UnionsNSW has described any move to cut the state’s workers compensation premiums as a “race to the bottom” that won’t do anything to encourage people back to work.
Premier Barry O’Farrell says the scheme has to be overhauled to tackle a $4.1 billion deficit.
But unions fear the push to reform the WorkCover system is a smokescreen to slash workers’ entitlements and premiums.
Mr O’Farrell says premiums will rocket by 28 per cent if action is not taken to rein in the deficit, harming the state’s economy and costing jobs.
However, UnionsNSW Secretary Mark Lennon on Friday accused the government of exaggerating the financial difficulties facing WorkCover, to create a “sense of crisis”.
Appearing at a parliamentary inquiry into the WorkCover scheme, Mr Lennon advocated a modest increase in premiums over ten years to cover the blowout, saying cuts to premiums would be a “race to the bottom”.
He also questioned recommendations in a discussion paper to cut benefits and entitlements in an effort to encourage injured workers back to work.
Mr Lennon said the majority of workers wanted to return to work as soon as possible.
“We don’t believe that trying to incentivise people by dropping their payments is any effective way of trying to get people back to work,” he said.
The WorkCover issues paper, which is being examined by the parliamentary inquiry, suggests capping the duration of weekly payments and the introduction of a step-down from 100 per cent payments before the current 26 weeks.
Appearing at hearings in Sydney on Friday, the Insurance Council of Australia (ICA) said it supported in principle the 16 recommendations of the WorkCover discussion paper but said a detailed financial analysis should be undertaken of each proposal.
ICA Chair David Krawitz said that the majority of workers wanted to return to work as soon as possible, “but that cannot be said for all workers”.
Mr Krawitz complained that his members had ineffective powers to get those workers back into the workforce, and current incentives weren’t working.
NSW president of the Construction, Forestry, Mining and Energy Union, Rita Mallia dismissed business groups’ claims that WorkCover suffered from a “lump-sum culture” or “pot of gold mentality”.
Rather, injured construction workers suffered a loss of income when relying on compensation.
“Nobody wants to be on $413.50 a week. They want to get back to work, they want to earn the bucks they were earning before they left,” Ms Mallia told the inquiry.
“We’re talking about workers who earn in excess of $1500 to $2000 working six days week.
“There is no pot of gold when they’re stuck on compo.”
Jodie Wormleaton said since her construction worker husband David lost his leg the family was reliant on payments of just under $500 a week.
A full-time carer to her son with cerebral palsy, Ms Wormleaton said her family would be “out on the street” if the payments were cut.
“No amount of money they can give you can give you back the life that you had,” she told reporters outside parliament.
“It doesn’t give your leg back, it doesn’t replace the way things were the way before, but it might make life a little easier.”
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