Perrottet’s workers’ compensation scheme was a disaster from the start

Everything about the workers’ compensation scheme icare, established and overseen by Dominic Perrottet until his recent appointment as premier of New South Wales, encapsulates the disdain that the Liberal state government has for workers.

The organisation entered the public eye in July last year after an investigation by the Sydney Morning Herald and the ABC’s Four Corners revealed that it had underpaid injured workers by up to $80 million, had awarded millions of dollars of unregistered contracts to friends and ex-colleagues of executives and was on the verge of financial collapse. The next day, Perrottet defended his organisation in front of parliament, insisting that the executives were doing “a superb job”, and in fact “should be applauded for the work they have done”.

Even by the government’s own standards, however, icare is failing miserably. Several of the key performance indicators that triggered the last major overhaul of workers’ compensation in 2012 were worse under icare by 2019, a Treasury note stated. A report from the State Insurance Regulation Authority in 2019 showed that the introduction of a new claims model, which promised to save hundreds of millions of dollars and increase efficiency, instead resulted in delayed and denied treatments for injured workers, sometimes leading to secondary injuries. These failures reportedly led to 50 percent of cases being incorrectly classified.

Problems with workers’ compensation payments were identified by icare in March 2019, according to a report by consultancy firm PwC, but nothing was reported until February 2020—quite a bit longer than the five business days within which these issues are meant to be reported. It took another ten months for the organisation to publicly invite injured workers to come forward if they believed they had been underpaid.

Rather than following them up itself, in an attempt to avoid making repayments, icare put the onus on workers to pursue remediation. As of five months ago, according to icare, 32 claimants had been repaid a cumulative $428,000, out of a group of 240,000 injured workers who may potentially have been underpaid.

These problems were not the result of misfortune, and the organisation was never interested in addressing them until it became a political scandal.

While every government institution under capitalism is run like a business to some extent, icare has been more brazen in its corporate ambitions than most. According to insiders in contact with the Sydney Morning Herald, privatisation was regularly discussed, and millions of dollars were spent “professionalising” the offices, commissioning self-promotional videos and hiring inspirational speakers to further that goal.

From its inception, the organisation was a ruling-class boys’ club, with a board hand-picked by Perrottet and including long-time Liberal donor Michael Carapiet. The joint investigation by the Sydney Morning Herald and Four Corners found that procurement practices within the organisation were regularly flaunted, with millions of dollars’ worth of contracts awarded to friends and ex-colleagues of icare executives. Perrottet himself was implicated when two of his staff were found to be on the payroll of icare.

In response to all of this, Labor still managed to put its criticism in a pro-business light, shadow treasurer Daniel Mookhey proclaiming that “employers pay their premiums to get sick and injured workers back to work, not to fund the board and management’s delusions and the treasurer’s political operations”.

Meanwhile, the real victims of icare have remained invisible throughout the whole ordeal—workers like David Bruce, whose treatment for a back injury suffered at work in 2018 was delayed and denied while he was passed between seventeen case managers and suffered secondary injuries. Many do not even attempt to claim compensation for workplace injuries because the process is often more painful than the injury itself and will likely affect their ability ever to get a job again.

It all reinforces the point made by Marx and Engels that workers under capitalism are treated simply as machines, often cheaper to replace than to repair.