1980s. Prior to the introduction of the Workers Compensation Act 1926, injured workers could, in general, only pursue compensation through common law (although a small number of occupation/exposure specific statutory schemes existed prior to 1926). Following the introduction of the statutory Scheme access to unfettered common law continued. In practice under the Court’s interpretation of the common law at the time, few claims succeeded (largely on the principle of the acceptance of the risk by the worker) and insurance against common law liabilities was voluntary (and initially when it was made compulsory the amount of cover required was capped). The limited access to compensation through the common law and the (community) expectation that injured workers should have access to compensation was the prime rationale for the introduction of the statutory Scheme. During the early to mid 1980s costs under the Scheme began to escalate, fuelled in part by increasing common law payouts, a lump sum focus and an increasingly litigious nature of claims under the Scheme (and the community generally). This led to insurers increasing premium rates. In 1985 the Government introduced new premium regulations that introduced an experienced based premium formula for employers but also capped the premium that could be charged by insurers. As the premiums set by the Government were not, in the insurers’ view adequate, this led to insurers exiting the market and ultimately in late 1986 collapse with all players leaving the market. The Government stepped in and agreed to underwrite the Scheme from 31 December 1986. By this time premiums had reached 3.8% of wages (on average). The Government then set about developing legislation to give effect to their agreement to underwrite workers compensation and to reform the existing Scheme establishing an affordable and sustainable Scheme for the future. Out of this came the Workers Compensation Act 1987. The key changes from the 1926 Act were: • Abolition of all common law rights

• Abolition of the right to redeem or commute entitlements

• Substantially reducing the role of the Compensation Court and the introduction of a non-judicial conciliation system for disputes

• Introduction of licensed insurers as agents for the new Government Scheme

The 1987 Scheme was immediately successful. Claim numbers and apparently claim duration and costs reduced substantially. Initially there was scepticism about these results – was it an


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aberration in the data or some form of “honeymoon” period. However costs for the early years of the 1987 Scheme were estimated at below 1.5% of wages, although there was some subsequent escalation of these costs following a series of later reforms (see below). 2.2 Legislative Reforms of the 1987 Workers Compensation Scheme

This section summarises the changes to the workers compensation legislation since 1987. In summarising the changes we have focused on highlighting the changes that may have directly or indirectly impacted upon the entitlement or propensity to claim for compensation. In practice there have been 31 legislative amendments to this legislation in the 22 years since it commenced. Following a change of Government in 1988, the new Government commissioned a review of the new workers compensation Scheme. Following this review the Government passed a range of amendments to the Scheme most of which came into effect in February 1990, many of which partially overturned the 1987 reforms, including: • Reinstatement of modified common law rights (including retrospectively)

• Providing restricted rights to commute entitlements

• Reinstating the Compensation Court as the principal forum for resolving disputes and placing the conciliation process under the authority of the Court

• Restricting access to journey claims (excluding those where the worker was at fault)

These amendments led to an increasing trend in Scheme costs which continued through the first half of the 1990s. By 1995 the Scheme was under significant cost pressure. The Government put through amendments in 1995 and 1996 (in part) designed to address the emerging cost concerns, including: • Introduction of a 6% threshold for deafness claims (commencing 10 November 1995)

• Removing entitlement to compensation for psychological claims arising out of reasonable actions of the employer

• Introducing provisions restricting touting and advertising for claimants/claims

• Removing the fault restriction on access to journey claims

These amendments had an impact in the areas targeted, but did little to stem the broader trend of increasing claims costs. This trend again appeared to be fuelled by an increasing focus on lump sum compensation (common law and commutations) and increasing levels of litigation. Following a tripartite review in 1997 – 1998 the Government put forward legislation to return the Scheme to private underwriting effective from 1 October 1999. This legislation also included provisions designed to reduce costs: mostly establishing streamlined processes around conciliation and medical disputes. These changes delivered some savings but Scheme costs remained above premium levels. The move to private underwriting was deferred until 1 October 2000 and then repealed in 2000. This was done largely because of Government and employer concerns that premiums under the privately underwritten system would substantially exceed those currently charged under the existing Scheme.


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In June 2000 the then Minister announced in a statement to Parliament the Government’s intended principles for reforming the WorkCover Scheme. Twelve months later a major reform package was passed by Parliament. This legislation included: • Abolition of the Compensation Court and the introduction of a non-judicial arbitration system

for disputes (the Workers Compensation Commission)

• Introduction of impairment guidelines and binding medical panels for determining medical disputes

• Significant limitations on access to commutations and tight thresholds for access to common law

• Introduction of provisional liability requiring, in general, claims to be paid on a provisional basis pending formal determination of liability.

From 30 June 2008, employers whose annual wages are $7,500 or less are not required to hold a workers compensation insurance policy, except where an employer engages an apprentice or trainee or is a member of a group of companies for workers compensation purposes. 2.3 Other Legislation

The Occupational Health and Safety Act 1983 introduced a specific legal obligation on employers to, as far as practical, establish and maintain a safe workplace. Penalties apply for breaches of this obligation. A raft of regulations and codes of practice were developed under the principal act. In 2000 the 1983 Act was replaced with the Occupational Health and Safety Act 2000. The main change in the 2000 Act was a move away from prescriptive style regulation to more holistic, systems based approach. Since its introduction in 1983 the occupational health and safety legislation has been amended a number of times to increase the obligations on employers: • Increasing the amount of regulation and codes of practice that employers are to comply with

• Moving to an absolute obligation to provide a safe workplace (with some defences)

• Increasing the penalties for breaches, currently:

• $550,000 for corporations who are first offenders, $825,000 for previous offenders and $1.65 million for fatalities

• Introducing imprisonment for repeat offenders.


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3. Data and Data Analysis

3.1 Data Sources

This paper is based on analysis of a number of types of data and data sources: • Claims data

• Exposure (employment) data

• Economic data

• Reference Material (classifications and other information used for reconciliation purposes).

For a detailed explanation of each data source, refer to Appendix A.

3.2 Approach to Analysis

This paper aims to compile a single consistent series of claims data over the life of the workers compensation Scheme in NSW from 1926 to date. For this purpose we have used a definition of claim as being a claim which involves a fatality, permanent incapacity or temporary incapacity of three days or more. This is consistent with the definition used in published data prior to 1987. It is noted that this definition is not consistent with the standard definition specified in the National Data Set (which uses a one week threshold for temporary incapacity claims) which is generally used in current workers compensation statistical publications. Where possible we have broken the Scheme claims data into industry groups. For this purpose we have used the industry groupings used in the Workers Compensation Statistics publications issued prior to 1987 and extracted or converted post 1987 data to this classification system. We have classified data into six high level industry groups: • Agriculture

• Manufacturing



• Transport

• Other Industries (including mining, health, education, financial services, business services, and personal services).

We have extracted exposure (employment) data from published ABS data. We have adjusted the total employment data, as far as practical, to exclude those not covered by the NSW workers compensation Scheme, that is those that are Commonwealth Government employees, self employed and individuals that are employers. The definition of “employment” used in published data appears to vary over the period being examined and published data regularly revised in subsequent publications, over the period from 1926 to 1970. The level of information available made it difficult to reconcile the different data series. For this period we have primarily relied on census data where available (usually every


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five years) and interpolated using survey based employment data series between these periods. Exposure data has also been broken down into the above industry groupings using a similar methodology to that used for allocating post 1987 claims. An incidence rate is calculated for the Scheme and each industry group for each year (where data is available), where the incidence rate is the number of claims per 1,000 employees. The resulting trends were examined for correlation with: • Changes in industry mix – changes in the proportions of high and low risk industries within

the economy

• Economic trends – movements in gross domestic product (GDP)

• Legislative changes – amendments that have, or may have, impacted upon the right or propensity to claim

• Other factors that (may) impact upon claims incidence – including the impact of technology and improvements in safety

The results were then verified against available published data. 3.3 Claims History Data

Analysis was based on examining the number of new compensation cases reported over 1926/27 to 2008/09 under the NSW workers compensation Scheme. This included all claims under the Scheme including those relating to self insurers and the NSW Government. The data published for 1926/27 to 1986/87 excluded cases of less than three days incapacity. It included cases involving a fatality, permanent total disability, permanent partial disability and temporary disability claims that were greater than or equal to three days incapacity. From 1987, together with the introduction of the 1987 Act, a new electronic data collection methodology was introduced (previously data was collected on hardcopy forms). Because 1987/88 was a transition year between the two collection methodologies it appears that the electronic 1987/88 data is not complete. Specifically it appears a number of self insurers did not provide data electronically for this period. As the introduction of the 1987 Act already creates a break in the series, we have not extrapolated a 1987/88 data point but left this blank to emphasise the break in the series. From 1988/89 onwards, we are satisfied the data provided is complete and includes records for all new compensation claims reported. This data was filtered to exclude temporary incapacity claims of less than three days to match the same claim definition for the published data from 1926/27 to 1986/87. The data published for 1962/63 to 1986/87 was also split by industry. The classification used for compiling the industry data was the tariff rate groupings used for assessing workers compensation premiums. The exact groupings used for this purpose are not known. From 1988/89 onwards each claim was assigned an ABS standard industry classification code, initially an Australian Standard Industry Classification (ASIC) code and then an Australian and New Zealand Standard Industry Classification (ANSZIC) code. Tariff rates continued to be used


