Business NSW is urging swift action to reform the state’s workers’ compensation scheme, highlighting its unsustainable trajectory and the urgent need to protect businesses and workers in the New England North West (NENW) region.
The call comes as psychological injury claims have surged by 65 per cent since 2021-22, with over 11,000 claims recorded annually, according to the State Insurance Regulatory Authority (SIRA). The scheme’s deficit grew by $1.8 billion last year, equivalent to $5 million daily, driving up premiums and straining regional businesses.
“New England North West businesses, from hospitality to agriculture, are being hit hard by a workers’ compensation system that’s no longer fit for purpose,” said Ms Diane Gray, Business NSW Regional Director for New England North West.
“Local employers are seeing premiums skyrocket, even with strong safety records, because of a system that’s being misused to escalate workplace disputes. This hurts our workers, our businesses, and our regional economy.”
The NSW Government’s proposed reforms, announced by Treasurer Daniel Mookhey on March 18, include establishing a bullying and harassment jurisdiction within the NSW Industrial Relations Commission, defining ‘psychological injury’ and ‘reasonable management action’ for clarity, and adopting anti-fraud measures.
Business NSW has thrown their support behind the changes and is advocating for tighter oversight, including reinstating Section 11A of the Workers’ Compensation Act 1987 to exclude provisional payments for claims tied to reasonable performance management.
“Take a café in Tamworth or a retail store in Inverell, these businesses are grappling with claims that drag on for months, sometimes years, tying up resources and leaving workers disconnected from their jobs,” Ms Gray said.
“We need a system that supports genuine recovery, not one that escalates grievances or leaves businesses footing the bill for unsustainable claims.”
Local stories underscore the issue. One NENW business faced a psychological injury claim after a worker, undergoing performance management, claimed distress from routine feedback. The claim was upheld on appeal based on the worker’s perception, costing the business thousands in premiums and lost productivity. Another regional employer reported a worker claiming compensation for a support animal, with ongoing costs now exceeding $4,000 annually.
“These reforms are about fairness, protecting workers who need support while ensuring businesses aren’t penalised for doing the right thing,” Ms Gray added.
“In New England North West, where small businesses are the backbone of our communities, we can’t afford to let this scheme collapse under its own weight.”
Gray says Business NSW is committed to working with the NSW Government to ensure the workers’ compensation scheme is sustainable, fair, and affordable for the region’s employers and employees.
Something going on in your part of the New England people should know about? Let us know by emailing newsdesk@netimes.com.au