Key pillar in ‘rushed’ NSW workers comp reform to be targeted by Coalition MPs as
The NSW government is now facing an uphill battle to pass the legislation before the June budget, something Premier Chris Minns says will hike insurance premiums for thousands of businesses across the state.
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
The NSW Coalition will move to block a key plank of Treasurer Daniel Mookhey’s crackdown on workers compensation payments, with Liberal MPs declaring they will fight a “rushed” attempt to overhaul the workplace insurance system.
Mr Mookhey is now facing an uphill battle to pass the legislation before his June budget, something Premier Chris Minns says will hike insurance premiums for thousands of businesses across the state.
Opposition MPs resolved to move six amendments to the government’s workplace compensation overhaul on Tuesday, including moving to strike out a clause increasing the “impairment threshold” required for an injured worker to get lifetime payments.
The government wants to raise the “whole person impairment” WPI threshold for psychological injuries to 31 per cent, which would cut more workers off compensation payments after two and a half years.
Liberal MPs on Tuesday said that threshold was “cruel” and “inhumane”.
That language echoes UnionsNSW boss Mark Morey, who last month launched an all-out assault against a crackdown on psychological injury claims.
Despite opposing the WPI increase, the Opposition will also move amendments seeking to tighten access to compensation payments.
Coalition MPs want “excessive work demands” removed as a basis for a psychological injury claim, and ensure that behaviour is only “bullying” if done “with intent to cause harm or distress”.
If the amendments fail, the Coalition wants to refer the legislation to a parliamentary inquiry - which would prevent the bill passing into law before the new financial year.
The Daly Telegraph on Tuesday revealed that without reform, businesses are set to pay an extra $1 billion in insurance premiums each year over the next four years.
Liberal MPs said their decision to delay workers compensation payments passing this week would not have an impact on premiums for the next financial year, as they have already been set.
However, the Premier warned that if the crackdown does not pass into law this week, businesses would be paying more.
“July 1 is a key date for us and iCare has already identified premium increases unless there’s reforms to the system,” Mr Minns said.
“The actuaries have to make a decision at the beginning of the financial year and if there’s no change to the system they have to play the ball where it lies”
“If the Liberal party doesn’t back a reduction in premiums for small business, just ask the question what is the point of the Liberal party, I thought this was the reason they exist,” he said.
$1B bill for businesses should workers comp reform fail
Businesses and not-for-profit organisations will have to pay an extra $1 billion per year in workers compensation premiums should reforms proposed by the Minns government fail to pass parliament.
In a new NSW Treasury analysis of insurance premiums, not-for-profit organisations and charities will be among the hardest hit with premiums skyrocketing as the number of costly psychological injury claims increases.
The Minns government will this week attempt to pass legislation cracking down on the workers compensation scheme, designed to stop the growing number of spurious psychological injury claims.
The reforms will also raise the threshold at which psychological injury claimants can receive permanent ongoing compensation.
The reforms will only be able to pass with support from the Coalition, who met on Monday afternoon to discuss their position.
Coalition sources said the cabinet was divided over whether to support the reforms, with many in the party room wishing to refer the legislation to an upper house inquiry, delaying any reform until after the NSW budget is handed down later this month. It is understood that the Coalition will seek to make amendments to the legislation, including reducing the whole person impairment threshold, from the 30 per cent proposed in the government’s reforms. The Coalition’s final position will be decided at a party room meeting on Tuesday morning.
Opposition leader Mark Speakman said on Monday: “We got this bill less than a week ago, it is complex, it is rushed and symptomatic of the shambolic approach of Chris Minns.”
New NSW Treasury modelling shows without reform, workers compensation premiums will cost businesses and not-for-profit organisations an extra $1 billion a year over four years to the 2028-29 financial year.
In the not-for-profit sector, premiums have doubled over the last four years, rising almost twice as fast as wages. Over four years workers compensation premiums have increased by 95 per cent, while wages increased by 49 per cent.
In comparison, premiums have grown by 57 per cent over the last four years across the entire private sector. There are currently 3.8 million workers covered by the nominal insurer. Of this number 240,000 workers are in the not-for-profit sector.
The number of claims for psychological injuries in the not-for-profit sector has also less than doubled in the last four years. The number of psychological claims in the not-for-profit sector rose from 912 in 2020 to 1,717 in 2024.
NSW Treasury predicts soaring deficits in the private sector’s nominal insurer scheme, administered through iCare, will see workers compensation premiums rise 36 per cent by the 2027-28 financial year.
Premier Chris Minns said on Monday, many small businesses would struggle to pay the 36 per cent increase premiums expected over the next three years.
“If there are not urgent changes in the next few weeks then the government will be expected to put in an additional $2 billion perhaps more into the workers comp scheme for our employees,” he said.
“That’s separate to the massive premium increases the private sector will have to pay.
This comes after The Daily Telegraph reported on Monday that business groups predict tens of thousands of businesses will be forced to close their doors if the cost of premiums are not reined in.
Do you have a story for The Daily Telegraph? Message 0481 056 618 or email tips@dailytelegraph.com.au
Originally published as Key pillar in ‘rushed’ NSW workers comp reform to be targeted by Coalition MPs as
Join the conversation
Katy Perry’s Sydney fans weigh in on her trip to space
She felt like “the most hated person on the internet” and a “human piñata” as fans turned on her after a bizarre trip to space, but there’s still plenty of love for Katy Perry in Sydney.
Read more
‘Poorly chosen’: Senior Lib says call for reverse quotas was a joke
A member of the committee which took over control of the NSW Liberal branch has apologised after triggering fury among women party members with his comments, which included calling them “so assertive”.
Read more