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until 2000, however the tariff groups were substantially changed under the 1987 Act and self insurers did not supply tariff rates so this data was not complete. To create consistent industry grouping with that published pre 1987 we aggregated ASIC/ANZSIC codes into the six industry groups. We were able to use cross tabulations of ASIC by tariff rates to assist in the allocation of each ASIC to the appropriate industry group. While we consider the results reasonable, some definitional differences in the industry groupings pre and post 1987 may exist and in the case of Building and Construction definitional differences appear likely. Care should therefore be taken in interpreting absolute movement in claim numbers and incidence rates at an industry level over the 1987 point particularly for Building and Construction. We reconciled our claims numbers with those published by WorkCover and with those available from actuarial reports by WorkCover’s actuaries PricewaterhouseCoopers. After allowing for the definitional differences we were satisfied the remaining differences could be explained by differences in the date of the extracts and the extent of development in the data. 3.4 Employment Data History

As a measure of exposure, this analysis uses NSW employment numbers adjusted, where appropriate, for those who are not in the Scheme – Commonwealth Government employees, self-employed, employers and unpaid helpers. Full details of the calculations are included in Appendix C. The NSW employee data was obtained from the censuses taken at 1933, 1954, 1961 and 1966 – this included wage and salary earners and excluded self-employed, employers and unpaid helpers. The data points in between census dates were interpolated based on the time series of NSW wage and salary earners (excluding Agriculture, Defence Forces and Private Domestic Services). Prior to 1933, employment data was extrapolated from the 1933 census back to 1926/27 using the time series of employment data for the Rural, Mining and Manufacturing industries (these industries accounted for about half the workforce). The numbers of Commonwealth Government employees was deducted from these employee numbers to obtain exposed employees. A similar process was undertaken for obtaining the number of exposed employees for the six industry groups. This was done by aggregating published ASIC/ANZSIC-based industry data into the six high level groups. We have assumed that all the NSW based Commonwealth Government employees are in the “Other” industry grouping. While no data was available showing Commonwealth Government employees by industry, given the nature of Commonwealth Government activities, this appears a reasonable assumption. We reconciled our NSW exposed employees numbers for the most recent years with WorkCover exposure data. The results showed differences of less than 3% which we consider acceptable. 3.5 Economic Data

To analyse economic trends and their influence upon claims incidence rates, we have relied on Australian Gross Domestic Product (GDP). This was available from 1959/60 and split by industry from 1974/75. NSW State final demand (an equivalent measure of GDP for NSW) was available from 1985/86 but as the series was similar we considered it more appropriate to use the longer Australian series.


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The seasonally adjusted series was used, as the trend series tended to dampen the quarterly movements and the original series was overly variable. The seasonally adjusted series is the headline figure reported by the ABS. The GDP quarterly data was averaged over the financial year to give an annualised GDP for the year. The percentage change in this annualised figure was then compared to the percentage change in the annual incidence rate. This was done at a Scheme and industry level.


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4. Claims Incidence Rates

In this section we present the claim numbers, employment data and the calculated incidence rates for the Scheme and each of the six industry groups. We have presented the results in graphical form. The actual results are shown in Appendix B. 4.1 Scheme Claims Incidence Trends

Claim numbers under the 1926 and 1987 Workers Compensation Acts by financial year of report are set out in Figure 4.1 below. For this purpose claims have been defined as claims relating to a fatality or a permanent disability or a temporary disability involving 3 days or more off work. Figure 4.1 shows the numbers of claims have generally fallen since 1981/82, after showing an upward trend from the introduction of the Scheme in 1926 to the peak in 1981/82. Note that the figure for 1987/88 is missing as a complete statistic was not available for this year.

Figure 4.1 - Total New Claims Reported (Scheme level)

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Total NSW employment and the numbers of employees covered under the workers compensation Scheme (“exposed employees”) are shown in Figure 4.2. This shows a steady growth in employment, with a few exceptions, over the life of the Scheme.


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Figure 4.2 – NSW Employment

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The incidence rate of workers compensation claims is shown in Figure 4.3 below.

Figure 4.3 - Incidence Rates (Scheme Level)

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Workers compensation claims incidence rates have shown a clear upward trend from the inception of the Scheme in 1926 to a peak in 1946/47, which appears to be an isolated peak. From the late 1930s to the early 1980s incidence rates were relatively flat (aside from the peak around 1946/47) and in the 70 to 90 range, although there have been a number of peaks and troughs over this timeframe. Since the peak in 1982/83 incidence rates have trended downwards over the past 25 years.


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At their peak incidence rates reached 124 claims per thousand workers. The 2007/08 rate of 20 is the lowest on record and represents a reduction of 84% from the peak. If injury rates continued to be at 1946/47 rates there would have been 369,000 three day or more) claims in 2007/08 compared to the actual number of 58,279. 4.2 Claims Incidence by Industry

We have analysed the data by six high level industry groups: • Agriculture

• Manufacturing



• Transport

• Other industries (all industry groups other than the five above including mining, health, education, financial services, business services, and personal services).

Claims data by industry was only available for the period from 1962/63 to 2007/08. The results by industry therefore are only available for this period. In this section we provide the same three graphs showing claims reported, total employment and exposed employees and incidence rates for each industry as at a Scheme level (in section 3.1) over the shorter timeframe. The incidence rate graph includes the industry and Scheme rate for comparison. It is also worth noting that if the Scheme results were recast over this shorter time it would show a peak in 1973/74 of 86 claims per thousand employees. The current rate of 20 claims per thousand represents a 77% reduction from this peak.


12

4.2.1 Agriculture

Figure 4.4 – New Claims Reported (Agriculture)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

Rep

orte

d

Figure 4.5 - NSW Employees (Agriculture)

0

20

40

60

80

100

120

140

160

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

No.

of E

mpl

oyee

s ('0

00s)

Total Employment Exposed Employees


13

Figure 4.6 - Incidence Rates (Agriculture)

0

20

40

60

80

100

120

140

160

180

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Agriculture Claims incidence for Agriculture peaks in 1973/74 and has generally trended downwards since then. The current incidence rate of 31 is an 80% reduction from the 1973/74 maximum of 155. This trend is similar to that of the Scheme as a whole.

4.2.2 Manufacturing

Figure 4.7 - New Claims Reported (Manufacturing)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

Rep

orte

d


14

Figure 4.8 – NSW Employees (Manufacturing)

0

100

200

300

400

500

600

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

No

of E

mpl

oyee

s ('0

00s)


Figure 4.9 – Incidence Rates (Manufacturing)

0

20

40

60

80

100

120

140

160

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Manufacturing

The incidence of claims for the Manufacturing industry reached a peak in 1980/81 and has trended down since then. Incidence rates peaked at 147 and the current rate of 33, the lowest on record to date, represents a reduction of 78% from the peak. This trend is similar to that of the Scheme as a whole.


15

4.2.3 Building and Construction

Figure 4.10 – New Claims Reported (Building and Construction)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

Rep

orte

d

Figure 4.11 – NSW Employees (Building and Construction)

0

50

100

150

200

250

300

350

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

No

of E

mpl

oyee

s ('0

00s)



16

Figure 4.12 – Incidence Rates (Building and Construction)

0

50

100

150

200

250

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Building and Construction

Within the Building and Construction industry claims incidence peaked in 1973/74 at 209 with a further, but lower, peak in 1980/81. Since 1980/81 incidence rates have generally fallen. The rate 2007/08 of 27 (the lowest to date) represents a reduction of 87% from the peak. Again this trend is similar to that for the Scheme as a whole, although the extent of the reduction from the peak is more pronounced and appears to have the greatest improvement of the six industry groupings examined. There was a substantial reduction in claim numbers and incidence rates associated with the commencement of the 1987 Act. This is likely to be exaggerated by the apparent definitional differences in the scope of the “Building and Construction” industry pre and post 1987. Care should be taken in relying on the magnitude of this change over 1987.


17

4.2.4 Retail and Wholesale Trade

Figure 4.13 - New Claims Reported (Retail and Wholesale Trade)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

Rep

orte

d

Figure 4.14 – NSW Employees (Retail and Wholesale Trade)

0

100

200

300

400

500

600

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

No

of E

mpl

oyee

s ('0

00s)



18

Figure 4.15 – Incidence Rates (Retail and Wholesale Trade)

0

10

20

30

40

50

60

70

80

90

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Wholesale and Retail Trade

Incidence rates for Retail and Wholesale Trade peaked in 1985/86 at 40 after reaching a similar peak in 1980/81. Rates have reduced since 1985/86 to the current level of 19 – a 53% reduction from the peak. The extent of improvement for Retail and Wholesale Trade is substantially less than for the Scheme as a whole.

4.2.5 Transport

Figure 4.16 – New Claims Reported (Transport)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

Rep

orte

d


19

Figure 4.17 – NSW Employees (Transport)

0

50

100

150

200

250

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

No

of E

mpl

oyee

s ('0

00s)


Figure 4.18 – Incidence Rates (Transport)

0

10

20

30

40

50

60

70

80

90

100

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Transport and Storage

Claims incidence rates for the Transport industry have fallen over the entire period industry data is available. Incidence peaked in 1962/63 at 93 and trended downward to the current level of 23 in 2007/08 – this represents a reduction of 75%. Incident rate trends for the Transport industry follow, relative closely, the Scheme as a whole.


