The NSW Government says a review of icare operations will include scrutiny of the number of senior executives and their remuneration as it looks “to cut excessive spending, waste and salary costs”.

The review announced today will be led by Treasury after the Minns Government recently passed laws providing it with powers to obtain information and records on icare spending.

“We will remain unrelenting in our pursuit of best practice and best governance at icare,” Work Health and Safety Minister Sophie Cotsis said today.

“Workers need access to a scheme with affordable premiums and workers need to be supported when things go wrong at work.”

Senior executive numbers and their remuneration will be scrutinised, in line with the NSW Government’s commitment to freeze the pay and cut the number of senior executives across the government. Medical, income and other support provided to injured workers are not impacted by the review.

The Government says savings identified will flow through to individuals and businesses across NSW by putting downward pressure on workers’ compensation premiums and protecting benefits to injured workers.

icare says Ms Cotsis wrote to the organisation last week as part of a wider government expenditure review, asking it to focus on efficiency and effectiveness to help with repair of the state Budget.

“Today’s announcement from the Minister is a welcome opportunity for icare to work closely with Treasury and NSW Government and build on the wide-ranging improvement program that is already underway,” a spokesperson told insuranceNEWS.com.au.

“icare continues to work hard to deliver long-term sustainability of our operations and better outcomes for the community of NSW.”

Business NSW CEO Daniel Hunter says it's important that the review is conducted efficiently to ensure as much downward pressure as possible is put on premiums ahead of next year’s filing. 

“This review is a necessary measure on the road to reform for the state’s workers compensation scheme. We welcome this as a step in the right direction to better cost and performance management,” Mr Hunter told insuranceNEWS.com.au.

“We have been very concerned about the impact administrative inefficiencies have had on claims and our members’ ability to manage their premiums.”

The Labor Government, which was elected on March 25 after the Liberal/National Coalition held power for the previous 12 years, has criticised its predecessor for “a decade of mismanagement” of the state insurer and says it had to top up icare with a $669 million transfer shortly after taking office.

The State Insurance Regulatory Authority (SIRA) told a NSW parliamentary committee hearing last month that Nominal Insurer workers’ compensation scheme return-to-work rates have stabilised and should improve as a new icare claims management model gains traction. 

“We know this year that the target premium rate is still below break-even, so we expect the financial strength of the scheme to continue to deteriorate for the next 12 months,” Workers and Home Building Compensation Regulation Executive Director Darren Parker said.

“But from 2024 to 2025 icare is predicting that the scheme will start to turn around, and at the same time we can expect that there will be better return-to-work rates and better outcomes for workers.”

It would still take a number of years, until June 2030, for the financial position of the Nominal Insurer to meet the capital target zone, he told the committee.