The NSW Government plans to reform the state’s troubled workers’ compensation scheme to bring it into line with other states, but says the overhaul will not result in lower payouts.

Premier Barry O’Farrell says the Government needs to rein in the scheme after a PricewaterhouseCoopers audit revealed it is more than $4 billion in deficit.

“Under present projections, the scheme would not return to surplus within 10 years, and to return it to full funding within five years would require premiums to rise by around 28%,” Mr O’Farrell said.

He says workers’ compensation premiums in NSW are already 20-60% higher than in Queensland and Victoria. The schemes in other states “strike a better balance between looking after injured people, promoting incentives for safe workplaces and setting competitive premium rates”.

The State Government will reveal the full details of its plan in the next month, but denies it involves cuts in payouts to injured workers, as suggested by union groups and the opposition.

“There is no proposal to cut benefits, but we’re going to have to look at everything because it is simply unsustainable that over the past six months the WorkCover deficit has been $9 million a day,” Mr O’Farrell said.

“We need to address the cost of premiums, we need to address the rate of workplace injury, and we need to ensure that the scheme operates with the maximum efficiency so we can guarantee to workers the adequate protection and security they deserve if they are injured at the workplace.”

Media reports last week quoted union groups saying claims that workers’ compensation premiums in NSW are double those in Victoria are not true, but the NSW Business Chamber says high premiums are a “key barrier” to economic growth in the state.