Chris Minns budget hurtling towards workers’ compensation barrier

NSW Premier Chris Minns has accused the Coalition of letting the Greens ‘call the shots’ as it stands in the way of what he says are fiscally critical changes to workers’ compensation.

NSW Premier Chris Minns in question time. Picture: NewsWire / Gaye Gerard

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The Minns government will not compromise on its plan to change how workplace psychological injuries are compensated, despite opposition from the Greens, ­unions and the Coalition, leaving policy delays near-inevitable.

NSW Labor’s proposed reform to the whole-body impairment (WBI) threshold for ongoing workers’ compensation is the centrepiece of its new workers’ compensation policy, intended to alleviate pressures on the state government’s bottom line and help businesses with ballooning insurance premiums.

Under the proposal, the WBI threshold for mental injuries would rise from 21 per cent now, to 25 per cent in ­October, and 31 per cent by mid-2026.

Those below the new threshold would be cut from weekly income support after 2½ years.

The opposition on Tuesday said it could not support any rise above 21 per cent. Premier Chris Minns said amendments proposed by the Coalition represented a $1.9bn slug to the taxpayer over four years and made clear WBI threshold changes were non-negotiable.

“Even the 25 per cent WBI, which has been loosely or mildly floated as a compromise, represents a $400m tax on small business each and every year,” Mr Minns said in question time.

“After the federal election, we were wondering what the Liberal Party would do to reinvent themselves, and they’ve partnered up with the Greens.

“(Greens MP) Jenny (Leong) is calling the shots and (Opposition Leader) Mark (Speakman) and (opposition work health and safety spokesperson) Tim (James) are falling in line.”

The average cost of psychological injury claims has nearly doubled in five years to almost $300,000 and all businesses, including those that do not have a claim in the system, face a 36 per cent hike in workers’ compensation premiums over three years.

While NSW Treasurer Daniel Mookhey reaffirmed WBI changes were inalienable, he left the door open to a broader policy compromise. “We’ve always said we will test all propositions put to us in good faith,” he said.

NSW Treasurer Daniel Mookhey. Picture: NewsWire / Gaye Gerard

“My worry is that the opposition is simply playing political games with the Greens party, as opposed to seriously trying to reform this scheme.

“Every day in which we delay reform is a day in which the reform task becomes harder.”

While the policy’s passage would represent a pre-budget victory for Mr Mookhey, he told the media his June 24 budget already baked in the assumption that the law remains as is.

Mr Mookhey denied that the opposition had not received modelling upon which it could determine the financial implications of a potential amendment or compromise, saying the Coalition had been given requested information on Monday night, before it publicly opposed the bill.

Opposition Treasury spokesperson Damien Tudehope later disputed this, saying the opposition “asked a series of questions, and we got a series of numbers (back) without the modelling which demonstrated where those numbers had come from”.

The opposition on Tuesday said it would seek widespread amendments to the bill, which it hoped to rally crossbenchers behind, seeking to tighten the belt on workplace bullying compensation claims and payments for excessive work demands, instead of WBI threshold changes.

On Tuesday it called for a parliamentary inquiry to run until July or August as the bill passed the lower house, with a vote in the upper house due on Thursday.

While Mr Mookhey told 2GB there were “still conversations to be had”, an impasse seems increasingly likely as both major parties refuse to compromise on the WBI threshold.

Opposition Leader Mark Speakman. Picture: NewsWire / Gaye Gerard

Mr Speakman on Wednesday urged the government to pass the amended bill and prosecute any changes to the WBI threshold after the budget.

“The government has already identified a series of savings, many of which we support. We’ve identified additional savings,” he said. “If the government wants to do the right thing by business, they can accept those savings now and legislate now. They can come back later if they want to have another go at WBI.

“We have the spectacle of Daniel Mookhey overnight telling us that there’s a $1.9bn consequence over four years if you accept the opposition’s proposals rather than the government’s proposals.

“That’s a figure that has been plucked out of the air for the first time when the bill has already gone through the Legislative Assembly. It’s a figure with no detail, no substantiation and no modelling.”

A one-day inquiry in May heard that under the planned legislation, only 27 individual claimants would remain on indefinite repayment plans.

Fresh off the back of a wage deal with the Rail, Tram and Bus Union that brought an end to one of the government’s most protracted industrial disputes, the compensation bill seeks to overhaul an outdated system that has fuelled explosions in psychological injury claims, lawfare and employer costs.