Senior icare managers axed in shake-up of troubled insurer

The troubled NSW workers’ compensation insurer, icare, has axed almost 27 per cent of its senior employees in a major cost-saving exercise ordered by the Minns government amid consternation at the agency’s bloated wages bill.

Last year the government tasked NSW Treasury with reviewing icare’s expenditure after the insurer required an urgent top-up of $669 million to continue paying injured frontline public servants.

NSW Industrial Relations Minister Sophie Cotsis.Credit: Bianca De Marchi

The review followed a string of examples of questionable spending, including an $18 million contract that was awarded to an ASX-listed marketing group with extensive links to the NSW Liberal Party by icare’s previous board and management.

The review made 14 findings to improve the insurer’s expenditure, but it also identified significant increases in wage costs across the agency. Between 2018 and 2023, the size of icare’s workforce had almost doubled from 880 to 1718. In the same five years, staff costs ballooned from $123.3 million to $289 million per year.

Earlier this year its former chief executive, Richard Harding, who was the state’s highest-paid public servant with a salary of more than $1 million, quit the role.

The government this week introduced a bill to parliament it says will help to increase transparency over icare’s spending. It includes changes which mean the agency’s chief executive will no longer sit on the board of directors, as well as requiring the Minister for Industrial Relations Sophie Cotsis to approve the appointment of a new chief executive.

The Herald can also reveal that Treasury’s review has led to an exodus of senior staff at icare, with the number of managers and executives reduced from 66 to 48. It has contributed to some $23 million in savings across the agency, which have come from a broader shake-up to reduce duplication. The savings are not related to payouts for insurance claims, meaning they do not impact injured workers.

The agency has been beset by scandal since it was established in 2015. A joint Herald and ABC Four Corners investigation in 2020 uncovered deteriorating return-to-work rates and the underpayment of thousands of injured workers.

NSW Labor was highly critical of icare in opposition, with now-Treasurer Daniel Mookhey blaming former premier Dominic Perrottet, who oversaw the scheme’s setting-up when treasurer in 2015, for the ongoing problems besetting the agency.

Earlier this year Labor passed new legislation to appoint worker and business representatives on the icare board, and named Unions NSW Secretary Mark Morey as one of its appointees. Cotsis said the latest changes would provide “a road map to drive greater transparency, accountability and focus on operational efficiency across icare and the state’s insurance system”.

“It’s a necessary step to restore confidence in icare, and part of the government’s commitment for a financially sustainable insurance and care system with better outcomes for injured workers, employers and other policyholders,” she said.

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