20

4.2.6 Other Industries

Figure 4.19 – New Claims Reported (Other Industries)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

Rep

orte

d

Figure 4.20 – NSW Employees (Other Industries)

0

500

1,000

1,500

2,000

2,500

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

No

of E

mpl

oyee

s ('0

00s)



21

Figure 4.21 – Incidence Rates (Other Industries)

0

10

20

30

40

50

60

70

80

90

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Other Claims incidence rates for Other industries (including all industries other than those above) peaked in 1981/82 at 43 claims per thousand workers. Since this peak rates have trended down to the current level of 16 – a 62% reduction from the peak. The level of improvement for this category is less than that for the Scheme as a whole. It should be noted that this group contains a wide variety of industries and is not a homogeneous group and in practice the nature of the group has changed markedly over the period under review. This is discussed further in the following section. 4.3 Overall Industry Trends

Figure 4.22 below shows the incidence rate trends for all industries.


22

Figure 4.22 – Incidence Rates (All Industries)

0

50

100

150

200

250

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme Agriculture Building and ConstructionManufacturing Transport and Storage Wholesale and Retail TradeOther

Figure 4.23 shows the incident rate relativities for each industry compared to the Scheme in total (note that the Scheme is 100%).

Figure 4.23 - Incidence Rate Relativities (All Industries)

0%

50%

100%

150%

200%

250%

300%

350%

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Rel

ativ

e to

Sch

eme

Agriculture Building and Construction ManufacturingTransport and Storage Wholesale and Retail Trade OtherScheme


23

The Figures above clearly highlight Building and Construction, Agriculture and Manufacturing as the high risk industries and Wholesale and Retail and Other being lower risk industry groups. It is interesting that the level of improvement from the peak is relative to the size of that peak – Construction has the highest peak rate (note that the extent of this reduction may be inflated by the definitional differences) and the greatest improvement, Agriculture the second highest and the second largest improvement etc. This is perhaps a reflection of the practical reality that higher risk industries have greater scope for improvement. Figure 4.22 appears to suggest that the relative differences between industries have reduced markedly over the period. However when the actual relativities to the Scheme are considered in Figure 4.23 it becomes apparent the extent of this reduction is relatively small. The only industry groupings with a clear consistent trend are Wholesale and Retail and Other who have increased from around 50% of Scheme average to around 100% and 80% respectively. For the Other industry grouping this is in part because for the more recent years “Other” represents 60% of the Scheme. We have looked at the same analysis using a standardised industry mix and recalculating the results. The results of this analysis is very similar to that done on an unadjusted basis. There is no clear trend for the remaining industry groups (even though Building and Construction reduced substantially over 1987 – this is more likely a definitional issue rather than a reflection of an underlying trend).


24

5. Analysis and Results

The observed reductions in claims incidence rates for the Scheme and for each industry could be a product of a range of factors: • Changes in industry mix

• Economic trends

• Legislative changes

• Other factors that (may) impact on claims incidence – these could include the impact of technology, improvements in safety, changes in community attitudes and the aging of the workforce.

We examine each of these in turn. 5.1 Impact of Industry Mix

The nature and mix of the industries that make up the NSW economy has changed significantly over the 50 year period from 1962/63 to date. Is it possible that the change in industry mix – the reduced importance of manufacturing and the increase of service industries – has contributed to the apparent level of improvement in Scheme claim incidence rates?

5.1.1 Change in Industry Mix Firstly, let us consider the extent of change in the mix of employment by industry over the last five decades. Figure 5.1 shows the proportion of total employment by each of our industry groups for each of the past five decades.

Figure 5.1 – Employment Mix

0%10%20%30%40%50%60%70%80%90%

100%

1962

/63

1974

/75

1986

/87

1996

/97

2007

/08

Em

ploy

ees

Exp

osed

Agriculture Building and Construction ManufacturingTransport and Storage Wholesale and Retail Trade Other

It is evident from Figure 5.1 that there has been a major transformation in NSW industry over the 45 year period from 1962/63 to 2007/08. The prominence of Manufacturing has reduced dramatically from 34% of the total exposed employees to 10% in 2007/08. The “Other” industry


25

group has been the major growth area increasing from 26% to 60% of the exposed employees during the same period. This increase largely relates to the growth in the financial and services industries. The impacts on the remaining industries have been less dramatic with Agriculture reducing from 4% to 2%; Building and Construction remaining relatively stable in the 6% to 8% range; Transport stable at 6%, and; Retail and Wholesale reducing from 21% to 17%. As Manufacturing is a relatively high risk industry and the Other group is, at least overall, relatively low risk, this raises the question whether, and to what extent, the change in industry mix has contributed to the apparent rate of improvement in incidence rates at a Scheme level. Clearly it does not account for all of the improvement as each of the industry groups showed substantial improvement when considered separately. In the next section we analyse claims incidence rates using standardised industry weightings to neutralise the impact of changes in industry mix.

5.1.2 Standardised Incidence for Industry Mix To standardise for changes in industry mix we have recalculated the Scheme incidence rate using the 2007/08 industry employment mix data to weight the historical industry incidence rates. Figure 5.2 below shows the results of this standardisation with the raw Scheme incidence rate and the adjusted Scheme incidence rate using 2007/08 employment by industry as the basis for standardisation.


26

Figure 5.2 – Incidence Rates (Standardised for Industry Mix)

0

10

20

30

40

50

60

70

80

90

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Scheme UnadjustedStandardised for Industry Mix

After standardising for industry mix the incidence rate for the Scheme still shows a substantial reduction from a peak of 66 in 1981/82 to 20 in 2007/08 or a 70% reduction. Therefore while the change in industry mix may have inflated the level of improvement in claims incidence rates it is not the primary cause of incidence rate improvements over this period. It is also interesting to note that the standardisation changes the year that has the highest incidence rate from 1974/75 to 1981/82. This analysis however takes no account of mix changes within an industry, for example the extent to which higher risk labour intensive manufacturing has moved off shore leaving lower risk technology based manufacturing in Australia. The level of data available has not allowed us to examine this question. We note that, from a practical point of view, it is not feasible for some industries to move off shore, for example Building and Construction, Transport and Retail and Wholesale. And, again all industries have shown substantial reductions in incidence rates. 5.2 Impact of Economic Factors

Figure 5.3overlays Scheme incidence rates with the periods of negative economic growth, based on movements in Australian GDP. The periods may include some quarters of positive growth, where a series of negative growth quarters is broken by one quarter of positive growth we have highlighted the entire period. As a result the periods highlighted do not necessarily exactly correspond with periods of technical recession.


27

Figure 5.3 - Incidence Rates with Periods of Economic Downturn (Scheme Level)

0

20

40

60

80

100

120

140

1926

/27

1930

/31

1934

/35

1938

/39

1942

/43

1946

/47

1950

/51

1954

/55

1958

/59

1962

/63

1966

/67

1970

/71

1974

/75

1978

/79

1982

/83

1986

/87

1990

/91

1994

/95

1998

/99

2002

/03

2006

/07

Cla

ims

per 1

000

wor

kers

Considering Figure 5.3 it is interesting to note that the peaks in claims incidence rates appear to coincide with periods of significant economic change. While these periods correspond to periods of recession, they are also periods of substantial industrial change. For example: • 1928/29 to 1930/31 – the Great Depression (although claims numbers over this period may

also be effected by the relative newness of the Scheme and perhaps a degree of under-reporting of claims)

• 1943/44 to 1946/47 – the end of the Second World War, the build-up of war industries, women in the workforce and the associated reconfiguring of the workforce after the end of the war

• 1974/75 – the oil crisis and associated industry restructuring

• 1981/82 - industry restructuring, including a substantial reduction in manufacturing jobs.

This theory doesn’t appear to explain all peaks as the peak in 1955/56 does not have an associated economic change, although this did coincide with a period of significant growth. We can find no explanation for the peak in 1955/56, or the trough in 1951/52, in the economic data nor do we have any alternative explanation for the movements in incidence rates through this period. Other periods of economic downturn, which are, perhaps less severe and not associated with a substantial industrial change appear to have had a lesser impact on incidence rate trends. For example the recessionary periods in the 1960s and in 1991/92 do not appear to coincide with the same type of incidence rate peaks, although they do tend to coincide with a decrease in the incidence rates. We have made a number of statistical tests to attempt to confirm or otherwise they above hypothesis. We have tested two questions:


28

1) Is the nature of movements in incidence rates different between recession and growth

periods (Table 5.1 and Table 5.2) 2) If 1) is established, then does a deep recession have a larger (downward) impact on

incidence rates than a shallow one? (Table 5.3) We have categorised each year into a recession year (where there was negative economic growth during the year) or a growth year (where there was positive economic growth during the year). We used a t-test to assess whether the average incident rate movement in recession periods is significantly different to that in growth periods. The results are shown in Table 5.1 below.

Table 5.1 - Average % Change in Incidence Rates - t test

Group Recessions GrowthSignificant

Diffference?Agriculture -3.3% -1.6% NoBuilding and Construction -2.5% -2.0% NoManufacturing -3.8% -0.3% YesTransport -5.1% 0.1% YesWholsale and Retail Trade -2.5% 0.4% YesOther -3.0% -1.1% NoScheme (post 1962/63) -4.9% -1.3% YesScheme -5.3% 1.6% Yes

Table 5.1 indicates that at a Scheme level and for a number of industry groupings (Manufacturing, Transport and Wholesale and Retail Trade) there is a statistically significant difference in the average incidence rate movement in recessionary times compared to growth periods. We also analysed the proportion of negative movements in recessionary times compared to growth periods. This assesses whether there is a significant difference in the direction of incidence rate movements in recession and growth years. The results are shown in Table 5.2.

