Workers’ compensation premium relief has been delivered for 320,000 NSW businesses after the major NSW political parties clinched a commonsense deal.

The businesses community has welcomed a landmark agreement between the NSW Government and Opposition to reform the state’s under pressure workers’ compensation scheme.

While the do-nothing scenario would have seen premiums shoot up at least 36% over three years, this new deal will freeze average premiums at their current rates for 18 months.

“These reforms are an early Christmas present for the hardworking business owners who are already enduring significant cost pressures,” Business NSW CEO Daniel Hunter said.
 
“The NSW Opposition Leader Kellie Sloane needs to be commended for listening to the business community and taking a leadership position on such a critical issue.

“The NSW Government and Treasurer Daniel Mookhey’s focus and courage on these reforms has paid off and must also be commended.”

Key changes include:

• An increase in the Whole Person Impairment (WPI) threshold to 25% (from July 2026)

• An 18-month legislated cap on iCare premiums. Premium adjustments will then be determined subject to an updated impairment model based on a report from the NSW Chief Psychiatrist

• Additional benefits and an intensive return to work program for some workers above the 20% WPI

• Reforms to the reasonable management action defence for businesses to ensure they are not unfairly subject to illegitimate claims.

 “These workers’ compensation reforms are a major step towards the scheme achieving sustainability,” Mr Hunter said.

“One in five businesses told us they would be forced to close if compelled to pay a 36% increase in premiums.

“Instead, the new deal will put significant downward pressure on premiums and ensure workers get the support they need.

“These reforms, to be legislated in the new year, will save NSW businesses hundreds of millions of dollars. These savings will help businesses make crucial, productivity-driving investments in staff, equipment and innovation.”

The deal also includes provision for a new successor to be developed to replace the government-funded Business Connect program.

The program – which offered critical advice to burgeoning businesses – was ended earlier this year. 

“Business Connect was an important program which helped thousands of SMEs thrive, however the new program must have greater reach and enhanced capabilities,” Mr Hunter said.

“We look forward to working with NSW’s elected officials to ensure this program has the impact and funding envelope it deserves.”

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