NSW Premier Chris Minns stares down unions and Libs in fight to fix broken workers compo scheme

Chris Minns will stare down opposition from unions and move this week to push through generational reforms of the costly NSW workers compensation system, as he ramped-up pressure on the Liberals.

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

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NSW Premier Chris Minns will stare down opposition from ­unions and move this week to push through generational reforms of the state’s costly workers’ compensation system, as he ramped up pressure on Mark Speakman’s Liberal Party for abandoning small business.

The NSW Premier – who has faced strong resistance from union leaders over Labor’s shake-up of the workers’ compensation scheme – is overhauling an outdated system that has fuelled explosions in psychological injury claims, lawfare and employer costs.

With MPs returning to the NSW parliament on Tuesday for the last sitting week before the budget in late June, Mr Minns is pressing to pass legislation before July 1 amid warnings that without changes workers’ compensation premiums will increase by up to 36 per cent.

After successive governments spent more than $6bn topping up the ballooning workers’ compensation scheme, the Minns government determined the system was on the brink of collapse and that doing nothing wasn’t an option.

In a major intervention on the eve of a legislative tussle with the Coalition, Mr Minns told The Australian that his government’s reforms would “help protect small businesses”.

“What’s the point of the Liberal Party if they won’t protect small businesses? We’re in a cost-of-living crisis and small business face the prospect of a 36 per cent increase in workers’ compensation premiums,” Mr Minns said.

“This is a historic opportunity for the NSW parliament and all parties to unite to reform and bring our workers’ compensation system into the 21st century.”

If the bill passes the parliament this week, NSW Treasurer Daniel Mookhey would be able to bank millions of dollars in savings in his budget later this month.

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 are backing the Minns government bill to create a sustainable and fairer system.

BCA chief executive Bran Black, who represents Australia’s biggest employers, said “fixing the NSW workers’ compensation scheme isn’t just a ‘nice to have’ – it’s critical for businesses right across the state”.

“We support reform to make the system more sustainable and address rising premiums. Reform is essential if we’re to have a system that can sustainably provide important support to workers for decades to come,” he said.

Mr Speakman, who is under pressure from business to back the reforms, has described Labor’s legislation as “hastily produced” and “complex”.

After a shadow cabinet meeting was convened on Monday to consider the bill, the Opposition Leader’s spokesman said “the ­Coalition’s position will be finalised in the joint partyroom” on Tuesday morning.

Business NSW said without the reforms, one in five businesses could be forced to shut and employers would likely slash headcounts, scale back operations, stall expansion plans and shift ­interstate.

The key gripe for union leaders, who won a raft of major concessions in the final legislation, is the plan to gradually increase the “whole person impairment” threshold to 25 per cent from ­October this year and greater than 30 per cent from mid-2026.

Unions NSW secretary Mark Morey on Monday said “parliament must delay passage of these laws to properly assess the devastating impact of the 31 per cent threshold increase”.

“The government’s own parliamentary inquiry heard that this change would exclude virtually every patient experienced psychiatrists have treated, yet MPs have had no time to understand the human consequences of abandoning 99 per cent of psychologically injured workers,” he said.

“Parliament cannot responsibly vote on legislation that will cut support for hundreds of injured workers each year without proper scrutiny of who will be left behind and what happens to them.”

The Minns government, which is bankrolling a $344m workplace mental health package and more than 50 new workplace inspectors, has reported that return to work rates under the current scheme are lower for psychological injury (51 per cent) compared to physical injury (95 per cent).

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, are facing a 36 per cent hike in workers’ compensation premiums.

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 and unnecessary claims and adds “excessive work demands” as a new compensable cause of psychological injury.