The bitter workers’ comp battle has one key sticking point. The NSW Libs are open to compromise

The NSW opposition is willing to negotiate over the most controversial part of the government’s workers’ compensation reforms, despite a scathing parliamentary report alleging the proposal leaves injured workers at risk of “self-harm and death by suicide”.

The move to lift the definition of “whole of person impairment” has become the key sticking point against Treasurer Daniel Mookhey’s attempt to reform the expensive workers’ compensation scheme, which has been bogged down for months by political opposition.

Several of the 13 findings and 12 recommendations handed down by the public accountability and works committee focused on the impact of the government’s proposal to lift the whole of person impairment (WPI) threshold, which determines the ability to access long-term medical payments, to 31 per cent.

Under the bill, workers would be cut off from regular compensation payments after 2½ years unless they can prove a whole-person impairment of at least 31 per cent.

Opposition treasury spokesman Damien Tudehope said the government’s decision to cut off the state’s sickest workers was akin to the Commonwealth finding cost savings measures in the NDIS by “taking away wheelchairs from quadriplegics”.

Tudehope left the door open for negotiation over lifting the WPI but insisted any increase needed to be “aligned to capacity for work”.

In October, Mookhey said the WPI was the issue “most separating us from the opposition” but said he would seek a “reasonable compromise”.

Mookhey has argued the reforms are necessary to address an increasingly unsustainable scheme where a doubling of psychological injury claims had placed unbearable pressures on the system’s financial viability.

State insurer icare manages the country’s largest workers’ compensation scheme, but is under financial pressure as the number of psychological injury claims have doubled in the past six years and return-to-work rates have fallen. Mookhey’s bill was designed to reduce premiums for employers, which were rising by an average of 8 per cent a year.

Tudehope called for Mookhey to defer the proposed 8 per cent premium hikes.

Big business has criticised the Liberal Party’s opposition to the reforms, but Tudehope claimed the top end of town had “been very easily seduced by the promise of lower premiums”.

The committee’s 65-page report took broad issue with the proposed legislation, saying the reforms were “unlikely to result in overall” savings.

“Leaving injured workers with serious mental health conditions without access to needed supports (as well as without ongoing income support), and with a sense of abandonment from being cut off from these supports by an uncaring government and parliament, carries a significant risk that some of these injured workers may engage in self-harm and death by suicide,” the report found.

The proposed lifting of the WPI would make NSW the nation’s most draconian jurisdiction, the committee found.

The committee concluded once the “cost-shifting onto the NDIS” and the state’s public mental health systems were accounted for, the reforms were “unlikely to result in overall cost savings for the NSW government or the economy as a whole”.

“The evidence we received from injured workers and their families brought a vastly different perspective to bear on the debate. It brought a ‘human’ perspective to this policy dialogue. Hearing firsthand from individuals within the scheme ‘brought to life’ questions about impact.”

The report’s second recommendation called on the government to withdraw the provision lifting the WPI, and for the upper house to oppose the measure if it was put forward.

Mookhey’s evidence during the inquiry came in for criticism. His claim workers with a permanent impairment below 30 per cent, that “by definition they have capacity to work”, was criticised by non-government committee members as “demonstrably false”.

The non-government members – Liberals Tudehope and Susan Carter, Greens MP Abigail Boyd and Independent Mark Latham – held a majority on the seven-person committee.

A dissenting statement released by government MPs Bob Nanva, Mark Buttigieg and Peter Primrose attacked the committee’s report as straying into political commentary, cherry-picking evidence, and inadequately considering the risks of amendments proposed by Latham and Tudehope.

“The ‘Tudehope/Latham’ amendments – while posing a significant risk to supports provided to workers that are exposed to a number of significant workplace harms – will demonstrably not deliver a financially sustainable system,” the trio concluded.

The bill’s exposure draft was roundly criticised by unions, The Greens, Liberals, psychologists and lawyers. The bill is expected to return for a vote in mid-November, but the government has faced the prospect that key elements of the bill will either be watered down or removed.

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