Tens of thousands of businesses could be forced to close their doors if they have to endure an eye-watering 36% or more increase in workers’ compensation premiums over the three years to 2027-28.

The grim reality of the spiralling cost associated with the private sector Nominal Insurer has again highlighted the need to reform the way injured workers are compensated, according to the state’s peak business organisation Business NSW.

“One in five businesses have told Business NSW that they would be forced to shut if subject to the sort of premium increases we are likely to see if there is no reform,” Business NSW CEO Daniel Hunter said.

“That should sound alarm bells across both sides of the political aisle. One Western Sydney manufacturer told us this week they’d relocate the bulk of their workforce to their Queensland and Victorian sites if premiums increase by 36% or more.

“There needs to be a bi-partisan support for a solution to this problem and it must be done soon. Without it, thousands of family-run businesses will simply not survive.

“We are asking both the State Government and the Opposition to work together to ensure the proposed reforms pass through NSW Parliament in the coming week to keep NSW as the best place to start or grow a business.”

Businesses were surveyed May 4-19 as part of the latest Business Conditions Survey. Those figures also reveal the likely consequences of the premium increases would include:

• Reduced headcount (45%)
• Scaled back business operations (36%)
• Expansion plans on hold (35%).

 A separate question revealed 71% of businesses surveyed want “workers compensation insurance reform” included in the 2025-26 NSW Budget.

“It is simply too easy for workplace grievances and performance management issues to be put on workers’ compensation scheme,” Mr Hunter said.

“Let’s work together to ensure these reforms pass through NSW Parliament and keep NSW as the best place to start or grow a business.”

Survey question: With respect to the NSW Workers Compensation, in a recent statement made by the NSW Treasurer about proposed changes to psychological injury claims, "an employer facing no claims against them, operating a psychologically safe workplace, can expect their premiums to rise by 36% over three years to 2027-28 if we do nothing." How would a 36% increase in Workers Compensation premium likely impact your business?
 
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