The number of businesses forced to scale back operations because of spiralling workers’ compensation premiums has jumped 10% in six months.  

Cutting staff, halting expansion plans and closing down are other likely measures for business owners, according a survey of almost 700 of the state’s SMEs.

As NSW Parliament prepares to debate workers’ compensation legislation this week, new data reveals a sharp increase in workers compensation premiums is expected to force almost half (46%) of NSW businesses to scale back their operations.

“These numbers show a deterioration in business conditions and sentiment for the 320,000 enterprises that pay workers’ compensation premiums – something which should alarm our state parliamentarians,” Business NSW CEO Daniel Hunter said.

“Six months on from when this public debate kicked off in earnest, it has become very real. Many hard-working business owners and charities are very concerned there won't be a solution found by NSW Parliament and that they are facing these premium hikes.

“Almost 50% of business owners are saying that they will have to scale back operations or reduce head count. It is dire. We've got one member business whose bill has gone up by $200,000 over the last two years.

“That's a small manufacturing business. These manufacturing businesses are only just holding on here in NSW anyway. And we're going to lose that capability, lose that family business and lose those jobs unless we do something this.”

In May, Business NSW asked members what impact a projected 36% increase in workers compensation premiums would have on their business. We asked the same question in the past two weeks.

There has been 10% increase (from 36% to 46%) in the proportion of businesses who say they expect to be forced to scale back their operations.

Cutting staff is another measure on the table. The proportion of businesses who say they will have to reduce their headcount has increased from 45% to 49% in the past six months.

Those who have said they will put their expansion plans on hold has increased 5%, from 35% to 40%.

And the proportion who say they will be forced to close remains at one in five (21% now compared to 20% in May).

“This fortnight is the last chance for our state parliamentarians to strike a deal to get premiums under control,” Mr Hunter said.

“It is important to remember that 36% over three years is just the start of it. If you are a business that have had a few claims, which we call claims experience, that number pushes up to 50% pretty quickly and it pushes people to the brink.

“The cost of doing business here in NSW is just spiralling out of control and we're not competitive with the other states let alone the rest of the world.

“It will be some of those businesses that are currently on the margin that are most affected.”


About Business NSW 

Formerly the NSW Business Chamber, Business NSW is the peak policy and advocacy body which has been representing businesses in NSW since 1826. We represent almost 50,000 businesses.

MEDIA CONTACT: BEN PIKE – 0429 993 822