“Reset” Hit After Coalition Agrees To Workers’ Compensation Scheme Changes

The Coalition has agreed to a slew of changes to the NSW workers’ compensation scheme after months of parliamentary stalemate.

The deal with the government will see legislation passed in the new year to freeze premiums for 18 months, saving employers facing no claims an expected 36 per cent over three years.

Newly-appointed opposition leader, Kellie Sloane, struck a deal with treasurer Daniel Mookhey in what she called a “reset” of negotiations.

“Frankly, we could not have a situation where … business, charities, the disability sector were going into Christmas wondering how they were going to pay increased premiums,” Sloan said.

“We have a Christmas present, if you like. No increased premiums for 18 months. That will settle a lot of anguish, a lot of concern about the viability of businesses across New South Wales.”

The deal means the government will be allowed to tighten eligibility for long-term compensation payments, without workers having to reach Labor’s previously planned higher threshold of 31 per cent “whole of person impairment”.

A parliamentary inquiry found that WPI threshold would have been impossible for many workers to meet, even if they were suffering serious psychological injuries.

Under the deal, the WPI will rise to 25 per cent next year while the state’s chief psychiatrist develops a new test for permanent psychological injury.

Mookhey said the breakthrough “allows us to stabilise the workers’ compensation system and return it to a secure footing”.

“The scheme has been in dire need of modernisation. It has been failing injured workers, employers, the non-profit sector and taxpayers for too long. Continuing to do nothing was not an option,” he said.

Flawed deal, but businesses will “stay open” 

Independent MP Alex Greenwich said the deal would come as a “massive relief” for the small businesses and community organisations that would have been hit with significant premium increases next year had the issue remained unsolved.

“Because of this agreement, many businesses will stay open, jobs will be protected, and vital community services will continue,” he said. “The Independent Members of the Legislative Assembly are proud of the collaborative role we played in reaching this outcome, and we thank both the government and opposition for coming to the table in good faith.

“Everyone wants a workers’ compensation system that protects injured workers, supports their safe return to work, and remains financially sustainable.”

However the deal has faced criticism from peak union body Unions NSW, with acting secretary, Thomas Costa saying the parliament had “taken a sledgehammer to the entitlements of traumatised and vulnerable workers.”

“Despite repeated evidence that a WPI of more than 21% means a worker has no capacity to work, the parliament looks set to raise the threshold for income support to 25%, before [reportedly] ratcheting up to 28% by 2029,” he said.

“It is counterintuitive to cut support while at the same time developing a new tool to diagnose the severity of injuries. Why wouldn’t you introduce the new diagnostic tool and then reassess?”