Table 5.2 - Proportion of negative movements in Incidence Rates - Sign Test

Group Recessions GrowthSignificant

Diffference?Agriculture 80.0% 58.8% YesBuilding and Construction 70.0% 70.6% NoManufacturing 70.0% 52.9% YesTransport 70.0% 64.7% NoWholsale and Retail Trade 80.0% 47.1% YesOther 80.0% 58.8% YesScheme (post 1962/63) 80.0% 65.7% NoScheme 77.8% 51.6% Yes

These results indicate that for the Scheme since 1926 (but not for the period post 1962/63) and for a number of industry groupings (Agriculture, Manufacturing, Wholesale and Retail Trade and Other) there was a significant difference, albeit at a low level of significance, in the proportion of negative movements in incidence rates between recession and growth periods.


29

We also measured the correlation between annual movements in incidence rates and the annual movements in GDP using a Pearson Correlation at the Scheme level. This calculation was done for both the unadjusted Scheme incidence rates and the standardised Scheme incidence rates. For each industry group we have measured the correlation between annual movements in GDP and also the movements in industry activity (annual production by the industry sector). We also measured the correlation between industry activity for each industry group and movements in GDP. The results are shown in Table 5.3 below. For the industry groups correlations were calculated from 1962/63 to date. At the Scheme level correlations were calculated for the full period from 1926/27 to date and also for the period from 1962/63 to date. Correlations were also calculated with a one year lag in incidence rate movements.

Table 5.3 - Correlations of Incidence Rates (in Recessions)1

Group National GDP LagIndustry Activity Lag

Industry vs. GDP

Agriculture 33% 78% -4% 54% 36%Building and Construction 40% 9% -2% 6% 73%Manufacturing 71% 74% 80% 62% 77%Transport 3% 7% 54% 77% 35%Wholsale and Retail Trade 25% 50% -2% 72% 79%Other 26% 7% 31% 44% 64%Scheme (post 1962/63) 57% 52% n/a n/a n/aScheme 54% 56% n/a n/a n/a1 Pearson's Correlation is a measure of dependence between -100% and 100%

Firstly it is clear industry activity is generally highly positively correlated with movements in GDP – i.e. industry activity tends to increase with growth in GDP and reduce with negative GDP growth. This is particularly the case for the Building and Construction, Manufacturing and Wholesale and Retail Trade industry groups. The correlations for Agriculture and Transport are significantly weaker. These results are as you would, perhaps, expect. There is a relatively weak positive correlation between GDP movements and Scheme incidence rate movements. The correlation between GDP movements and incidence rate movements at the industry level are generally weaker than at the Scheme level. There is effectively no correlation between industry activity and incidence rate movements at the industry level except for the Manufacturing and Wholesale and Retail Trade industry groups. There is no apparent correlation when the incidence rates are lagged by a year. As over the long term GDP has trended upwards and incidence rates have trended downwards is it perhaps not surprising that there is not a strong correlation between the two series. The above analysis suggests that while there is a weak correlation between economic activity and incidence rate movements, it is the extent of industry restructuring, not the movement in economic activity, which has the greater impact on incidence rates. In any case economic


30

impacts, whether movements in GDP or the broader impacts of industry restructuring, appear to generate short term effects (aside from the industry mix changes discussed in Section 5.1). 5.3 Impact of Legislation

There have been a number of relevant legislative changes that have, or may have, impacted on claims incidence rates. A summary of legislative changes is included in section 1.4 and 1.5 of this paper. We consider the following legislative changes to be most relevant and discuss the impact of each on claims incidence rates: • Journey claims amendments in 1990 and 1996

• Deafness changes in 1995

• Provisional liability changes in 2001

• Workers Compensation Act 1987 (the 1987 Act)

• Occupational Health and Safety Act 1983

Please note this is not intended as a comprehensive examination of all legislative changes. Figure 5.4 shows the claims incidence rates for the Scheme highlighting each of the above legislative changes.

Figure 5.4 - Incidence Rates (Legislative Changes)

0

10

20

30

40

50

60

70

80

90

1962

/63

1964

/65

1966

/67

1968

/69

1970

/71

1972

/73

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Cla

ims

per 1

000

wor

kers

Workers Compensation Act 1987

Journey Claim Amendments

Deafness changes

Provisional Liability Changes

Occupationatl Health and Safety Act 1983

Each of these changes and their impact on claim numbers and incidence is examined individually below. We examine the less significant first.


31

5.3.1 Journey and Deafness Claims Figure 5.5 shows the percentage of journey claims as a proportion of total claims around the period of the introduction of the journey claim restrictions in 1990 and the removal of those restrictions in 1996. It is evident that the proportion of journey claims reduced to about half historical levels with the introduction of the restriction and return to around their former levels over a period of years following its removal.

Figure 5.5 - Journey Claims as % of Total (Scheme Level)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1981

/82

1982

/83

1983

/84

1984

/85

1985

/86

1986

/87

1987

/88

1988

/89

1989

/90

1990

/91

1991

/92

1992

/93

1993

/94

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

% o

f Tot

al C

laim

s

Figure 5.6 shows the percentage of deafness as a proportion of total claims around the period of the introduction of the deafness threshold in 1995. Deafness claims were increasing in the period leading up to the introduction of threshold and reduced to around their former levels following its introduction.


32

Figure 5.6 - Deafness Claims as % of Total (Scheme Level)

0%

2%

4%

6%

8%

10%

12%

14%

1981

/82

1982

/83

1983

/84

1984

/85

1985

/86

1986

/87

1987

/88

1988

/89

1989

/90

1990

/91

1991

/92

1992

/93

1993

/94

1994

/95

1995

/96

1996

/97

1997

/98

1998

/99

1999

/00

2000

/01

2001

/02

% o

f Tot

al C

laim

s

The combined impact of these series of changes served to largely offset each other such that these legislative changes appear to have had a small short term impact on incidence rates. This can be seen from Figure 5.7 which shows claims incidence rates including and excluding journey and deafness claims. Clearly the underlying trends for the two series are similar and the proportion of journey and deafness claims from 1975/76 to 2007/08 has generally been in the 13% to 16% range.

Figure 5.7– Incidence Rates excl. Journey and Deafness

0

10

20

30

40

50

60

70

80

90

1971

/72

1973

/74

1975

/76

1977

/78

1979

/80

1981

/82

1983

/84

1985

/86

1987

/88

1989

/90

1991

/92

1993

/94

1995

/96

1997

/98

1999

/00

2001

/02

2003

/04

2005

/06

2007

/08

Cla

ims

per 1

000

wor

kers

Incidence Rate Incidence excl Journey and Deafness


33

5.3.2 Provisional Liability When the provisional liability arrangements were introduced in 2001, there was a concern from some sectors of industry that the arrangements, because of a more streamlined access to benefits, would lead to an increase in claim numbers. In practice the data shows no evidence that provisional liability has impacted on claim numbers (as measured in this paper) – claim numbers and incidence rates have both continued to trend down at a steady rate over the past 14 years.

5.3.3 Workers Compensation Act 1987 The Workers Compensation Act 1987 introduced fundamental changes to the Scheme and while it did not directly change the scope of coverage of the Scheme or an injured worker’s rights to access to entitlements, there is some evidence that the introduction of the 1987 Act and its surrounding publicity led to a change in the propensity to claim compensation. Figure 5.8 shows the claims incidence rates for the Scheme before and after 1987 with trend lines added.

Figure 5.8 – Incidence Rate Trends (Scheme Level)

0

10

20

30

40

50

60

70

80

90

1974

/75

1976

/77

1978

/79

1980

/81

1982

/83

1984

/85

1986

/87

1988

/89

1990

/91

1992

/93

1994

/95

1996

/97

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

Figure 5.8 suggests the shift in the level of claims numbers and incidence over this period appears not to be part of a continuing trend and therefore as a result of a one-off impact. Unlike earlier periods, such as around 1943/44 to 1946/47, 1974/75 and 1981/82, where large shifts in the levels of claims occurred there is not an obvious economic or other event associated with the change. We consider this supports the view that the introduction of the 1987 Act did change claiming behaviour and reduce the propensity to claim.


34

The scale of this impact is significant – in the order of 15,000 claims or 10 points in terms of the incidence rate.

5.3.4 Occupational Health and Safety The Occupational Health and Safety Act 1983 introduced an obligation on employers to provide a safe workplace. Since its introduction these obligations have been strengthened, the penalties increased and been more actively policed. The introduction of the Occupational Health and Safety Act 1983 coincided with the start of a long term downward trend in incidence rates following the peak in incidence in 1981/82. In fact in the period from 1938/39 to 1981/82 aside from the period around the end of the Second World War, incidence rates remained relatively flat at about 80 claims per thousand workers for the entire period. It is also worth noting that after standardising for industry mix 1981/82 was the highest point in the period that could be assessed on a standardised basis. Is the timing of the commencement of the Occupational Health and Safety Act 1983 coincidental or is it a factor in the subsequent sustained downward trend from 1981/82 to date? This can be answered by quantifying the other factors that have apparently affected incidence rates over this period. Incidence rates reduced from 80 claims per thousand in 1981/82 to 20 claims per thousand in 2007/08 – a fall of 60 or 75%. From previous analysis we can estimate the following impacts: • Industry Mix - from Figure 5.2 the impact of the change in incidence rates over this period is

around 14 (the difference between the raw and standardised incidence at 1981/82 of 80 and 66 respectively)

• Economic Effects – the short term effect of the recession and industry restructuring around 1981/82 of about 7 (the size of the peak around 1981/82 taken from Figure 5.2 to avoid double counting)

• Legislative Impacts – the apparent impact of the Workers Compensation Act 1987 of 10 (the difference between the incidence rates for 1986/87 and 1988/89 taken from Figure 5.2 to avoid double counting).

