NSW Industrial Relations Minister John Della Bosca can claim some success in his battle to reduce the state’s workcover deficit. It’s still terrible news, with the deficit blowing out $430 million in the last six months of 2002 to an impressive $3.23 billion. But Mr Della Bosca and actuaries PricewaterhouseCoopers say it could have been far worse.

The minister told a Sydney media conference that his reforms of the scheme, which do such things as cap compensation payments but continue to keep the insurance industry firmly out of the picture, have improved the scheme’s performance by $919 million. NSW taxpayers are doubtless ecstatic that he kept it from blowing out past $4 billion.

There were indeed some good signs in Mr Della Bosca’s announcement, even if the negative aspects were not emphasised in his media conference. The scheme returned an underwriting profit of $193 million in the second half of 2002, and Mr Della Bosca hopes to keep it in the black throughout this year. Negative investment returns of -2% were blamed for much of the deficit’s continuing climb.

There’s also a $400 million rise in claims in 2002 to take into account. Obviously the reforms haven’t kicked in sufficiently yet. Hopefully the NSW Government will be similarly laid back when it considers insurers’ slow response to its liability reforms.