NSW government agencies pump millions into public workers’ compensation fund

More than $6.1 billion of taxpayer dollars has been spent to top up the state’s workers’ compensation scheme over the past six years, with NSW Police shelling out $737 million in the past year alone.

Government agencies including education, health, the police and corrective services are forking out millions of dollars a year to keep the state’s workers’ compensation scheme afloat, it can be revealed.

More than $6.1 billion of taxpayer dollars has been spent to top up the bloated public insurance fund in the past six years, with $1.6 billion spent in the past year alone.

The figures can be revealed after the Saturday Telegraph obtained an exclusive breakdown of how much each agency has been forced to tip into the Treasury Managed Fund from covering public sector workers.

It comes after the NSW Upper House requested the breakdown from the Treasury this week amid the parliamentary inquiry into worker’s compensation reforms.

According to the data, NSW Police have consistently handed over the most money to the insurance fund as the agency has received the most claims, including the most expensive claims.

NSW Treasurer Daniel Mookhey says no more money will be pumped into the scheme until reforms are made. Photo: NewsWire/ Gaye Gerard

In 2023-24, NSW Police had to shell out $737 million to keep the scheme afloat, nearly double the amount it contributed in 2020-21, due to rising claim costs.

Education has forked out the second largest sums with $295 million diverted to the scheme in the last year – money the government claims should have gone into building schools, with a new high school costing up to $200 million.

NSW Police contributed the largest sums to the insurance fund in the past six years, including $737 million in 2023-24. Picture: NewsWire / Nadir Kinani

In his opening statement to the Upper House inquiry last month, Mr Mookhey said he would not allow any more money to be pumped into the scheme until reforms are made.

“Since I became Treasurer, the Government has authorised an additional $1.2 billion in cash injections to keep the public insurer funded,” he said.

“(Former) Treasurers Perrottet and Kean authorised an earlier $4.9 billion (and) since 2018 governments have borrowed $6.1 billion.

“I will not be authorising any further injections. Not until parliament decides its collective response to a scheme that most acknowledge is failing.

NSW Ambulance, fire and health contributed millions to the fund. Picture: Jeremy Piper

“Not when that money is coming at the expense of schools, hospitals, or kids in need of out-of-home care.”

At the time of his speech, Mr Mookhey warned the upcoming budget on June 24 will take a $2.6 billion hit following its latest valuation last December.

The government’s reforms include a controversial proposal to increase the “impairment” threshold required for a person to claim lifetime compensation payments.

Mr Mookhey has previously said without reform, businesses would face a 36 per cent increase in insurance premiums over the next three years to prevent the compensation scheme from collapsing.

He will appear before the Public Accountability and Work Committee on Tuesday to give public evidence on why reform is urgent, but faces an uphill battle amid push back from the Liberals, who have labelled the threshold “cruel”.