This means that in total 31, or approximately half the improvement, can be potentially explained by the above factors. Note we consider this is the maximum impact of these factors as we have assumes that the full effect seen is due to these factors, for example that all of the difference between the incidence rates for 1986/87 and 1988/89 is caused by the 1987 Act. The outstanding factor impacting on incidence rates is the underlying safety of workplaces. The bulk of remaining reduction in incidence rates is likely to be a product of improvements in workplace health and safety. These improvements in workplace safety may encompass a range of different causes including: • Improved awareness of safety issues

• Better use of technology

• Reduced human involvement in high risk activities

• Stronger community attitudes and expectations in relation to workplace safety


35

• Better training of the workforce (in safety and how to do the job safely)

• Improved management systems and processes.

We are not suggesting that these outcomes have been achieved directly by the Occupational Health and Safety Act 1983 but rather by Industry (Employers and Workers) and Government actively working to improve health and safety in the workplace within the policy framework of the Occupational Health and Safety Act 1983 (and its replacement the Occupational Health and Safety Act 2000). 5.4 Other Factors

There are other factors that have the potential to impact on claims incidence. We have identified and considered a number of these including (but do not contend that this list is exhaustive): • Aging of the workforce – as the average age of the workforce increases (as baby boomers

approach retirement age) this may impact claims incidence, potentially increasing incidence rates as older workers are more likely to be injured – incidence rates for older workers are higher (per the NSW WorkCover Statistical Bulletin). This factor should therefore inflate incidence rates. Clearly any inflationary impact of the aging workforce on incidence rates has been overwhelmed by those factors with a downward impact.

• Availability of alternate compensation/support from other sources – If alternative forms of compensation or financial support such as social security, were readily available, this might lead to injured workers choosing to forgo workers compensation entitlements in preference for the alternative. In practice the Commonwealth Government has actively sought to minimise cost shifting from workers compensation to Commonwealth funded schemes, like social security, and access to workers compensation, particularly in a provisional liability environment, remains very straight forward. It is difficult to see how this effect could have a significant downward impact on incidence rates.

• Propensity to claim compensation – as community attitudes to workers compensation and workers compensation claimants evolve, negative associations could potentially lead to behavioural change amongst the workforce and a reduced propensity to claim compensation. If this were the case you might expect to see the biggest effects in injury types that are more subjective, such as for example stress claims. In fact the numbers and proportions of stress claims have increased significantly over this period and it is the more objective injury types, such as traumatic injuries, that have reduced. Therefore we do not consider this is likely to have been a significant factor in the incidence rate reductions since 1982/83.

Overall we consider that the net effect of these other factors on incidence rate over the past 25 years to be small and likely not to be material.


36

6. Conclusions

From the end of the 1930s to the early 1980s incidence rates remain relatively stable in the 70 to 90 claims per thousand workers range, except for the period around the end of the Second World War when there was a substantial spike in rates. Since 1981/82 there has been a significant downward trend in incidence rates. Claims rates are now at an all time low of 20 claims per thousand workers in 2007/08. This represents a fall of 75% from the 1981/82 level of 80 claims per thousand workers and represents a reduction of 84% from the peak of 124 in 1946/47. Changes in industry mix – the reducing importance of some higher risk industries, such as manufacturing and the growth of lower risk service industries – have had a significant impact on incidence rates over the longer term. Economic activity also has a significant impact on incidence rates. The extent of economic and industry restructuring, rather than the movement in economic activity, has had the greater impact on incidence rates. The economic impacts, whether movements in GDP or the broader impacts of industry restructuring, only generate short term effects (after allowing for industry mix changes). The introduction of the Workers Compensation Act 1987 appears to have had a significant one-off impact on claim numbers and incidence rates. This occurred not through a change in the scope of coverage of the Scheme or an injured worker’s rights to access to entitlement, but in change in the environment that led to a change in the propensity to claim compensation. Other workers compensation legislative changes since 1987 appear not to have had any material impact on incidence rates. The introduction of the Occupational, Health and Safety Act 1983 coincides with the start of the sustained downward trend in incidence rates from 1981/82 to date. We quantified the impact of previous factors (industry mix changes, economic effects and Workers Compensation Act 1987) and found that they could only account for, at most, half the reduction in incidence rates since 1981/82. We note there are other factors that may impact on incidence rate, including the aging of the workforce, availability of alternative support and assistance and changes in the propensity to claim. We consider however that these factors are unlikely to have had a significant contribution to incidence rate reductions over this period. We consider that the bulk of remaining reduction in incidence rates is likely to be a product of improvements in workplace health and safety (broadly defined) and that NSW workplaces are safer now than they have ever been. This outcome has been achieved by Industry (Employers and Workers) and Government actively working to improve health and safety in the workplace within the policy framework created by the Occupational Health and Safety Act 1983.


37

Appendices

Appendix A - Data Sources

A.1 - Claims Data Sources 1. WorkCover NSW claims database – which provided data on all workers compensation claims

from the insurers/agents, specialised insurers, self-insurers from 30 June 1987 to May 2009. It also included data from insurers relating to claims incurred under the old 1926 Act Scheme and remaining open after 30 June 1987.

2. Worker’s Compensation Statistics NSW publications 1962/63 to 1986/87 issued by the State Compensation Board and the Workers Compensation Commission – which gave summary statistics of claim information for each financial year.

3. NSW Official Yearbook publications 1926/27 – 1985/86 published by the Australian Bureau of Statistics (ABS) and predecessor organisations. They contain high level statistics for NSW including worker’s compensation claim summary statistics from 1926/27 to 1983/84.

A.2 - Employment Data Sources

1. Labour Force, Australia, Detailed, Quarterly ABS: 6291.0.55.003 which provided employment exposure split by industry from 1984/85 to the present.

2. Wage and Salary Earners, Public Sector, Australia, ABS: 6248.0.55.001 including Table 2. Commonwealth Government, States and Territories ('000) which provided NSW Commonwealth Government employees from 1983/84 to 2007/08.

3. Civilian Employees, Australia ABS: 6214.0 which provided employment exposure data split by industry from 1970/71 to 1978/79.

4. Labour Force Historical Time series, Australia - Labour Force Status by State 6204055001TS0004 which provided NSW employment exposure data from 1966/67 to 1977/78.

5. Labour Force Historical Time series, Australia, February 2009, ABS: 6204.0.55.001 including E06_NOV84 - Employed Persons by Sex, Industry, State, Status in Employment (Nov 1984 - May 1994)

6. NSW Official Yearbook publications 1926/27 – 1985/86 published by the Australian Bureau of Statistics (ABS) and predecessor organisations. They contain high level statistics for NSW including employment data split by industry based on surveys and censuses from 1926/27 to 1983/84.

7. Labour Force, Australia, Detailed, Quarterly, May 2009, ABS: 6291.0.55.003 including E06_aug94 - Employed Persons by Sex, Industry, State, Status in Employment, August 1994 onwards.


38

A.3 - Economic Data Sources 1. Australian National Accounts: National Income, Expenditure and Product, ABS: 5206.0

including Table 1: Key National Accounts Aggregates and Table 6. Gross Value Added by Industry, Chain volume measures and Table 21: State Final Demand, Summary Components by State: Chain volume measures. This provided national GDP figures from 1959/60 to the present and also split by industry from 1974/75 to present. NSW State Final demand was also obtained from 1985/86 to the present.

2. YearBook Australia 2001, History of national accounts in Australia (p. 970-973) which provided a national GDP time series from 1900/01 to the Present.

A.4 - Reference Information 1. Australian and New Zealand Standard Industrial Classification (ANZSIC), 1993, ABS:

1292.0. Incorporates a conversion between ASIC and ANZSIC industry codes. 2. Insurance Premiums Order (1991–92). This was used to help classify claims by industry by

tariff rate number. 3. Denominator Exposure Data from Work Cover for 2003/04 to 2007/08 – which was derived

from ABS statistics which Work Cover use to calculate their incidence rates.

4. Work Cover Statistical Bulletin from 1999/00 to 2007/08. This gave summarised claim information to compare to the claims database.

