The whole union movement has united in condemnation of the NSW Government’s proposed changes to the workers’ compensation scheme.
Chris Minns and his Labor government attempted to rush a series of changes through Parliament that targeted the prevention of psychological injury claims, with minimal consultation or input from experts, workers or unions.
In response, Unions NSW organised a series of rallies across the state, with hundreds of members turning out to voice their concern and reject the proposed reforms.
The changes would “effectively shut down psychological injury claims for workers in this state”, Teachers Federation Deputy President Amber Flohm told the rally in Martin Place.
Under intense pressure, the NSW Government significantly amended the changes during the parliamentary inquiry this week.
They dropped the requirement for injured workers to present their cases in court, which would have forced victims of sexual assault and bullying to relive their trauma. And they announced initiatives to enhance prevention—such as $344 million in mental health support for workplaces and 50 new SafeWork inspectors.
They also pledged to expedite claim assessments within eight weeks, during which injured workers would receive 75 per cent partial pay, with backpay to 95 per cent of their income if successful. Work pressure and stress will continue to be recognised as legitimate causes of psychological injury.
But the government still plans to increase the threshold for whole person impairment for psychological injury sustained at work from 15 per cent to 30 per cent by July 2026, despite strong opposition from mental health professionals.
Dr Anthony Dinnen, a consultant psychiatrist, told the parliamentary inquiry that, “From my patients and my clinical experience over many years … an increase in threshold from 15 to 30 per cent would eliminate virtually every patient I’ve ever seen.”
Australian Association of Psychologists vice-president, Katrina Norris, said that even, “An impairment of 15 per cent requires an individual to be unable to function independently in almost all domains of life.”
The parliamentary inquiry heard that only 27 of the hundreds affected by psychological injuries each year would meet the new threshold for compensation.
Siding with business
NSW Treasurer Daniel Mookhey justified the changes by claiming the workers’ compensation scheme was unsustainable and in need of a radical overhaul.
He stated that iCare, the state’s insurance scheme, was financially unviable—citing that although over $6 billion had been injected into the scheme since 2018 it only had 85 per cent of the resources needed to pay injured workers. Consequently, Mookhey warned that businesses faced an increase in premiums.
The rationale for targeting psychologically injured workers was also made clear when Daniel Hunter, CEO of Business NSW, lamented that, “workers with psychological claims typically take 20 weeks off work, compared to six weeks for non-psychological injuries”.
Mookhey noted that only 50 per cent of workers suffering from psychological injury return to work within a year, compared to 95 per cent of those with physical injuries. This clearly reflects a prioritisation of productivity over workers’ wellbeing.
This comes at a time when psychological injuries are rising, particularly in public services. According to the NSW Nurses and Midwives’ Association (NSWNMA), there has been a 150 per cent increase in psychological injury claims by nurses and midwives. This number is expected to rise as understaffing worsens, with the Australian Institute of Health and Welfare predicting 123,000 unfilled nursing jobs by 2030.
Focusing on preventing burnout and stress through improved staffing and fostering positive working environments would offer a more sustainable approach—one that addresses the root causes of psychological injury instead of denying their existence.
But as NSWNMA Acting General Secretary Michael Whaites told the Martin Place protest, “Instead of preventing harm in the first place by ensuring reasonable workloads and putting in place support systems, the government is simply wiping its hands of injured nurses, midwives and carers.”
Broken promises
In March 2023, the Minns government came to power promising to reform the workers’ compensation scheme and iCare to better support injured workers. Annette Thorncroft of the Injured Workers Network told the union rally in Martin Place that, “There are 80 members in the NSW Parliament across both houses who signed a pledge to reform [workers’ compensation] because we approached every candidate across NSW and got them all to sign it.”
She said that while Premier Chris Minns gave verbal support, he refused to sign the pledge—unlike Treasurer Mookhey and Industrial Relations Minister Sophie Cotsis. But now the Labor government has abandoned its promises, along with the workers and union members who supported it.
As Mark Morey, Secretary of Unions NSW put it, “Cutting injured workers off is the most disgraceful way to fix anything, especially the workers’ comp system that was set up to look after injured workers.”
Labor has adopted a pro-business strategy targeting the most vulnerable—workers suffering from mental harm and abuse—while unravelling years of progress in normalising mental health in the workplace.
The focus on psychological injury over physical injury highlights a persistent disregard for the mental health consequences of alienation and overburdened workers in a capitalist system where productivity and profit are prioritised over workers’ lives and wellbeing.
By Mitchell Hickson
