ICAC needs to probe icare workers’ compo scandal

August 12, 2020
NSW Treasurer Dominic Perrottet and former icare managing director John Nagle in 2018. Photo: BodyShop News

Pressure is mounting on New South Wales Treasurer Dominic Perrottet to resign after revelations of financial scandals involving the state’s workers’ compensation scheme icare have been aired in a parliamentary committee.

Premier Gladys Berejiklian has also come under fire as she continues to defend the treasurer and the administrators of the almost bankrupt icare scheme.

Icare was created in 2015 but, atypically, is funded by employers not taxpayers. However, its board is directly accountable to Perrottet, even paying the wages of two of his staffers, it has been revealed.

Even before COVID-19 hit, icare was in crisis. An August 4 Sydney Morning Herald report said the State Insurance Regulation Authority (SIRA) had been warning of a financial crisis since June 2018. Information provided by Treasury said that 52,000 injured workers had been underpaid $80 million. Yet, it continued to pay big money to its executive.

The parliamentary inquiry was told that discussions about privatising icare were common.

SIRA’s chief executive revealed on August 3 that icare’s policy was to assume an injured worker had been paid correctly, even if there was no evidence. Of the 100 files reviewed, 60 had no information and were deemed correct by icare. Of the 40 that did have information, at least 19 had been underpaid.

icare insures 284,000 employers in NSW and 3.4 million workers. It protects more than $193 billion of NSW government assets, including the Sydney Opera House, the Sydney Harbour Bridge, schools and hospitals, Adele Ferguson wrote on August 8. “The plan was to transform icare into an ASX 50 company. The mantra was think big and don’t behave like a public sector entity.”

Unions NSW has condemned Perrottet for siphoning money meant for injured workers and said he must resign or be sacked. Just five years ago icare was sitting on a $4 billion surplus “but after years of mismanagement it is now at risk of insolvency”.

“This sounds like it’s from a fictional political TV drama, but it’s real life: a US political operative who never worked a day for iCare, was paid by iCare to work for the Treasurer and blocked parliamentary orders investigating the Treasurer/icare,” Unions NSW tweeted on August 11.

Some of what Perrottet described as the agency doing a “superb job” included:  the underpayment of 52,000 sick and injured workers; failure to disclose 77 contracts worth almost $157 million; the wages of icare executives soaring from $600,000 to $18 million in four years; and attempts to cut off payments for thousands of injured workers.

Greens MLC David Shoebridge described the Treasurer’s public defence of icare as unbelievable. “This was more than a conflict of interest; this was the treasurer taking money from injured workers to pay for political staffers.

“We have heard case after case of injured workers who have been thrown off the scheme, struggling in poverty, and now we hear that hundreds of thousands of dollars are being bled from the scheme to pay for the treasurer’s staff.”

He called on the treasurer “to come before the parliamentary inquiry into icare and explain in detail what he knew and when about icare paying for his staff”.

NSW Labor leader Jodi McKay has called on Premier Gladys Berejiklian to sack the treasurer and set up an independent inquiry into the “sham arrangement”.

Former Independent Commission Against Corruption counsel Geoffrey Watson has called for the ICAC to investigate. Two icare CEOs have resigned.

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