A damaging proposal from the state insurer icare to raise compulsory workers’ compensation premiums by 22 per cent would see jobs lost and NSW businesses close.

The state’s peak business group, Business NSW, says an increase of this magnitude would be an extraordinary decision by the new NSW Government in a week where a consumer recession is forecast for the state this year.

Business NSW CEO Daniel Hunter said the proposed premium increase would send shock waves through an already stressed business community.

“This news could not come at a worse time for businesses across the state and we are profoundly concerned at the impact such an increase would have on jobs and the economy,” Mr Hunter said.

“It is cruel to force NSW businesses pay for a compulsory insurance scheme that has been mismanaged by icare and has failed employers and employees at every turn.

“Businesses are fighting inflationary pressures, interest rate increases and labour shortages and there can be no doubt that an increase to premiums of this scale would see businesses close and jobs lost across NSW.”

A 22 per cent increase in premiums would amount to businesses forking hundreds of millions of dollars in the coming years. 

A Business NSW survey of more than 900 enterprises conducted in January this year revealed one in three businesses would be forced to close down if the NSW Government didn’t act to improve business conditions.

“The new government was just elected on a promise to reform icare and prioritise getting premiums under control,” Mr Hunter said. 

“Business NSW and it’s almost 50,000 members are calling on the government to be measured in their decision, and not unleash havoc on the state’s economy.

“The NSW Treasurer, Daniel Mookhey, has previously described icare as a ‘basket case’. Businesses should not have to foot the bill.

“We are confident the NSW Government will make good on their promise to reform this system so employers are not forced to shut their doors.    

“The obvious priority is for icare to get the fundamentals of the scheme under control – which means fixing the broken claims management process.”