Injured workers v public transport: The stark disparity in NSW’s funding priorities

One expert has made a contrast between the funding priorities of the NSW government, highlighting the disparity between essential infrastructure and injured workers.

A reflection on the treatment of injured workers, by author and healthcare expert Richard Hoskins, has drawn two contrasting pictures of the priorities of the NSW government in terms of the disparities in their funding for essential infrastructure and injured workers.

Hoskins argues that although both workers’ compensation schemes and public transportation systems such as Sydney Trains run at a financial loss, only one receives generous funding, highlighting both societal and governmental priorities.

“In New South Wales (NSW), injured workers often feel marginalised within the workers’ compensation system. While both workers’ compensation schemes and public transportation systems like Sydney Trains may operate at a loss, the approach to managing these losses differs significantly due to their distinct roles and funding mechanisms,” said Hoskins.

“Workers’ compensation schemes face pressures to remain financially sustainable, often leading to cuts in benefits and reduced care for injured workers. In contrast, public transportation is viewed as essential infrastructure, warranting continued investment and government subsidies to support broader economic and social goals.”

Hoskins laid out the differences in approach between the two systems and how they recover from financial losses, arguing that it presents a systemic issue that often overlooks the livelihoods of injured workers.

Workers’ compensation

1. Financial sustainability: Workers’ compensation schemes are often under pressure to remain financially sustainable. When these schemes run at a loss, governments and insurers may cut benefits or reduce care to manage costs and ensure the long-term viability of the system. This financial pressure often results in injured workers receiving subpar care and benefits, further exacerbating their plight.
2. Private insurers: Many workers’ compensation schemes involve private insurers who are driven by profit motives. These insurers may implement cost-cutting measures to maintain profitability, which can result in reduced care for injured workers. The focus on profitability can overshadow the needs of the injured workers, treating them as mere financial liabilities rather than individuals needing support and rehabilitation.
3. Public perception and political pressure: There is often significant political and public pressure to reduce government spending on compensation schemes, especially during economic downturns. This pressure can lead to cuts in benefits and services for injured workers, making them feel neglected and undervalued.
4. Harmful reforms: The 2012–13 reforms to the workers’ compensation system in NSW have had significant and often detrimental impacts on injured workers, a fact acknowledged by both sides of politics. These reforms aimed to restore the financial sustainability of the scheme but led to substantial cuts in benefits and services. Reduction in medical and related expenses, stricter criteria for accessing compensation, and increased disputes and appeals have further harmed injured workers.
5. Transitional wages: Transitional wages for injured workers can result in reduced pay well below their average weekly earnings, causing financial strain. The implementation of transitional arrangements often leads to significant income reductions during the transition period, making it difficult for injured workers to support themselves and their families.

In comparison, public transportation systems like Sydney Trains have ample funding at their disposal, a luxury that Hoskins argues is not afforded to injured workers across NSW.

Sydney Trains

1. Public service mandate: Sydney Trains operates as a public service, prioritising accessibility and reliability over profitability. The government views public transportation as essential infrastructure that supports economic activity and reduces traffic congestion, justifying continued investment and subsidies even when the system operates at a loss.
2. Government subsidies: Sydney Trains receives substantial funding from the NSW government to cover operational costs and capital investments. This funding is seen as an investment in public infrastructure, which can have long-term economic benefits, highlighting a stark contrast to the funding and support injured workers receive.
3. Expansion and modernisation: Investments in expanding and modernising the rail network are often justified by the need to accommodate a growing population and improve service quality. These projects are seen as crucial for the future development of the city, reflecting a commitment to long-term growth and improvement, unlike the treatment of injured workers in the compensation system.
4. Economic and social benefits: Public transportation provides significant economic and social benefits, including reduced traffic congestion, lower emissions, and improved accessibility for all citizens. These benefits justify continued investment despite financial losses, a luxury not afforded to workers’ compensation schemes.

These contrasting approaches to the financial management of the differing systems pinpoint a clear priority imbalance. Cost-cutting measures that are put forward towards workers’ compensation schemes only worsen the ongoing issues that a number of injured workers across NSW face.

Physical injuries can immobilise workers for an extended period, while mental health conditions also accounted for 10.5 per cent or 14,600 of serious compensation claims in 2022–23. This accumulated to a 19.2 per cent increase in 2021–22 and a 97.3 per cent increase compared with 10 years ago.

Workers’ compensation is a lifeline for employees who are experiencing either physical or mental injuries that keep them out of their jobs. Hoskins concluded by calling on regulators like the State Insurance Regulatory Authority (SIRA) and iCare to step up and address the disparities he claims are prevalent.

“The disparity in how financial losses are managed between public transportation and workers’ compensation schemes in NSW highlights a systemic issue. While Sydney Trains receives continued investment due to its perceived essential role, injured workers are often left to navigate a system focused on cost-cutting and profitability,” said Hoskins.

“It’s crucial for regulators like SIRA and iCare to lift their game, ensuring fair treatment and adequate support for injured workers who deserve to be treated with dignity and respect.”