The Minns Labor Government today released the findings of a review as part of the NSW Government's wider reform plans to put the state's insurance and care system on a more financially sustainable footing, ensuring workers compensation remains affordable and protects workers.
The Minister for Work Health and Safety, Sophie Cotsis, commissioned the NSW Treasury Operational Expenditure Review: Insurance and Care NSW (icare) report. The review aims to assist icare to achieve a permanent reduction of five per cent in its net cost of service from 2024-25.
NSW Treasury made 14 findings as part of the review. These findings provide a roadmap to improve transparency over icare's expenditure, hold icare accountable for its statutory objectives, and improve government oversight of performance and expenditure across the state's insurance and care system.
Building on the findings of the review, the Minns Government is taking swift action to right icare's foundations to tackle the pressures facing our workers compensation schemes.
This week the Minns Government introduced amendments to the State Insurance and Care Governance Act 2015 that strengthen icare's governance arrangements and lift accountability and transparency for icare's business performance.
Under this bill, the CEO would no longer sit on the board of directors, while the Secretary of the Treasury Department would join the board. The appointment of the CEO by the board will also require Ministerial approval.
The Minns Government has directed NSW Treasury to work with icare to address the findings of the review. Minister Cotsis has written to the Chair of the icare board to request advice on how review findings will be addressed. The icare board will also be required to advise the Minister on how it will make measurable progress on its savings plan without detracting from levels of service and care.
Key findings of the review are that:
- There is a need for greater clarity and continuity in measuring icare's contribution to system performance and impact on the financial sustainability of its insurance and care schemes.
- icare is addressing a difficult legacy of accountability, governance and culture, and investing in digital transformation. The complexity, scale, cost and pace of this investment will require proactive management to reduce duplication and deliver expected benefits.
- That NSW Treasury, icare and SIRA need to work together on opportunities for a joined-up reporting framework that promotes greater accountability for system performance, including the efficient allocation of resources and value for money outcomes.
The review focused on icare's controllable business costs to deliver insurance and care schemes on behalf of the community and government. The final report can be found here: https://www.treasury.nsw.gov.au/operational-expenditure-review-into-icare
Minister for Work Health and Safety, Sophie Cotsis said:
"This review provides a roadmap to drive greater transparency, accountability and focus on operational efficiency across icare and the State's insurance system.
"It's a necessary step to restore confidence in icare and part of the government's commitment for a financially sustainable insurance and care system with better outcomes for injured workers, employers and other policy holders."
