The release of the report of the Public Accountability and Works Committee, entitled 'Workers Compensation Legislation Amendment Bill 2025 and Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025'
My Summary
Report No. 5 (November 2025) – NSW Legislative Council Public Accountability and Works Committee
Inquiry into the Workers Compensation Legislation Amendment Bill 2025 and the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025
Overview
The NSW Legislative Council’s Public Accountability and Works Committee (PAWC) conducted an inquiry into the Government’s proposed reforms to the workers compensation system. The inquiry examined the likely effects of the two bills on injured workers, employers, and the sustainability of the scheme. Over 250 submissions were received and three public hearings were held between June and October 2025. The report, tabled in November 2025, reveals a deeply divided picture: on one hand, a system already struggling with poor outcomes and management inefficiencies; on the other, proposed reforms that would worsen inequities, particularly for psychologically injured workers.
1. Voices of Injured Workers
The Committee centred the lived experience of injured workers as the most compelling and credible evidence in the inquiry. Submissions detailed systemic failures, adversarial claim handling, and long-term psychological harm. Workers described being 'broken by the system rather than supported by it.' The report commends the compassion shown by the inquiry secretariat in supporting workers to share evidence safely.
2. Discriminatory Nature of the Proposed Reforms
A central focus of the report is the proposal to lift the Whole Person Impairment (WPI) threshold for psychological injury from 15% to 30%. The Committee found this measure discriminatory, unsupported by data, and dangerous to worker wellbeing. It concluded that the majority of workers with 21–30% impairment are not fit for work, contradicting government assertions.
3. Financial Misrepresentation and Political Accountability
The Committee accuses the NSW Government, and Treasurer Daniel Mookhey, of manipulating financial data and public messaging to justify austerity measures. It found that iCare’s internal data and the Treasury’s representations exaggerated the system’s fiscal risks while ignoring rising administrative costs and poor performance among Claims Service Providers (CSPs).
4. Systemic Failures in Claims Management and Oversight
The report documents ongoing inefficiencies, high administrative costs, and declining return-to-work rates across the iCare-managed Nominal Insurer. Despite years of reviews and consultant reports, Claims Service Providers continue to earn rising fees while outcomes worsen.
5. Ethical and Legislative Integrity
The report condemns what it describes as moral and political hypocrisy within the Minns–Mookhey Government. It notes that several ministers had previously signed a 2023 pledge to repeal Section 39 and restore injured worker rights yet the proposed bills deepen those cuts.
Key Recommendations (Extract)
1. Reject or defer the bills pending proper consultation with injured workers and experts.
2. Reform premium and incentive structures to promote workplace safety and timely return-to-work outcomes.
3. Strengthen oversight of iCare and Claims Service Providers.
4. Maintain access to treatment and income support beyond 2.5 years for workers between 21–30% WPI.
5. Enhance whistleblower protections and parliamentary scrutiny of financial and policy decisions.
Dissenting Statement – Comrades are Politically Obliged to Dissent
Labor Committee members Bob Nanva, Mark Buttigieg, and Peter Primrose dissented, alleging that the report was politically biased and failed to consider evidence of the scheme’s financial unsustainability. They warned that the asset-to-liability ratio could fall below 80%, requiring reform to preserve future viability. However, they acknowledged the system’s current shortcomings and poor worker experience.
Conclusion
The PAWC’s Report No. 5 delivers one of the most damning assessments of NSW’s workers compensation framework in a decade. It concludes that:
- The proposed reforms are ethically indefensible and economically unsound.
- The system’s crisis stems from iCare’s mismanagement, not injured workers.
- The government’s current approach risks further social, economic, and human harm.
The Committee calls for the bills to be withdrawn or rewritten following genuine consultation and independent review.