NSW workers comp benefits to be cut

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NSW workers comp benefits to be cut

The NSW Government has announced via the media that it will ‘slash’ workers compensation benefits to rein in the WorkCover Scheme’s $4b deficit.

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The reforms have been described as an ‘attack on sick and injured workers’ by unions, but the business community believes they will deliver fairer outcomes for employers and employees. 
 
According to the Daily Telegraph, Premier Barry O’Farrell will today signal a ‘massive overhaul’ of workers compensation laws to reign in the deficit and reduce the state’s premiums, which are double the rate in Victoria.  
 
Reforms restrict access to generous provisions 
 
The newspaper indicated that reforms could include restricting weekly payments to injured workers, and will also likely target generous provisions for the payment of injured workers’ medical benefits, with time limits on those with less serious injuries.
 
O’Farrell is expected to make a speech today, in which he explains that premiums will rise even higher and employers will stop hiring staff unless the system is reformed. 
 
Unions NSW secretary Mark Lennon criticised the government for initially indicating that it was prepared to consult stakeholders, but then ‘jumping the gun’ by announcing the changes through the media.
 
‘A failure to consult stakeholders’
 
‘Today’s report comes despite the State Government indicating it would establish a committee of employer, union and Government representatives to examine the Workers Compensation system,’ he said.
 
‘Making drastic changes to workers compensation without consulting unions, employers and other community groups is a recipe for disaster.’
 
Lennon said that the government had ‘pulled the rug’ from under sick and injured workers.
 
‘Sick and injured workers are in a vulnerable position through no fault of their own,’ he said.
 
‘They do not deserve to be abandoned by the State Government. The test of any society is how its looks after its’ most vulnerable. It looks like this State Government will fail that test.’
 
‘The Government needs to slow down, canvass all options and halt the attack on sick and injured workers.’
 
‘A far more cost effective approach’ 
 
Meanwhile, the state’s leading business organisation has thrown its support behind the measures flagged in the Daily Telegraph. 
 
According to NSW Business Chamber CEO Stephen Cartwright, the reforms are designed to make WorkCover more competitive and financially sustainable, and to bring it in line with other state regimes that are ‘far more cost effective’.
 
‘We know that businesses across NSW see the cost of workers’ compensation premiums as one of their key concerns,’ he said.
 
‘The NSW Business Chamber’s most recent Business Conditions Survey shows that times are tough for businesses in NSW and they are worried about the cost of doing business.’ 
 
‘WorkCover premiums are a significant cost for business and any steps the Government can take to reduce the burden can only help the business community in this continuing period of economic uncertainty.’
 
‘The economy is being held back’ 
 
Cartwright said that it is in the interests of both employers and employees to have a workers compensation scheme that is fair and financially sustainable and comparable with those in surrounding states. 
 
‘We don’t have that with the current scheme,’ he said. 
 
‘A $4 billion blow out in the WorkCover scheme is evidence that the current approach is unstainable and that action needs to be taken to rein in costs and deliver fair and realistic support to people injured in the workplace.’ 
 
‘The competitive advantage of the NSW economy is being held back by a workers’ compensation system that can’t balance its books and is placing yet another heavy financial burden on NSW employers.’
 
Mr Cartwright said New Sout Wales’ high WorkCover premiums along with the higher payroll tax rate are the two main barriers to economic growth in the state.

 

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