NSW Liberals primed to block workers’ compensation bill

The NSW Labor government’s hope for planned workers’ compensation reforms have diminished after Liberal MPs called for heavy amendments that would gut its core cuts.

NSW Opposition Leader Mark Speakman in question time. Picture: NewsWire / Gaye Gerard

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The NSW opposition will stall controversial but fiscally critical workers’ compensation changes ahead of the state budget, saying Labor is rushing “nasty” and unjust legislation.

NSW Premier Chris Minns is facing an unlikely unified opposition from unions and Coalition against his plan to increase workers’ protections while tapering off compensation payments.

Mr Minns is hoping to cut spending ahead of the annual budget this month and reduce losses on psychological injury claims.

The opposition on Tuesday said it would seek widespread amendments to the bill, which it hoped to rally crossbenchers behind, preventing changes to the psychological injury threshold and tightening the belt on bullying claims and compensation for excessive work demands.

The workers’ compensation bill has won the Minns government the support of business groups – including ClubsNSW, Australian Hotels Association NSW, the Pharmacy Guild of Australia, Restaurant and Catering Australia, Australian Childcare Alliance, Business NSW and the Business Council of Australia – through its raising of the threshold for whole-person impairment for psychological injury from 21 per cent now to 25 per cent in ­October, and 31 per cent by mid-2026.

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

“These reforms … appeared at five minutes to midnight,” NSW Opposition Leader Mark Speakman said at a press conference. “This is symptomatic of this Minns Labor government. It is increasingly a chaotic government: the trains don’t run on time, the mental health system is in collapse, we’re getting major workplace compensation reforms at the 11th hour.

“We want a scheme that is sustainable, that is fair to workers, fair to business, but does not unduly punish the most severely injured workers.”

Making clear he would not support any rise to the whole-body impairment threshold, opposition Treasury spokesman Damien Tudehope said the ­Coalition would push the bill to an upper house inquiry if it did not get its amendments.

“There is not one member of the Coalition who does not support lower premiums for workers’ compensation. There are plenty of levers governments can use by way of amendment to the Workers Compensation Act to create downward pressure on those premiums,” he said.

“There are some workers who have an impairment which is so severe that they may not return to work. This bill would, in fact, ensure that most workers, even if they are substantially injured and have no prospect of returning to work, will be cut off from benefits.

“We are not prepared in those circumstances to wave through a bill which says to that worker ‘Your injury no longer ­exists’.”

A psychological injury inquiry in May heard only 27 individual claimants, about 1 per cent, were evaluated at a 31 per cent whole-body psychological compensation threshold and would remain on indefinite repayment plans under planned legislation.

NSW Premier Chris Minns. Picture: NewsWire/ Gaye Gerard

The workers’ compensation bill dominated question time on Tuesday, where Mr Minns said opposing the bill would thrash the Liberal’s reputation for being the party of small business.

“If any Liberal or National believes you can go to any Chamber of Commerce meeting for the next two years in the run-up to the next election without us (reminding you) what you’ve done, you can forget it,” he said.

“We will hang it around your neck.”

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 ongoing industrial disputes, the compensation bill seeks to overhaul an outdated system that has fuelled explosions in psychological injury claims, lawfare and employer costs.

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.

The last pre-budget sitting week began on Tuesday, with NSW Treasurer Daniel Mookhey hoping to pass the bill before July 1, ahead of his next budget to claw back millions in savings that would otherwise be allocated to psychological injury claims.

The bill includes an expedited eight-week claims assessment process for psychological injuries caused by bullying or harassment, clarifies language around “vicarious trauma”, introduces protections against lawyers who want to make expensive, unnecessary claims and adds “excessive work demands” as a new compensable cause of psychological injury.

The workers’ compensation bill was first tabled last week by Industrial Relations Minister Soph­ie Cotsis and is paired with a separate bill targeting workplace health and safety.

While each bill will need only to find two stray votes before it can be waved through the lower house, the Minns government must win the support of the ­Coalition, the crossbench or the Greens and a portion of the crossbench in order to pass the bill in the Legislative Council.

The Greens have made it clear they would not support a 31 per cent threshold.