I speak to the State Insurance and Care Legislation Amendment Bill 2022. As a member, I have seen too many workers in my electorate of Swansea being ripped off by the mishandling of icare by the Government and this Premier. I do not want to beat around the bush. The reason the Government has brought this bill before the Parliament is to fix the state of icare. The bill will amend the State Insurance and Care Act, the Workers Compensation Act and the Workplace Injury Management Act to implement several recommendations of the McDougall review. It tells us a lot. They receive recommendations to address issues in the workers compensation system but wait for over a year to implement them.
The bill will seek to clarify the objectives and functions of both the State Insurance Regulatory Authority [SIRA] and icare. It extends to SIRA's investigative and regulatory powers over the Nominal Insurer along with extending an icare director's term from three to four years and allowing icare's board to advise the Minister about whether a direction it issues is in the public's best interest. The bill will also allow for the settlement of lump sum death benefits and the restoration of some commutation rights by regulation. I note that the shadow Minister, the member for Canterbury, is in the Chamber and she will move an amendment relating to commutation, which the previous speaker alluded to. The amendment is needed because this is such a complex area that it should not be dealt with by regulation; it should be through legislation. Like the previous speaker, I too understand that there is agreement across this Chamber that the amendment will be adopted, and I agree with the previous speaker that that is a good thing.
What the bill fails to do is put an end to performance-related bonuses or incentive payments that have already cost taxpayers in the vicinity of $4 million. Nor has the Government sought to bring icare procurement in line with other New South Wales public sector agencies under the Procurement Act 1912 that exempts Nominal Insurers from procurement laws. It is unsurprising that this Government, given its track record on workers compensation and its complete disregard for workers, has failed to take this opportunity to appoint a representative for workers to the icare board. It makes sense. Not only are workers unrepresented on the board, but the Government has failed to make returning injured workers to health and employment an objective of icare.
Let us look at the Premier's record with icare. As we know, this is the Premier's baby. He was the chief architect, although "vandal" may be a more fitting descriptor. In July 2020 aFour Corners episode exposed the mismanagement and, frankly, the complete failure to support injured workers across this State. Since that episode aired, return-to-work rates have fallen to a near historic low of 62 per cent at the four-week interval. Not only have return-to-work rates plummeted, but icare has churned through its $3.9 billion surplus, racking up underwriting losses totalling $4.54 billion in the past three years. Let us not forget how that initial $3.9 billion surplus was achieved: by expelling more than 5,000 injured workers from the scheme and then cutting the benefits of those who remained. I find this to be absolutely shameful. It does not stop there. The mismanagement is hurting not just workers but also businesses, with premiums rising by 6 per cent in the past two years and with premiums to rise by at least 40 per cent by the end of this decade, impacting 3.2 million businesses.
That is only scratching the surface of the mismanagement of this agency under the Premier's stewardship, which has seen icare underpay 52,000 workers by up to $80 million. I have not even begun to detail the pay rises and dodgy deals conducted by icare, such as the new icare CEO being awarded a $120,000 pay rise earlier this year, which now makes him the State's highest paid public servant. This carefree approach to taxpayer funds is not limited to excessive pay rises; it extends to the haphazard approach to tendering for services, such as the awarding of a $140 million IT contract in a seven-day tender, despite being warned that this rushed process would end in disaster. This warning has rung true, with the project blowing out to $360 million, and it is still incomplete.
Icare has also been caught awarding at least $6 million to Korn Ferry. That was when icare attempted to at least put up a facade of a tendering process. When it comes to the IVE Group, it did not even go that far. Those opposite would know the IVE Group well; it is, after all, the Liberal Party's printer and major donor. It benefitted to the tune of a whopping $18 million from icare for a project that never even went to tender. If it was not Liberal donors benefitting from icare contracts it was Liberal Ministers, with icare caught paying a labour hire company $700,000 to hire a former US Republican operative to work in the now Premier's office.
This is a rotten culture that has been established within icare on this Premier's watch. It went right to the top, with the former CEO having to stand aside due to a conflict of interest after it emerged that icare handed his wife a $770,000 contract without tender. This is the same CEO who, with another top executive, took an undisclosed sponsored trip to Las Vegas paid for by a multimillion-dollar contractor to the agency. This is not a one-off of executives abusing their power. Icare was previously referred to ICAC for handing an $11 million marketing contract to a company secretly owned by a top executive at the agency.
Further, in the past four years icare's top executives took a total of 36 foreign trips—10 times more than SIRA, their own regulator, did. At the same time as executives were handing themselves and family members government contracts, a 2019 review found that 46 per cent of claims handled by icare failed to follow the relevant law. This led to SIRA, the Auditor-General and even former Supreme Court Justice Robert McDougall slamming icare for its poor governance. So poorly run has the organisation been that the Premier had to rush the approval of a $4 billion emergency bailout of the icare-managed workers compensation fund—which was protecting New South Wales police officers, paramedics, nurses and teachers—after it came within 23 minutes of plunging into crisis in June last year. Yet despite the disastrous stewardship of icare by the member for Epping, those opposite looked around and thought, "This is the bloke that should be leading the State." It is past time for this Government to fix the icare mess that it started and to deliver for the injured workers of New South Wales.