Failing workers comp scheme to leave budget $2.6bn worse off
Treasurer Daniel Mookhey threatens to stop top-up payments to government insurer unless parliament agrees on reform.
NSW
Don't miss out on the headlines from NSW. Followed categories will be added to My News.
Treasurer Daniel Mookhey will refuse to bail out the state insurance scheme covering more than 400,000 workers unless parliament agrees to reform a workers compensation system that is losing money hand-over-fist.
The Daily Telegraph can reveal next month’s budget will be $2.6 billion worse-off due to the insurance scheme paying out more money than it raises.
In an extraordinary threat, Mr Mookhey will tell a parliamentary inquiry he will not top up the insurance scheme covering public sector workers unless parliament agrees to crack down on psychological injury claims.
That could leave more than 400,000 workers without full insurance coverage for workplace injuries.
The Minns government has already tipped $1.2 billion into the Treasury Managed Fund to ensure the insurer has enough money to pay out the claims it expects to make.
“I will not be authorising any further injections, not until parliament decides its collective response to a scheme that most acknowledge is failing, (and) not when that money is coming at the expense of schools, hospitals, or kids in need of out-of-home care,” Mr Mookhey will tell a parliamentary inquiry.
A one-day inquiry will on Friday probe proposed reforms to workers compensation which will make it harder for employees to make claims for injuries like stress, bullying, and burnout.
The Minns government is also proposing to cut off payments for psychological injuries after two-and-a-half years unless an injured worker can prove they will be significantly impaired for life, and enshrine “reasonable management practices” into law.
The proposed reforms have sparked an all-out assault from the labour movement, with Unions NSW launching a $400,000 advertising blitz opposing the changes.
Unions NSW boss Mark Morey said the proposed reform would prevent frontline workers from getting compensation for trauma experienced on the job.
But Mr Mookhey will tell the parliamentary inquiry the insurance scheme covering workplace injuries risks collapsing unless it is overhauled.
“I regret to inform you that as of December 31, the scheme is only holding 82 cents in assets for every $1 it expects in future claims,” he is expected to say.
“Fast deterioration has real implications for sustainability of the scheme: workers get less, (and) businesses pay more.”
“Put simply, you can have the best workers compensation scheme in the world on paper (but) if it has no money, it helps no one.”
Mr Morey conceded on Thursday the current scheme was “unsustainable”, but said the government should not be cracking down on mental health claims in order to fix a budget black hole.
Opposition Leader Mark Speakman said the Coalition had not formed a view on the legislation, criticising the government for trying to legislate changes by July 1.
“We recognise the need to rein in workers compensation premiums but will determine a precise position in the joint party room after we see the results of the inquiry,” he said.
More Coverage
Originally published as Failing workers comp scheme to leave budget $2.6bn worse off
Fed funding letting the NSW health system down, inquiry finds
Elderly patients are languishing in hospital departments for months due to the federal government’s failure to fund the aged care sector, an inquiry into health spending has found. Here’s what you should know.
Read more
Newington College’s five hour fight over 19th century dictionaries
Old boys and their allies in opposing coeducation at one of Sydney’s most expensive private schools have finally had their day in the NSW Supreme Court. Here’s how it unfolded.
Read more