Move to protect 330K NSW business from ‘catastrophic’ rise in icare premiums

A last-minute intervention from the NSW Government will see thousands of NSW businesses have rising insurance costs capped after employers voiced fears over a proposal to hike premiums.

A “catastrophic” move to drastically hike insurance premiums for more than 300,000 NSW businesses, in a move employers fear would cripple smaller operators, has been hobbled with the state government moving to cap the rise.

The Telegraph can reveal the NSW Government has directed icare, the state insurer which services 330,000 NSW employers, to cap premium rises at eight per cent.

It comes after icare had appealed to the state government for a 22 per cent rise in premiums, briefing notes to the new Labor state government revealed, with icare saying the rise was needed so they could remain financially viable.

A directive from work, health and safety Minister Sophie Cotsis to the icare board and seen by The Telegraph, said she was “deeply disappointed” the insurer “has been so seriously run down” that it would require “significant premium increases”.

“Small increases put off over the past seven years have burdened the public with the requirement for a large increase now,” she wrote.

Stephanie Raskopoulos is the chief financial officer at her family's aged care and laundry businesses in Sydney. They fear a proposal to dramatically hike insurance premiums with icare would be disastrous for their businesses. Picture: Gaye Gerard

She added a “sticker shock” increase of an immediate 22 per cent increase in premiums was “not in the public interest” before directing raises to be limited to an average increase of eight per cent per annum over the next three years.

“By moderating the increase, I am balancing this with the real pressures faced by NSW businesses,” she said.

Businesses speaking to The Telegraph warned a 22 per cent rise would have been a “disaster” for them.

Brian Laul in his business, the Wizard of Oz. Leumeah. Picture: Angelo Velardo

Brian Laul, the owner of children’s party venue Oz Funland at Leumeah, said the prospect of a 22 per cent rise would have placed the business in a perilous position.

“Raising them 22 per cent is just terrible – everything else is rising (too, like) electricity, the cost of goods,” he said.

“At the end of the day we’ve been here 15 years – but we’ve never had such a murky year ahead to look forward to.”

“We’ve had businesses close down all around us – the future is really not looking bright.”

Business NSW chief executive officer Daniel Hunter.

Peter Raskopoulos, the owner of a family-run aged care home in Strathfield as well as a commercial laundromat, said a 22 per cent hike would severely impact their businesses.

“It’d kill you. With aged care you can’t increase revenue, and in laundry you have got to stay competitive, so it just comes straight out of your bottom line,” he said.

His daughter and the businesses’ chief financial officer, Stephanie, added that figure would have a “huge impact” on their operations.

Business NSW CEO Daniel Hunter said “anything near 22 per cent would be catastrophic for businesses in NSW”.

“It’s government’s role to step in and not allow icare to set their own prices and make it more fair for businesses,” he said.

“icare needs to focus on running a more efficient workers’ compensation scheme, which should be based around improving return to work rates for injured workers and looking after them and their families.”

A spokesman for icare said the body “acknowledges moderating an increase in premiums balances the cost impacts on NSW businesses with the long-term sustainability of the insurance scheme and the needs of injured workers”.

“We are working with the government now to implement their direction,” he said.

Originally published as Move to protect 330K NSW business from ‘catastrophic’ rise in icare premiums