The NSW government has warned derailing its overhaul of workplace mental injury laws will lead to higher premiums, as an upper house committee holds a hearing on the proposed changes. 

“Providers who care for some of our most vulnerable citizens are telling us they can’t keep going under the strain of this broken system,” Treasurer Daniel Mookhey said today.

“Every day that reform is delayed, the system is only deteriorating further. The sooner we enact reform, the sooner we can get on with preventing psychological injuries in the workplace, rather than simply compensating for injuries which could have been avoided.”

The government says every day its reforms are blocked, the private sector workers’ compensation scheme goes backwards by $6 million, and that 340,000 businesses will suffer a 36% increase in premiums over the next three years even if they have no claims against them.

The Public Accountability and Works Committee’s public hearing tomorrow will feature representatives from the insurance industry, NSW state insurer icare and State Insurance Regulatory Authority CEO Mandy Young.

Critics of the planned reforms say changes to a threshold used for assessing mental injury benefits will exclude almost all workers with psychological impairments.

A government bill passed the state parliament’s lower house but was blocked in the upper chambers, which referred it to the committee for an inquiry.

SIRA says the NSW workers’ compensation program’s performance is driven by the nominal insurer scheme for private sector workers.

The nominal insurer scheme accounted for about 65% of reported claims in the year to June 2024, the regulator says in a submission the committee.