The recent premium hikes are particularly burdensome for NSW businesses, especially given the current economic climate. The ABC reports that Australia’s economy is growing at its slowest pace since the 1990s recession. Source

Adding to the turmoil is the resignation of CEO Richard Harding, who was the highest-“over paid” public servant in NSW. While some view his departure as a positive development, it raises further concerns about icare’s leadership and financial management. Despite being a nonprofit, icare seems to be generating substantial profits and disproportionately rewarding its staff, rather than providing equitable services to NSW workers and businesses. Source

Even the NSW Parliament reports major mistakes made by Icare source that need redress.

sFurther complicating the situation are concerns about icare’s insurance rate calculations. There are accusations that certain industries, possibly those with strong lobbying power, benefit from lower rates despite their high-risk profiles.

icare employs a “double dipping” pricing structure in its assessment of industries, with two distinct percentage rates applied for workers’ compensation insurance rates:

1. Work Injury Classification (WIC) Rate: This rate reflects the relative risk associated with each industry, with higher-risk industries typically facing higher rates.

2. Dust Diseases Contribution: This premium covers cases of dust-related diseases and is part of the broader workplace injury compensation framework managed by icare in NSW.

While these mechanisms are fair in principle, disparities between industry grouping suggest an inequitable distribution of costs. For example, the manufacturing and fabrication sectors appear to face higher costs relative to its risks, while other sectors seem to benefit from lower rates despite their high inherent dangers.

Industry Rate Comparisons (these industries are on the lowest side)

This sector, despite its inherent risks, (OSHA Guide) faces a distinctively moderate rate.

If anyone remembers the oil drilling rig Deepwater Horizon, operating in the Macondo Prospect in the Gulf of Mexico, exploded and sank resulting in the death of 11 workers on the Deepwater Horizon and the largest spill of oil in the history of marine oil drilling operations.

Or you might notice the cringe worthy occupational health and safety examples set by movie Armageddon might be cause for alarm as it was filmed on a rig in Western Australia (Poor Bruce Willis with no helmet, gloves or eye protection.)

Yet BIG OIL gets even BIGGER discounts for its workers comp insurance with icare! and

Perhaps I am being unfair, lets compare similar industries who do metal fabrication.

Did you know a Boeing 747-400 type airplane with 6 million parts, 71 meters long, 64 meters wingspan and 270 kilometres of cable, weighs approximately 185,000 kilograms, of which approximately 75,000 kilograms is aluminium.

Aircraft Manufacturing industry category

That is a lot of cutting welding and bending of metal work fabrication that goes into a plane manufacture and parts, yet aircraft manufacture enjoys some of the lowest workers compensation rates on offer by icare in comparison to OPIE Manufacturing Group who also does aluminium and metal parts fabrication.

Compare other industry rates here you might find them incredibly surprising – (Who knew the kiwi fruit industry was so incredibly dangerous?)

Take a look at all the >>> icare Premium Rates and be surprised

Is this a reflection of the icare insurance policy or government policy in action?

OPIE Manufacturing Group, a family business operating safely for over 60 years and currently employs about 100 people, we face significantly higher premiums (not kiwi fruit level, rate high; but still very high) compared to other comparative industries with what appears to be a naturally high inherent risk yet incredibly low rates.

OPIE Manufacturing Group are charged:

Sheet Metal Product Manufacturing

Despite OPIE Manufacturing Groups strong safety record and minimal workers compensation claims over many years, OPIE Manufacturing Group is penalised with exceptionally high premiums.
(not icare CEO salary level high) but still bloody high!

This disparity suggests a potential misalignment in icare’s pricing structure and seems more aligned with its internal salary policy than its work cover policies.

Premium costs a disincentive for safety?

Paradoxically, these high-cost disincentivise safety improvements. While crucial for worker well-being and long-term savings, the immediate financial outlay for upgrading manufacturing technology and equipment can be prohibitive.

