Business NSW backs workers’ compensation reform

Business NSW Central Coast is backing reform to fix the growing concern among local businesses on the rising costs and operational challenges associated with the state’s workers’ compensation scheme, alongside ongoing pressures from increasing insurance premiums.

Regional Director of Business NSW Central Coast Scott Goold said while businesses fully supported the right of injured workers to receive care and fair compensation, the current system was increasingly unsustainable.

“Workers’ compensation is a critical safety net, but the system in its current form is placing an unreasonable burden on employers,” Goold said.

“Last year, the scheme recorded a $1.8B deficit — equivalent to around $5M every day.

“This is not a sustainable model and places upward pressure on premiums that local businesses are already struggling to manage.”

Psychological injury claims have risen by 65% since 2021/22, now exceeding 11,000 claims annually across NSW.

Business NSW has heard from numerous members that the system is sometimes being used to escalate workplace grievances and performance matters into compensation claims, prolonging absences from work and increasing business costs.

“This is particularly challenging for small and medium businesses on the Central Coast, where covering the costs of prolonged claims and higher premiums can threaten business viability and job security,” Goold said.

He said insurance premiums remained a major financial concern.

Goold said Business NSW’s recent Business Conditions Survey found that 86% of Central Coast businesses had faced double-digit insurance premium increases, with some forced to reduce coverage or consider operating without insurance—an outcome no business wanted.

“Businesses are committed to creating safe, supportive workplaces, but they need a compensation and insurance framework that is fair, transparent, and financially sustainable,” he said.

“We welcome the NSW Government’s recognition of the need for workers’ compensation reform and urge progress on changes that will support both employees and employers.

“Reform of the Emergency Services Levy, which currently adds more than 20% to business insurance premiums, must also remain a priority.”

Goold said Business NSW would continue to engage with policymakers to ensure that the voices of local businesses were heard as these critical issues are addressed.