Failure to reform NSW workers’ compensation could ‘shut down 1 in 5 businesses’

The debate of what needs to be done to address the NSW workers’ compensation scheme rages on, with one business group claiming a lack of reforms could cripple businesses across the state.

The NSW workers’ compensation scheme has been under a microscope since Treasurer Daniel Mookhey initially proposed reforms to the scheme back in March.

The NSW government claimed that the proposed reforms sought to address rising costs, with the main policy proposal being to raise the “whole person impairment” (WPI) from 15 per cent to 31 per cent.

Last week, the NSW government tabled its updated reforms in Parliament, which it hopes can ensure workers and employers have a scheme “they can rely on”.

“We are creating a modern system that will better protect workers from psychological injury and provide better help when they need it,” said Mookhey.

“I want to ensure that future generations of workers across NSW have workers’ compensation they can rely on.”

According to Business NSW chief executive Daniel Hunter, amid premium increases, if the NSW workers’ compensation does not undergo reforms – one in five businesses will be forced to “shut down”.

“One in five businesses have told Business NSW that they would be forced to shut if subject to the sort of premium increases we are likely to see if there is no reform,” said Hunter.

“That should sound alarm bells across both sides of the political aisle. One western Sydney manufacturer told us this week they’d relocate the bulk of their workforce to their Queensland and Victorian sites if premiums increase by 36 per cent or more.”

“There needs to be a bi-partisan support for a solution to this problem, and it must be done soon. Without it, thousands of family-run businesses will simply not survive.”

“We are asking both the state government and the opposition to work together to ensure the proposed reforms pass through NSW Parliament in the coming week to keep NSW as the best place to start or grow a business.”

Despite Hunter’s claims, the Law Society of NSW wrote yesterday (2 June) to both the opposition and the Greens NSW in the Legislative Council, claiming that the bill “will have significant and unnecessary impacts not only liability and entitlements in relation to psychological injuries but also the operation and processes of the wider workers’ compensation scheme”.

The Law Society of NSW also described the inquiry process as “unusually truncated”, adding to other claims that the reform process was extremely rushed.

This was reinforced by the NSW Bar Association, which claimed that the standing committee on law and justice – which oversaw the reforms – was put “in an impossible situation” as it was required to produce a report on complex reforms with “no time properly to consider the implications for millions of workers in NSW”.

“The time frame did not permit the committee to undertake detailed examination and analysis of the volume of evidence, let alone prepare thorough and considered commentary, findings and recommendations,” said the committee chair, the Honourable Greg Donnelly MLC.