For OPIE GROUP, these high premium costs delay these critical technology investments, even though they could ultimately lower insurance premiums and boost operational safety.

We all know many hands makes safer work and icare higher premiums inflicted on the manufacturing sector actively compromise employment opportunities as business attempt to keep staff numbers down to accommodate the substantial premium rises.

Manufacturing is an essential industry,

Post-COVID, it has become clear that Australian manufacturing is the backbone of economic sovereignty for our nation, underscoring its vital role in economic stability, national security, and self-reliance. As we navigate the complexities and competition in the global market, investing in and supporting our manufacturing sector is paramount for safeguarding our national interest and ensuring long-term prosperity

Perhaps if icare and the NSW Government could reassess its “policy” bias on manufacturing seeing it to be as vital as to our nation as petroleum exploration we may see more equitable distribution of premium costs.

I know my industry sector is not alone in icare’s, don’t care, unfair pricing structure and poorly delivered services. Product Review and many other sectors are affected more broadly than even my business sector who don’t have the lobbying power of multinational conglomerates.

Changes need to be addressed – both on behalf of safety for all workers at industry level; in a genuine effort to lower premiums for us all; while icare makes its focus on delivering a fair price and service for its policy holders and claimants instead of letting the CEO take the money and run!

We need to be safer at work across all industry categories. It’s a very sad truth that in 2007 there was a high of 300 deaths but by 2022 this had a 35% drop on fatalities in all work places across all sectors, this indicates a trend toward a safer workplace which should reflect lower premiums across the industry

However icare will claim injury claims have remained steady primarily because of the increase in claims for mental health creating longer claims.

This reflects the same comments that were tabled in the LEGISLATIVE COUNCIL Standing Committee on Law and Justice 2023 Review of the Workers. Compensation Scheme The Hon. Greg Donnelly MLC Committee Chair wrote:

At OPIE Manufacturing Group, we are committed to fostering a workplace culture that prioritises the mental health and well-being of all our employees. We are “R U OK” active, and offer access to counselling services, and flexible work arrangements to support our team members in maintaining a healthy work-life balance. While we strive to create an environment that nurtures mental wellness, we acknowledge the complexity of mental health issues and understand that individual experiences may vary. Consequently, while we are dedicated to providing robust support systems, we must recognise the limitations of our responsibility concerning any lifetime mental trauma that an employee might claim, as these issues can be influenced by a myriad of personal and external factors beyond our control. Are all NSW business’s shouldering the cost of the mental health burden of our state?

To echo Greg Donnelly, I agree “it is very clear that much more needs to be done” but, is it my businesses responsibility to shoulder the cost of the states health care providers with overly high premiums from a monopolistic price fixer to treat peoples long term childhood traumas?

Another very sad statistic has been the decline employment in the manufacturing sector.
As reported by AIgroup, we can infer that the overall decline in manufacturing employment from its peak to its lowest point was approximately 40%  Less people to cover means less risk.

So while the cost to icare in the numbers of people to cover and numbers of real injuries point in downwards trend, icare keeps raising prices. This seems to be more inline with CEO salary expectation’s than a fair reflection of risk to the insurer.

A thorough review by the NSW State Insurance Regulatory Authority could help icare regain public trust and ensure a fairer system for businesses and workers alike.

I am the 3rd generation managing Director of a family business built in the heartland of Western Sydney; deep in panthers territory and like any businessman I understand the need for pricing and profit. It is essential to sustain any business, but this unfair price gouging hurts us all.

My people and I work very hard to deliver quality services and fabricated goods to my customers safely each and every day safely. Because… you know what… WE CARE about our people at OPIE Manufacturing Group.

It is my hope that with the right direction, leadership, and policies, icare could demonstrate it cares too, and together we can all make the workplace safer for NSW workers at a price businesses can afford.

 I hope you join with me to highlight the damage icare policy price hikes are doing your business in NSW and share your own  “iCare – Don’t Care” stories

Tristan Opie

Managing Director, OPIE Manufacturing Group