A new report by Business NSW calls for action on workers compensation

NSW’s workers compensation scheme has failed injured workers, stifled businesses and needs a major overhaul, a new report by Business NSW reveals. 

The Fixing the NSW Workers Compensation Scheme report, released by Business NSW, identifies problems in the system and key reforms needed to get it back on track. 

The report from the state’s peak business body follows a year-long investigation into how to make the system better for employers and workers. Almost 150 businesses participated in the research. 

Business NSW CEO Daniel Hunter said: “Hiking premiums and decreasing benefits is not the solution to fix the ailing scheme”. 

“While BNSW and its members commend the NSW Government for pushing back on icare’s eyewatering proposal for a 22% average premium increase – instead opting for 8% – more needs to be done,” Mr Hunter said. 

“We would like to see the NSW Government commit to important actions in three areas: injury and claims management, statutory safeguards and the scheme’s fitness for purpose. 

“The unsustainability of the NSW workers compensation scheme threatens to either send more businesses fleeing to more favourable scheme states like Queensland or, worse still, close them permanently. 

“A do-nothing scenario could also lead to the regulator considering cutting benefits for injured workers. 

“There must also be greater stakeholder oversight of the scheme to ensure the best outcomes for employers and their workers.” 

Revealing how compromised the system is, regulator SIRA reports that only 65 per cent of workers return to work four weeks post-injury, compared to more than 75 per cent in 2015. 

 “It is critical for the state’s economic wellbeing and injured workers that the scheme is sustainable and works for employers and employees,” Mr Hunter said. 

NIBA had written to the Minister for Industrial Relations and Work Health and Safety Sophie Cotsis back in June, citing serious concerns about the ongoing affordability of workers compensation insurance for NSW employers.  

The way in which some employers have been reclassified by icare increased their actual premium well above the quoted average of 8%, with some premium increases reaching as high as 30%. This doesn’t take into consideration wage increases, which also have an inflationary effect on premiums.  

In response to concerns raised by the industry and the business sector, the NSW Government announced back in June that it will focus on improving workers compensation governance by appointing an employer and employee nominee to the icare Board.    

New Board announcements seem imminent now that legislation to amend the governance structure of icare has passed. 

The Minister will appoint employer and employee body representatives to the icare Board in the first step in the reform of icare’s governance. 

The new report by Business NSW lists a series of reform recommendations that will need to be enacted for the NSW Workers Compensation Scheme to be sustainable.  

The report recommendations include:  

• Refining programs to help employers who are, for good reason, unable to provide their injured worker with suitable duties;  

• Increasing stakeholder oversight; and  

• Improving the level of information and guidance for employers and workers to make it easier to access support and review services.  

You can read the full report by Business NSW here.