Ministers in the current and former NSW governments have traded blows during a heated debate on controversial plans to reform workers compensation, which the union claims will abandon 95 per cent of psychologically injured workers.
A parliamentary inquiry into the proposed reforms will hear from a range of government, union, and business leaders on Friday morning, including the NSW Teachers Federation, the NSW Bar Association, and Unions NSW.
Unions NSW secretary Mark Morey, who will give evidence, said 95 per cent of workers with a permanent impairment from a psychological injury would not receive compensation due to the proposed 31 per cent threshold.
The new threshold for damages is part of a raft of proposed changes to overhaul the system and tighten claims for psychological injury, including requiring sufferers of racial, sexual harassment or bullying to obtain a court finding first.
NSW Treasurer Daniel Moohkey has used the draft to draw a line in the sand over payments to the Treasury Managed Fund, the government’s self-insurer, telling the committee he would not authorise further cash injections.
That is, not until parliament authorises legal reforms.
While described by former One Nation MLC Mark Latham as “ballsy” in the “approach of threatening the parliament”, the statement also drew questions about whether the reform was about prevention or the fiscal “bottom line”.
Liberal MLC Damien Tudehope, who traded blows with both Mr Moohkey and Industrial Relations Minister Sophie Cotsis, asked the Treasurer: “Is that your belief that this solves a financial problem, or does it solve workers getting injured?”
NSW Industrial Relations Minister Sophie Cotsis said there was ‘no doubt mental health is a societal issue’. Picture: NewsWire / Nikki Short
Mr Mookhey’s answer of “both” drew more questions about the “bottom line”.
He said the state government had borrowed $6.1bn since 2018 so the TMF’s assets equalled its liabilities – money he claimed was “coming at the expense of schools, hospitals or kids in need of out-of-home care”.
Mr Mookhey said the current compensation system was not equipped to handle more complex psychological issues, and that the time for prevention to make meaningful fiscal change had passed.
“We accept the fact that these are hard changes,” he said.
“I’m here to say to the parliament – doing nothing is not an option.
“Doing nothing is to lock in a system we know is failing. Doing nothing is to condemn even more workers to a system that’s not succeeding, and to ask businesses to pay more and more, knowing full well that those resources are not being well expended.
“The broader change that NSW needs to make is to break this set-and-forget mentality, which means that we ignore these problems for 10 years … and then we have to change it rapidly”.
Mr Moohkey said no reform would run the risk of the entire system collapsing.
Earlier, Ms Cotsis told the committee in her opening address that there was “no doubt mental health is a societal issue”.
“But, the increase in psychological claims would indicate that the system has become a place where industrial relations and general health issues are being managed through a system that was designed to support those injured at work, to recover, and to return to work.”
Treasurer Daniel Mookhey said the upcoming state budget would report a $2.6bn writedown arising from the government’s self-insurer. Picture: NewsWire/ Gaye Gerard
The inquiry was told claims for psychological injury had doubled in just six years, 91 per cent of physical injury claims resolved within 13 weeks, while 50 per cent of psychological claims were not resolved after a year.
Ms Cotsis said there were 3068 NSW public sector workers on workers compensation claims awaiting returning to work.
“Now this is unacceptable because these public sector workers have capacity to work, but the system has these artificial barriers that doesn’t allow them to get back into the system,” she told the inquiry.
Treasurer Daniel Mookhey told the hearing the upcoming state budget would report a $2.6bn writedown arising from the Treasury Managed Fund, the government’s self-insurer.
“As the TMF continues to deteriorate, the pressure for cash injections grows,” Mr Mookhey said.
“Since I became treasurer, the government has authorised an additional $1.2bn in cash injections to keep the public insurer fully funded.”
Since 2018, the state government has borrowed $6.1bn so that the TMF’s assets equalled its liabilities.
“I will not be authorising any further injections,” Mr Mookhey said.
“Not until parliament decides its collective response to a scheme that most acknowledge is failing.
“Not when that money is coming at the expense of schools, hospitals or kids in need of out-of-home care.
“That choice is clear for me.”
Opponents of the changes have accused the government of attempting to rush through the amendments, with the Law Society of NSW calling for a “pause” so that broader consultation and key changes to legislation can be enacted.
President Jennifer Bell said on Thursday that while the system was under pressure and in need of reform, the 31 per cent threshold would exclude “nearly all workers with psychological injury” from being able to make a claim.
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