5. PWC Work Cover Actuarial Valuation Report as at 30 June 2008.


39

Appendix B Data Tables

Table B 1 – Scheme Level

Report Year

New Claims Reported1

NSW Employment

('000s)

Cwlth Govt Employees

('000s)

Exposed Employees

('000s)2

Incidence Rate (Claims / 1000

employees)1926/27 28,495 987 17 715 40 1927/28 44,304 970 17 703 63 1928/29 44,198 965 18 698 63 1929/30 42,091 900 17 651 62 1930/31 28,938 775 14 561 48 1931/32 23,979 774 17 558 43 1932/33 25,600 823 15 596 44 1933/34 34,123 817 17 612 57 1934/35 41,236 887 17 666 65 1935/36 47,492 947 18 711 69 1936/37 53,904 1,021 19 767 73 1937/38 65,201 1,072 20 805 83 1938/39 64,648 1,062 22 795 81 1939/40 65,451 966 27 807 82 1940/41 67,319 1,011 33 835 82 1941/42 74,344 1,020 57 816 90 1942/43 74,778 1,029 58 821 91 1943/44 94,621 1,031 58 822 115 1944/45 98,867 1,032 58 823 120 1945/46 98,017 1,136 55 891 114 1946/47 113,362 1,220 53 944 124 1947/48 97,590 1,263 57 984 101 1948/49 90,388 1,299 60 1,011 91 1949/50 83,821 1,336 70 1,033 82 1950/51 76,368 1,375 73 1,063 73 1951/52 72,322 1,343 70 1,038 69 1952/53 66,396 1,311 70 1,012 65 1953/54 79,784 1,377 68 1,070 77 1954/55 97,367 1,352 70 1,088 90 1955/56 102,580 1,372 71 1,102 94 1956/57 94,863 1,401 70 1,125 85 1957/58 90,501 1,431 72 1,145 80 1958/59 99,988 1,460 73 1,166 87 1959/60 95,788 1,530 77 1,215 80 1960/61 99,403 1,539 77 1,221 82 1961/62 92,408 1,570 85 1,251 75 1962/63 92,675 1,610 87 1,286 73 1963/64 94,792 1,677 90 1,344 72 1964/65 97,501 1,741 94 1,400 71 1965/66 95,627 1,783 96 1,436 67 1966/67 97,864 1,822 98 1,463 68 1967/68 108,783 1,858 102 1,538 73 1968/69 108,162 1,896 104 1,587 69 1969/70 110,606 1,977 107 1,651 68


40

Report Year


NSW Employment

('000s)


('000s)

Exposed Employees

('000s)2


employees)1970/71 110,376 2,023 110 1,698 66 1971/72 117,678 2,053 113 1,686 70 1972/73 136,176 2,080 113 1,710 80 1973/74 146,030 2,090 118 1,715 85 1974/75 140,353 2,058 121 1,683 83 1975/76 131,063 2,058 125 1,678 78 1976/77 122,130 2,083 122 1,688 73 1977/78 125,124 2,111 122 1,712 74 1978/79 125,881 2,112 123 1,712 74 1979/80 133,461 2,230 124 1,814 76 1980/81 144,180 2,248 125 1,828 79 1981/82 145,120 2,257 125 1,797 80 1982/83 118,814 2,183 127 1,732 67 1983/84 111,606 2,240 130 1,777 64 1984/85 115,688 2,276 134 1,804 65 1985/86 114,443 2,374 136 1,890 62 1986/87 104,933 2,393 140 1,913 55 1987/88 - 2,501 136 2,006 - 1988/89 87,193 2,597 135 2,104 42 1989/90 86,898 2,655 138 2,162 41 1990/91 81,267 2,646 135 2,133 38 1991/92 74,336 2,609 130 2,089 35 1992/93 73,371 2,564 124 2,049 35 1993/94 81,479 2,650 115 2,154 39 1994/95 87,748 2,751 124 2,234 40 1995/96 88,649 2,794 109 2,284 39 1996/97 84,407 2,814 80 2,345 36 1997/98 81,902 2,847 75 2,371 35 1998/99 79,137 2,913 68 2,463 33 1999/00 76,033 3,027 70 2,566 30 2000/01 74,121 3,045 66 2,584 29 2001/02 73,233 3,063 64 2,596 28 2002/03 70,969 3,134 61 2,681 27 2003/04 69,707 3,168 60 2,710 26 2004/05 67,485 3,209 60 2,739 25 2005/06 60,665 3,279 63 2,816 22 2006/07 58,848 3,346 55 2,918 21 2007/08 58,279 3,416 55 2,992 20 Total 7,035,328 153,660 6,496 124,654 56 1 Excluding cases of less than 3 days incapacity2 Excluding self-employed, unpaid helpers, employers


41

Table B 2 – Agriculture

Report Year

New Claims

Reported1

NSW Employment

('000s)

Exposed Employees

('000s)2


employees)1962/63 6,775 137 57 120 1963/64 6,865 138 57 121 1964/65 6,425 132 55 115 1965/66 5,984 131 54 110 1966/67 6,549 132 55 120 1967/68 7,343 130 54 135 1968/69 6,660 127 53 125 1969/70 6,829 125 52 131 1970/71 6,700 121 50 132 1971/72 6,660 116 48 136 1972/73 7,027 112 46 149 1973/74 7,099 113 45 155 1974/75 6,472 115 41 149 1975/76 5,698 113 36 148 1976/77 5,028 111 35 142 1977/78 5,036 101 32 151 1978/79 4,531 107 34 139 1979/80 4,806 115 36 138 1980/81 5,207 118 37 142 1981/82 5,069 116 36 138 1982/83 4,521 120 38 122 1983/84 4,286 123 39 112 1984/85 4,522 113 35 122 1985/86 4,030 125 41 106 1986/87 3,643 109 37 94 1987/88 - 124 42 - 1988/89 3,140 120 48 70 1989/90 3,291 116 51 67 1990/91 3,160 126 50 63 1991/92 2,791 114 42 61 1992/93 2,745 103 34 72 1993/94 2,743 108 39 75 1994/95 2,772 103 37 73 1995/96 2,842 114 41 73 1996/97 2,691 107 39 67 1997/98 2,628 131 47 61 1998/99 2,663 128 51 54 1999/00 2,483 129 56 46 2000/01 2,311 133 65 38 2001/02 2,250 110 49 39 2002/03 1,898 103 53 37 2003/04 1,696 89 41 36 2004/05 1,637 91 41 40 2005/06 1,489 91 38 38 2006/07 1,543 93 44 38 2007/08 1,433 97 49 31 Total 191,971 5,327 2,058 93 1 Excluding cases of less than 3 days incapacity2 Excluding self-employed, unpaid helpers, employers


42

Table B 3 – Building and Construction

Report Year

New Claims

Reported1

NSW Employment

('000s)

Exposed Employees

('000s)2




43

Table B 4 - Manufacturing

Report Year


NSW Employment

('000s)

Exposed Employees

('000s)2


employees)1962/63 41,580 455 443 94 1963/64 43,018 476 463 95 1964/65 42,611 493 479 90 1965/66 42,204 501 487 87 1966/67 41,686 508 494 85 1967/68 46,232 517 503 93 1968/69 46,483 526 512 92 1969/70 47,940 538 524 93 1970/71 48,445 543 529 92 1971/72 51,887 521 507 100 1972/73 60,464 524 508 119 1973/74 66,831 542 523 130 1974/75 61,250 482 469 124 1975/76 58,516 466 461 126 1976/77 56,141 467 446 124 1977/78 55,803 434 439 126 1978/79 56,828 479 444 129 1979/80 58,834 461 438 133 1980/81 64,902 471 448 147 1981/82 63,279 451 428 144 1982/83 46,720 398 378 116 1983/84 41,581 403 382 109 1984/85 42,282 383 364 113 1985/86 40,204 395 375 109 1986/87 35,116 381 364 95 1987/88 - 396 377 - 1988/89 24,430 402 381 64 1989/90 24,084 385 363 65 1990/91 21,479 364 345 61 1991/92 18,484 350 326 55 1992/93 17,925 354 332 55 1993/94 20,971 362 340 62 1994/95 22,623 349 327 68 1995/96 22,285 337 315 69 1996/97 20,152 362 336 62 1997/98 18,968 338 316 58 1998/99 16,536 326 298 54 1999/00 15,430 356 328 49 2000/01 14,077 336 308 44 2001/02 14,164 337 313 46 2002/03 13,425 323 303 44 2003/04 12,942 312 290 44 2004/05 12,309 305 282 43 2005/06 10,560 290 268 38 2006/07 9,924 298 280 36 2007/08 9,322 306 290 33 Total 1,600,927 19,002 18,126 88 1 Excluding cases of less than 3 days incapacity2 Excluding self-employed, unpaid helpers, employers


44

Table B 5 – Transport and Storage

Report Year

New Claims

Reported1

NSW Employment

('000s)

Exposed Employees

('000s)2




45

Table B 6 – Wholesale and Retail Trade

Report Year

New Claims

Reported1

NSW Employment

('000s)

Exposed Employees

('000s)2




46

Table B 7 –Other Industries

Report Year


NSW Employment

('000s)


('000s)

