‘Need a lie down’: NSW parliamentary inquiry erupts over Labor’s workers comp reforms

NSW’s nominal insurer is “plunging further into insolvency” by more than $6m a day the state’s Treasurer has revealed, as Labor’s controversial workers compensation reforms face another round of public inquiry. Treasurer Daniel Mookhey revealed during an heated parliamentary inquiry on Tuesday that icare was tipped to rise from a deficit of $4.9bn at the end of 2024 to $6bn on July 1 absent reform. “The nominal insurer is likely to hold $0.78 in assets for every dollar of future liability, meaning it is plunging further into insolvency at a faster rate,” Mr Mookhey said. “Or, to put it even more simply, the scheme is no longer going backwards by $5m per day, it is going backwards by more than $6m every day.” The state government’s plan to reform workers compensation in NSW hit a major hurdle earlier this month when a strange coalition of the Liberals, Greens and the independents joined together to force another public inquiry. The Liberals have proposed a number of amendments to the Bill, namely staying the lifting of the threshold of permanent whole person impairment (WPI) for psychological injury, and have called on the government to provide costings. After hours of hearings, sparks immediately flew over modelling for the amendments between opposition treasury spokesman Damien Tudehope and Mr Mookhey who said “the government is co-operating with this inquiry”. Mr Mookhey and Mr Tudehope clashed again over the WPI, which Labor proposes lifting to 30 per cent. The Opposition claims doing so would harm workers injured psychologically to such an extent they may never work again. NSW Treasury Secretary Michael Coutts-Trotter earlier told the committee there was a “well developed pathway” for those people who, once completing their 130 weeks of payments, would instead transition to the NDIS scheme. Labor claims the changes would not only help reduce the burden on the beleaguered state self-insurer, but would also allow injured workers access to lump sum payments should they wish, instead of remaining on compensation. It was over the WPI that Mr Mookhey faced his second heated argument, this time with Greens MLC Abigail Boyd who asked if he knew the change “would make us the harshest jurisdiction in Australia and one of the harshest in the world”. Mr Mookhey said he didn’t “accept the characterisation”. He claimed that at 130 weeks, 88 per cent of psychologically injured workers were back at work and accused Ms Boyd of being “deliberately misleading” in claiming it would cut off “90 something per cent of people” currently on the scheme. Consultant psychiatrist Dr Michael Epstein told the committee earlier on Tuesday afternoon that in comparison with other states, NSW’s lifting of the WPI to 30 per cent would make it the “harshest” in the country. “NSW is going to take the crown,” Dr Epstein said. Ms Boyd went on to summarise the evidence presented to the committee in three ways: she disputed the projected $2.5bn cost to the self-insurer, said there was “no imminent danger of scheme collapse”, and that the proposed WPI threshold was “unbearably cruel”. “I’ll just make the point, you’re entitled to vote against the legislation,” Mr Mookhey said in reply. Ms Boyd went on to accused Mr Mookhey of using “misleading language” in referring to payments made by the state government to the self-insurer as a “bail out”, and asked him to “admit you were wrong”. In response, Mr Mookhey said: “No”. Following the heated exchange, Ms Boyd said: “I think we need a bit of a lie down now”. A range of practising psychiatrists, insurance industry representatives and leaders from NSW Treasury and the nominal insurer, icare, gave evidence during the hours-long hearing on Tuesday. Mr Mookhey has warned the state self-insurer is tipped to cost the budget $2.6bn over the next five years, while premiums for the nominal insurer have already been set for eight-per-cent for the next financial year. Exactly how the state government will deliver savings through the scheme was under the spotlight during the hearing, with leaders from NSW Treasury and the nominal insurer grilled over costings for the proposed amendments. Largely, though, the numbers were not available. Asked about the government’s return to work strategy, Mr Coutts-Trotter said some 3500 people were on the scheme with a $60m saving, with Mr Tudehope asking: “Wouldn’t you give this program a chance to operate before you actually embarked upon removing benefits?”