NSW Labor wants to toughen laws it previously said were causing people to self-harm

NSW Treasurer Daniel Mookhey is proposing to toughen workers’ compensation laws he vowed to repeal before the last state election, despite previously describing them as “arbitrary” and warning they were leading people to self-harm.

Despite pushback from unions, medical experts and the legal fraternity, the government on Friday released the draft of its bill to overhaul workers’ compensation laws.

Labor’s Daniel Mookhey signed a pledge promising to overturn workers compensation rules before the last state poll.Credit: Sam Mooy

As previously reported in the Herald, the changes include requiring people who experience sexual harassment or racial vilification in the workplace to prove it to the Industrial Relations Commission before making a compensation claim, as well as doubling the psychological impairment threshold needed to access lump-sum payments.

But the draft bill also includes provisions making it harder for people with psychological injuries to access long-term medical treatment and benefits under the scheme.

Mookhey previously condemned the controversial section 39 provisions that cut most people off the system after five years as “deliberately transfer[ing] people onto welfare” and risking “self-harm”.

Under the proposed changes, people with psychological injuries would instead be cut off from benefits after a period of 2½ years, while medical treatment would cease after 3½ years.

The threshold for exemption from that rule would increase from a Whole Person Impairment rating of 20 per cent to 30 per cent.

The bill is only a draft, and will now be referred to a parliamentary inquiry before a final version will be introduced later this month. But the government says change is necessary because of the massive increase in psychological claims, and the pressure this is putting on the nominal insurer icare.

Psychological injuries have doubled over the past six years.

Before the 2023 election, 19 out of 22 current ministers signed a pledge circulated by Unions NSW vowing to cut section 39 and fight for a system that “provides ongoing medical and financial support for workers”.

Labor MPs pledging their support before the 2023 election.

They included Deputy Premier Prue Car and senior ministers John Graham, Penny Sharpe, Ryan Park and Mookhey, who posed for a photo signing the pledge just days before the poll.

The pledge was not signed in isolation. The Labor opposition and Mookhey were long-time critics of section 39 in parliament and during budget estimates.

In 2018, Mookhey labelled it an “arbitrary cutoff” for people who had been “substantially and permanently impaired” in their workplace. He also attacked the Coalition government for resisting Labor’s attempts to repeal the section despite revelations that 13 people had been flagged as at risk of self-harm when the cutoff first came into effect in 2017. Six of those people had died.

“What other policy have we ever implemented that we know leads to the risk of self-harm and we in this parliament have refused to do anything about it?” Mookhey said at the time.

A string of current Labor ministers, including Jenny Aitchison, David Harris and Jodie Harrison, as well as other backbench MPs also gave passionate speeches condemning section 39 and calling for its repeal.

Aitchison, the roads minister, called the rule “grossly unfair” and said changes were “imperative” due to deaths and incidents of self harm she said were “as a consequence” of section 39.

As Labor gears up for a fight over the changes, Unions NSW is increasing pressure on backbench MPs – many of whom also signed the pledge – to push back. On Thursday, the Herald reported about 20 had attended a caucus briefing organised by the union movement.

Mookhey on Friday said changes were needed to “ensure that NSW has a workers compensation system for future generations to rely upon”.

“The status quo is failing workers and it’s failing businesses,” he said.

If you or anyone you know needs help, call SANE on 1800 187 263 (and see sane.org), Lifeline on 13 11 14 (and see lifeline.org.au) or Beyond Blue on 1300 22 4636 (and see beyondblue.org.au).

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.