Exposed Employees

('000s)2


employees)1962/63 11,766 474 87 330 36 1963/64 11,611 503 90 354 34 1964/65 11,910 541 94 383 32 1965/66 12,208 552 96 392 31 1966/67 13,720 576 98 406 34 1967/68 16,376 596 102 464 38 1968/69 16,507 610 104 491 35 1969/70 17,467 660 107 527 34 1970/71 17,877 688 110 557 33 1971/72 18,000 734 113 560 32 1972/73 19,886 741 113 565 35 1973/74 21,423 718 118 543 39 1974/75 22,974 751 121 577 41 1975/76 23,799 786 125 601 40 1976/77 22,791 814 122 634 37 1977/78 24,539 867 122 670 38 1978/79 25,078 840 123 661 38 1979/80 27,065 912 124 739 39 1980/81 29,942 905 125 733 41 1981/82 31,327 950 125 734 43 1982/83 29,424 991 127 766 39 1983/84 29,636 994 130 772 39 1984/85 31,491 1,103 134 865 38 1985/86 32,698 1,177 136 929 36 1986/87 30,522 1,224 140 968 32 1987/88 - 1,263 136 1,012 - 1988/89 31,869 1,310 135 1,056 31 1989/90 31,682 1,367 138 1,112 29 1990/91 30,161 1,384 135 1,118 27 1991/92 28,816 1,398 130 1,136 26 1992/93 29,411 1,355 124 1,093 26 1993/94 31,878 1,425 115 1,175 28 1994/95 34,213 1,494 124 1,215 29 1995/96 34,610 1,517 109 1,263 28 1996/97 34,148 1,566 80 1,323 26 1997/98 31,624 1,563 75 1,335 24 1998/99 31,725 1,613 68 1,397 23 1999/00 30,498 1,696 70 1,468 21 2000/01 30,530 1,731 66 1,512 20 2001/02 31,321 1,743 64 1,507 21 2002/03 31,201 1,785 61 1,560 20 2003/04 31,576 1,845 60 1,605 20 2004/05 31,001 1,858 60 1,602 19 2005/06 28,363 1,940 63 1,704 17 2006/07 28,316 1,982 55 1,769 16 2007/08 28,978 1,993 55 1,775 16 Total 1,171,958 53,535 4,807 43,957 27 1 Excluding cases of less than 3 days incapacity2 Excluding self-employed, unpaid helpers, employers


47

Appendix C – Exposed Employees Calculations

Table C 1 – Scheme Level (Exposed Employees Calculations)

A B C D E F G H I

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)

Adjusted Exposed

Employees ('000s)

Monthly Employment

Series

Wage and Salary

Earners

Adjustments to employment

growth

Rural, Mining, Manufacturing Employment

Commonwealth Government Employees

Exposed Employees

('000s)1926/27 987 732 732 351 17 715 1927/28 970 720 720 345 17 703 1928/29 965 716 716 344 18 698 1929/30 900 668 668 320 17 651 1930/31 775 575 575 276 14 561 1931/32 774 574 574 276 17 558 1932/33 823 611 611 293 15 596 1933/34 817 628 628 640 17 612 1934/35 887 682 682 695 17 666 1935/36 947 729 729 742 18 711 1936/37 1,021 786 786 800 19 767 1937/38 1,072 825 825 840 20 805 1938/39 1,062 817 817 832 698 22 795 1939/40 966 790 834 856 732 73% 27 807 1940/41 1,011 826 868 903 766 73% 33 835 1941/42 1,020 834 873 773 73% 57 816 1942/43 1,029 841 879 780 73% 58 821 1943/44 1,031 842 880 781 73% 58 822 1944/45 1,032 843 881 782 73% 58 823 1945/46 1,136 929 946 861 73% 55 891 1946/47 1,220 997 997 924 73% 53 944 1947/48 1,263 1,044 1,041 964 103% 57 984 1948/49 1,299 1,073 1,071 991 103% 60 1,011 1949/50 1,336 1,103 1,102 1,019 103% 70 1,033 1950/51 1,375 1,136 1,136 1,049 103% 73 1,063 1951/52 1,343 1,109 1,109 1,025 103% 70 1,038 1952/53 1,311 1,083 1,082 1,001 103% 70 1,012 1953/54 1,377 1,137 1,137 1,051 103% 68 1,070 1954/55 1,352 1,140 1,157 1,072 88% 70 1,088 1955/56 1,372 1,158 1,173 1,088 88% 71 1,102 1956/57 1,401 1,182 1,195 1,111 88% 70 1,125 1957/58 1,431 1,207 1,217 1,134 88% 72 1,145 1958/59 1,460 1,232 1,239 1,158 88% 73 1,166 1959/60 1,530 1,291 1,292 1,213 88% 77 1,215 1960/61 1,539 1,298 1,298 1,220 88% 77 1,221 1961/62 1,570 1,350 1,336 1,253 108% 85 1,251 1962/63 1,610 1,384 1,373 1,285 108% 87 1,286 1963/64 1,677 1,441 1,434 1,338 108% 90 1,344 1964/65 1,741 1,496 1,494 1,390 108% 94 1,400 1965/66 1,783 1,532 1,532 1,423 108% 96 1,436 1966/67 1,822 1,628 1,561 1,450 99% 98 1,463 1967/68 1,858 1,661 1,639 1,523 99% 102 1,538 1968/69 1,896 1,695 1,691 1,571 99% 104 1,587 1969/70 1,977 1,767 1,758 1,633 99% 107 1,651


48

A B C D E F G H I

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)

Adjusted Exposed

Employees ('000s)

Monthly Employment

Series

Wage and Salary

Earners

Adjustments to employment

growth

Rural, Mining, Manufacturing Employment


Exposed Employees

('000s)1970/71 2,023 1,808 1,808 1,680 99% 110 1,698 1971/72 2,053 1,799 1,799 1,676 113 1,686 1972/73 2,080 1,823 1,823 1,724 113 1,710 1973/74 2,090 1,832 1,832 1,788 118 1,715 1974/75 2,058 1,804 1,804 1,745 121 1,683 1975/76 2,058 1,804 1,804 1,766 125 1,678 1976/77 2,083 1,810 1,810 1,754 122 1,688 1977/78 2,111 1,834 1,834 1,778 122 1,712 1978/79 2,112 1,835 1,835 1,778 123 1,712 1979/80 2,230 1,937 1,937 124 1,814 1980/81 2,248 1,953 1,953 125 1,828 1981/82 2,257 1,922 1,922 125 1,797 1982/83 2,183 1,859 1,859 127 1,732 1983/84 2,240 1,907 1,907 130 1,777 1984/85 2,276 1,938 1,938 134 1,804 1985/86 2,374 2,025 2,025 136 1,890 1986/87 2,393 2,053 2,053 140 1,913 1987/88 2,501 2,142 2,142 136 2,006 1988/89 2,597 2,239 2,239 135 2,104 1989/90 2,655 2,300 2,300 138 2,162 1990/91 2,646 2,267 2,267 135 2,133 1991/92 2,609 2,219 2,219 130 2,089 1992/93 2,564 2,173 2,173 124 2,049 1993/94 2,650 2,269 2,269 115 2,154 1994/95 2,751 2,358 2,358 124 2,234 1995/96 2,794 2,392 2,392 109 2,284 1996/97 2,814 2,425 2,425 80 2,345 1997/98 2,847 2,446 2,446 75 2,371 1998/99 2,913 2,531 2,531 68 2,463 1999/00 3,027 2,636 2,636 70 2,566 2000/01 3,045 2,649 2,649 66 2,584 2001/02 3,063 2,660 2,660 64 2,596 2002/03 3,134 2,742 2,742 61 2,681 2003/04 3,168 2,770 2,770 60 2,710 2004/05 3,209 2,799 2,799 60 2,739 2005/06 3,279 2,879 2,879 63 2,816 2006/07 3,346 2,973 2,973 55 2,918 2007/08 3,416 3,047 3,047 55 2,992

Interpolated / Extrapolated / Calculated Data


49

Column Data Sources Calculation Methods

A)

Prior to 1966/67 - Census data from Source 1.6.1.31966/67 to 1977/78 - Source 1.6.2.41978/79 to 1983/84 - Source 1.6.2.31984/85 to Present - Source 1.6.2.1

1926/27 to 1931/32 was extrapolated using (G)1933/34 to 1937/37 was interpolated using (D)1939/40 to 1964/65 was interpolated using (E)

B)

Prior to 1984/85 - Census data from Source 1.6.1.31984/85 to 1993/94 - Source 1.6.2.51994/95 to Present - Source 1.6.2.6

1926/27 to 1931/32 was extrapolated using (G)1933/34 to 1937/37 was interpolated using (D)1939/40 to 1964/65 was interpolated using (E)1966/67 to 1983/84 was interpolated using (A)

C) n/a(B)*(1+ (growth in C)* (F)) for 1939/40 to 1969/70(B) otherwise

D)1940/41 NSW Official Yearbook (p. 596) (no. of workers on payroll - monthly series) n/a

E) Source 1.6.1.3 (excl. Rural and Personal Service) Interpolations done using simple averages

F) n/a

"Goal sought" adjusments to make the growth to the data points of C) the same as in (E) and (D) in 1938/39 to 1939/40

G)1932/33 NSW Official Yearbook (p.776) (comprises approx. 50% of employed workforce) n/a

H)

1926/27 to 1956/57 - Source 1.6.1.31965/66 to 1979/80 - Source 1.6.2.31983/84 to Present - Source 1.6.2.2

1941/42 to 1964/65 was interpolated using (E)1980/81 to 1982/83 was interpolated using (A)

I) n/a (B) - (H)


50

Table C.2 – Agriculture (Exposed Employees Calculations)

A B C

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)

