Email: workerscompensationreform@sira.nsw.gov.au
Subject: Submission regarding the Workers Compensation Reform Regulations and Guidelines
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Submission to SIRA concerning proposed Workers Compensation changes
Dear SIRA,
I am writing to express my serious concerns regarding the proposed changes to the New South Wales workers’ compensation system, specifically those intended to restore the scheme’s solvency.
I urge SIRA to leave the system alone. Not permanently, but now, until a fundamental error is corrected.
The scheme is unfunded. You know this. The Premier has said the scheme “will not exist in five to 10 years” without major reform. They have blamed rising mental health claims, underinsurance, and compliance failures. These are the symptoms. They are not the cause.
The cause is the suppressed wage base.
WorkCover premiums are calculated as a simple equation: Premiums = Wages × Premium Rate. When the minimum wage is forcibly held at 72 per cent of what the government itself says a single adult needs to live, the entire wage base is suppressed. Premium revenues collapse. The scheme cannot be fully funded. Actuaries report “unfunded liabilities.”
This is not a management failure. It is the arithmetic of a 26‑year‑old policy choice: the constant.
My research has proven this. I have tracked the minimum wage against Chart C — the government’s own measure of a single adult’s self‑sufficiency — for 104 consecutive quarters. Over 26 years, the minimum wage has remained locked at approximately 72.4 per cent of that adequacy standard. The statistical probability of this happening by chance is less than one in 1⁰¹⁵⁶.
This is not a theory. It is a mathematical constant.
The same constant that has stolen an estimated $880 billion from Australian workers has also systematically starved the WorkCover scheme of the premium revenue it needs. Your proposals to cut benefits, tighten eligibility and increase premiums are responses to the arithmetic, not corrections of it.
The mistake SIRA is about to repeat
The proposed changes treat the symptom — an unfunded scheme — without addressing the disease. You are tightening the belt on a patient whose ribs are already showing.
If the minimum wage were corrected to $1,309.95 per week — 100 per cent of the Chart C adequacy standard — the entire wage base would expand. Payroll tax would increase by about $1.9 billion annually. Superannuation balances would be restored. The Medicare levy would generate more revenue. And WorkCover premiums, calculated as a percentage of that expanded wage base, would rise commensurately.
The unfunded liability would shrink. Not because of cuts to injured workers. Because the economy would finally pay workers what the government itself says they need to live.
Why SIRA must leave the system alone
You cannot fix a funding problem caused by wage suppression by cutting the wages of injured workers. That is not reform. That is cruelty disguised as arithmetic.
I am not saying SIRA should do nothing. I am saying SIRA should do nothing until the root cause is addressed.
I am asking SIRA, as part of this consultation, to formally recognise the cause of the scheme’s unfunded liability. I am also asking you to defer any further cuts until the Fair Work Commission has answered my 12 questions, analysed my 104‑quarter dataset and corrected the minimum wage to $1,309.95.
The public conversation about the NSW workers’ compensation scheme is being framed as a choice between protecting injured workers and restoring solvency. That is a false choice. The correct choice is to correct the wage. The wage is the solution. Everything else — including the reforms you are consulting on — is a patch that will fail.
I propose two specific actions for SIRA
1. Publish a public acknowledgment that the suppressed minimum wage is a material contributor to the scheme’s unfunded liability, quantified by your actuaries.
2. Commit to recommending to the NSW Government that the minimum wage be corrected to Chart C ($1,309.95 per week) as a necessary condition for any sustainable reform of the workers’ compensation system.
If these actions are taken, I will support genuine reform. If not, I will continue to oppose any changes that cut benefits while ignoring the arithmetic of the constant.
The wage is the solution. Chart C is the anchor. The constant is the crime. The time to correct it is now.
Yours sincerely,
Robert George Paturzo‑Elliott
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