Two damning reports into the New South Wales government-owned insurer, icare, have been released today, with the state opposition saying a “cowboy culture” took root at the troubled insurer.
Key points:

  • A report last year revealed icare suffered hundreds of millions of dollars in losses
  • MP David Shoebridge says Treasurer Dominic Perrottet should take responsibilty
  • Mr Perrottet says “significant changes” have already been made

NSW Parliament’s Law and Justice Committee today tabled its 2020 review of the Workers’ Compensation Scheme, following last year’s revelations uncovered by a joint ABC and Sydney Morning Herald investigation, showing hundreds of millions of dollars in losses and the underpayment of thousands of injured workers.
The committee’s chairman, Nationals MLC Wes Fang said the report highlighted the deteriorating financial position of the scheme, including the Nominal Insurer (NI) and Treasury Managed Fund.
“It is clear from the evidence that the performance of the Nominal Insurer has been affected by a fall in return to work rates and an increase in claim costs, including medical expenses,” Mr Fang said.
“icare’s decision and ambitious approach to implementing a new claims management model has also played a role, to the detriment of injured workers and the public.”
The NSW Opposition’s Finance and Small Business spokesman, Daniel Mookhey, who also sits on the committee, said that while the report covers 14 different matters, there was an overall problem of governance.
“A cowboy culture took root in icare, and it led to a public disaster which small business and injured workers are paying for. This disaster was overseen by the Treasurer from day one,” Mr Mookhey said.
“The reason why icare’s culture has been so poor, is because icare’s management team acted like kings, the board failed to hold them to account and the Treasurer cheered them on at every single opportunity.”
NSW Greens MP David Shoebridge said it was time for NSW Treasurer Dominic Perrottet to take responsibility for icare’s failures.
Greens MP David Greens wants the Treasurer to take responsibility for icare’s failure.(AAP Images: James Gourley
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“Over the last five years under the control of Dominic Perrottet icare has lost more than $4 billion of public value and let down tens of thousands of injured workers and today we see two reports that highlights the extent of the problems in icare,” Mr Shoebridge said.
Probity procedures not followed
The NSW government last year brought forward a statutory review into the scheme, headed by the Hon Robert McDougall QC, with that report also released today.
Mr McDougall said while there was no evidence of criminality or corruption, the execution of the program was what he called “sloppy”.
“As I show in the body of this report, the result of these shortcomings was that procurements for the NI often involving very large sums of money were conducted on an opaque basis,” he said.
“And in a way that did not ensure that the NI was obtaining value for the money (derived, of course, substantially from premiums paid by employers) that it spent.”
Mr McDougall said his review showed proper probity procedures were not followed.
“icare’s executives accepted gifts and benefits from time to time. Those gifts and benefits were either not recorded at all, or were not recorded promptly and appropriately.
“That is a dreadful look for an organisation that manages many billions of dollars of what is in substance public money,” he said.
Mr McDougall said Mr Perrottet had declined to be interviewed for the review.
“I do not have his insights into the quality of the reporting from icare, or as to the relationship between him, his office, and the board and CEO of icare.
“I requested and was provided with a sample of briefings to the Treasurer over the years of icare’s operation. Those briefings are consistent with the good news approach identified elsewhere in this report.
“It is impossible to know what more might have been raised verbally during reporting sessions, and the extent to which (if at all) the Treasurer or his office challenged icare on its reporting.”
‘We haven’t sat idle’
Treasurer Dominic Perrottet says the review has been a priority for the state government.(AAP Image: Mick Tsikas
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In a statement, the Treasurer said Mr McDougall’s “objective and constructive” approach would enable the government to focus on implementing the review’s recommendations.
“Securing the review has been a top priority for me and the government, and I thank Mr McDougall for his work in delivering a report that will ultimately support better outcomes for injured workers and employers in NSW,” Mr Perrottet said.
“Over the past seven months we haven’t sat idle, we have acted and embarked on the most significant changes to icare since the scheme was created in 2015.”
The NSW government also acknowledged the work of the Law and Justice Committee’s report.
Chairman of icare, John Robertson, said he acknowledged the mistakes of the past and found the outcomes of the review “thorough, fair and provided key areas of improvement.”
icare chief executive Richard Harding says the problems of the past were unacceptable.(Supplied: icare website
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“The icare board is committed to getting the organisation focused back on what it was set up to do caring for injured workers and road users and supporting NSW businesses, homeowners and the NSW government,” he said.
The sentiments were echoed by icare chief executive Richard Harding, who said the problems of the past were unacceptable and while the overall intention for change was right, the execution did not meet community expectations.
“icare has already taken steps to address many of the matters that are referred to in the report, but there is still a long way to go,” he said.
“We have already restructured the organisation around the schemes we manage, introduced new governance policies, reviewed our remuneration framework, tightened our procurement practices, committed to reducing operating costs by $100 million, and more.”