Employment - Different Series

1962/63 137 57 1963/64 138 57 1964/65 132 55 1965/66 131 54 1966/67 132 55 1967/68 130 54 1968/69 127 53 1969/70 125 52 1970/71 121 50 1971/72 116 48 1972/73 112 46 105 1973/74 113 45 106 1974/75 115 41 108 1975/76 113 36 106 1976/77 111 35 105 1977/78 101 32 95 1978/79 107 34 100 1979/80 115 36 1980/81 118 37 1981/82 116 36 1982/83 120 38 1983/84 123 39 1984/85 113 35 1985/86 125 41 1986/87 109 37 1987/88 124 42 1988/89 120 48 1989/90 116 51 1990/91 126 50 1991/92 114 42 1992/93 103 34 1993/94 108 39 1994/95 103 37 1995/96 114 41 1996/97 107 39 1997/98 131 47 1998/99 128 51 1999/00 129 56 2000/01 133 65 2001/02 110 49 2002/03 103 53 2003/04 89 41 2004/05 91 41 2005/06 91 38 2006/07 93 44 2007/08 97 49



51


A)1978/79 to 1983/84 - Source 1.6.1.31984/85 to Present - Source 1.6.2.1

1962/63 to 1971/72 was extrapolated using (B)1972/73 to 1977/78 was extrapolated using (C)

B)

Prior to 1984/85 - Source 1.6.1.31984/85 to 1993/94 - Source 1.6.2.51994/95 to Present - Source 1.6.2.6

Prior to 1975/76 linear interpolations were done within (B)1975/76 to 1983/84 was interpolated using (A)

C)

1986/87 NSW Official Yearbook (p. 228) (minor change in definitions classifications) n/a


52

Table C.3 – Building and Construction (Exposed Employees Calculations)

A B

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)1962/63 132 108 1963/64 137 112 1964/65 142 115 1965/66 153 124 1966/67 146 118 1967/68 149 121 1968/69 153 125 1969/70 160 130 1970/71 166 135 1971/72 171 139 1972/73 172 140 1973/74 170 138 1974/75 173 141 1975/76 170 124 1976/77 156 117 1977/78 149 119 1978/79 142 116 1979/80 162 112 1980/81 162 111 1981/82 170 117 1982/83 122 84 1983/84 151 104 1984/85 160 110 1985/86 161 112 1986/87 175 121 1987/88 169 120 1988/89 196 134 1989/90 203 137 1990/91 196 135 1991/92 176 113 1992/93 183 118 1993/94 184 118 1994/95 213 142 1995/96 202 132 1996/97 191 134 1997/98 212 142 1998/99 217 153 1999/00 241 174 2000/01 225 148 2001/02 233 156 2002/03 242 162 2003/04 275 192 2004/05 269 198 2005/06 276 190 2006/07 289 208 2007/08 286 211



53


A)1974/75 to 1983/84 - Source 1.6.1.31984/85 to Present - Source 1.6.2.1 1962/63 to 1973/74 was extrapolated using (B)

B)

Prior to 1984/85 - Source 1.6.1.31984/85 to 1993/94 - Source 1.6.2.51994/95 to Present - Source 1.6.2.6 1979/80 to 1983/84 was extrapolated using (A)


54

Table C.4 – Manufacturing (Exposed Employees Calculations)

A B

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)1962/63 455 443 1963/64 476 463 1964/65 493 479 1965/66 501 487 1966/67 508 494 1967/68 517 503 1968/69 526 512 1969/70 538 524 1970/71 543 529 1971/72 521 507 1972/73 524 508 1973/74 542 523 1974/75 482 469 1975/76 466 461 1976/77 467 446 1977/78 434 439 1978/79 479 444 1979/80 461 438 1980/81 471 448 1981/82 451 428 1982/83 398 378 1983/84 403 382 1984/85 383 364 1985/86 395 375 1986/87 381 364 1987/88 396 377 1988/89 402 381 1989/90 385 363 1990/91 364 345 1991/92 350 326 1992/93 354 332 1993/94 362 340 1994/95 349 327 1995/96 337 315 1996/97 362 336 1997/98 338 316 1998/99 326 298 1999/00 356 328 2000/01 336 308 2001/02 337 313 2002/03 323 303 2003/04 312 290 2004/05 305 282 2005/06 290 268 2006/07 298 280 2007/08 306 290



55


A)1962/63 to 1983/84 - Source 1.6.1.31984/85 to Present - Source 1.6.2.1 n/a

B)


1962/63 to 1970/71 was extrapolated using (A)1979/80 to 1983/84 was extrapolated using (A)


56

Table C.5 – Transport and Storage (Exposed Employees Calculations)

A B

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)1962/63 102 83 1963/64 103 84 1964/65 106 87 1965/66 107 88 1966/67 109 89 1967/68 111 91 1968/69 114 93 1969/70 118 97 1970/71 120 99 1971/72 118 96 1972/73 119 97 1973/74 124 101 1974/75 122 100 1975/76 121 104 1976/77 115 103 1977/78 127 103 1978/79 125 105 1979/80 133 114 1980/81 128 109 1981/82 134 115 1982/83 129 110 1983/84 131 112 1984/85 133 113 1985/86 124 104 1986/87 128 107 1987/88 131 110 1988/89 137 117 1989/90 131 110 1990/91 141 116 1991/92 133 107 1992/93 126 102 1993/94 120 93 1994/95 144 125 1995/96 145 119 1996/97 149 124 1997/98 149 123 1998/99 159 136 1999/00 159 138 2000/01 161 135 2001/02 178 154 2002/03 171 142 2003/04 157 134 2004/05 180 154 2005/06 169 151 2006/07 188 162 2007/08 191 171



57



B)

Prior to 1984/85 - Source 1.6.1.31984/85 to 1993/94 - Source 1.6.2.51994/95 to Present - Source 1.6.2.6 1979/80 to 1983/84 was extrapolated using (A)


58

Table C.6 – Wholesale and Retail Trade (Exposed Employees Calculations)

A B C

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)

Employment - Different Series

1962/63 310 266 224 1963/64 320 274 230 1964/65 328 281 236 1965/66 339 290 244 1966/67 351 301 253 1967/68 356 305 257 1968/69 366 313 264 1969/70 376 322 271 1970/71 384 329 277 1971/72 392 336 283 1972/73 412 353 301 1973/74 424 363 315 1974/75 415 356 309 1975/76 401 354 1976/77 419 352 1977/78 434 349 1978/79 419 353 1979/80 446 376 1980/81 464 391 1981/82 436 367 1982/83 423 356 1983/84 438 369 1984/85 384 316 1985/86 392 328 1986/87 376 316 1987/88 418 346 1988/89 433 368 1989/90 453 389 1990/91 435 369 1991/92 438 365 1992/93 442 369 1993/94 451 389 1994/95 449 388 1995/96 478 414 1996/97 439 389 1997/98 456 408 1998/99 471 428 1999/00 447 402 2000/01 459 416 2001/02 463 417 2002/03 510 461 2003/04 489 448 2004/05 508 462 2005/06 513 465 2006/07 497 455 2007/08 543 496



59



B)


Prior to 1979/80 linear interpolations were done using (C)1979/80 to 1983/84 was interpolated using (A)

C)

1976/77 and Prior NSW Official Yearbooks (minor change in definitions and classifications) n/a


60

Table C.7 –Other Industries (Exposed Employees Calculations)

A B C D

Report Year

NSW Employment

(000's)

Excl. Self-Employed

('000s)


Exposed Employees

('000s)1962/63 474 417 87 330 1963/64 503 444 90 354 1964/65 541 477 94 383 1965/66 552 489 96 392 1966/67 576 504 98 406 1967/68 596 566 102 464 1968/69 610 595 104 491 1969/70 660 633 107 527 1970/71 688 667 110 557 1971/72 734 673 113 560 1972/73 741 679 113 565 1973/74 718 661 118 543 1974/75 751 698 121 577 1975/76 786 726 125 601 1976/77 814 756 122 634 1977/78 867 792 122 670 1978/79 840 784 123 661 1979/80 912 862 124 739 1980/81 905 858 125 733 1981/82 950 859 125 734 1982/83 991 893 127 766 1983/84 994 902 130 772 1984/85 1,103 999 134 865 1985/86 1,177 1,065 136 929 1986/87 1,224 1,108 140 968 1987/88 1,263 1,148 136 1,012 1988/89 1,310 1,191 135 1,056 1989/90 1,367 1,250 138 1,112 1990/91 1,384 1,253 135 1,118 1991/92 1,398 1,266 130 1,136 1992/93 1,355 1,217 124 1,093 1993/94 1,425 1,291 115 1,175 1994/95 1,494 1,339 124 1,215 1995/96 1,517 1,371 109 1,263 1996/97 1,566 1,403 80 1,323 1997/98 1,563 1,410 75 1,335 1998/99 1,613 1,465 68 1,397 1999/00 1,696 1,538 70 1,468 2000/01 1,731 1,577 66 1,512 2001/02 1,743 1,571 64 1,507 2002/03 1,785 1,621 61 1,560 2003/04 1,845 1,665 60 1,605 2004/05 1,858 1,662 60 1,602 2005/06 1,940 1,767 63 1,704 2006/07 1,982 1,824 55 1,769 2007/08 1,993 1,830 55 1,775



61


A) n/a

Scheme total - Agriculture - Building and Construction - Manufacturing - Transport annd Storage - Wholesale and Retail Trade

B) n/a

Scheme total - Agriculture - Building and Construction - Manufacturing - Transport annd Storage - Wholesale and Retail Trade

C) n/a Assumed to be the same as Scheme TotalD) n/a (B) - C)

Documents

Long Term Trends in Worker Compensation Claims FINAL · Workers compensation claims and claims incidence rates (the number of claims per thousand workers) vary over time and are apparently