Dominic Perrottet turned workers comp into a basket case
Workers Comp was once a strong safety net for the injured at work. It has become a source of further harm for many injured workers, a parody of management incompetence and scandal and a millstone around the necks of taxpayers.
In 2015, when he was the New South Wales treasurer, Dominic Perrottet replaced the old WorkCover scheme with a new entity called icare.
A 2020 joint investigation of icare by the Sydney Morning Herald/ABC Four Corners uncovered “mismanagement of the state government-run scheme in NSW” and problems that led to “delays and denials of medical treatment, making some workers sicker and delaying their return to their jobs”.
The investigation also obtained government documents that revealed “as many as 52,000 injured workers in NSW have been underpaid up to $80 million dollars in compensation for loss of wages in one of the biggest underpayment scandals involving a government agency in the country”.
The return-to-work rate – a key industry indicator of how well a workers’ compensation scheme is working – significantly declined under the new system.
Despite icare’s appalling performance and mismanagement, salaries for executives soared. In 2020, it was reported that icare executives were the best paid in the public sector.
Before icare was formed in 2015, the two highest paid employees had an average salary of $305,000.
Five years later, there was a 22-fold increase in the number of executives – to 45 people who received an average of $300,000.
The salaries of the top seven executives averaged $660,000.
In November 2022, it was announced that icare CEO Richard Harding was getting a $247,000 pay rise to take his salary to over $1 million.
It has also been plagued by scandal. An $11 million contract was awarded to a small New Zealand company owned by the son of an icare consultant – who owned shares in the company.
The biggest losers from Dominic Perrottet’s botched restructure of workers comp have been injured workers.
A report in 2022 by the NSW Injured Workers’ Support Network revealed harrowing stories of acute mental stress among injured workers.
Most respondents to a survey said they experienced suicidal tendencies as a result of their experiences with the NSW workers’ compensation scheme.
Taxpayers and employers have also been big losers, with the NSW Treasury raising serious concerns about the financial sustainability of icare.
In June 2022, the government injected $1.9 billion into the fund with Treasury warning that icare would require billions more in additional funding.
Making injured workers’ lives harder
A survey by the NSW Injured Workers’ Support Network found that:
- 78 per cent of respondents had been unable to return to work
- nearly 80 per cent agreed that their experience with the scheme had negatively affected their mental health and wellbeing
- over 60 per cent said the experience with the scheme had negatively affected the mental health and wellbeing of their immediate family
- 73 per cent said they had experienced suicidal thoughts as a result of their claim.