Last November, the NSW government brought in a bill to repeal section 19B of the Workers' Compensation Act, rolling back a set of changes that were made in May 2020 to ensure that essential workers who contracted COVID were properly covered even if they could not prove they caught it on the job. At the time, the state government estimated that section 19B would cost businesses up to $638 million in 2022.
But now a report by policy research think-tank the McKell Institute has turned up alternative projections for the number and cost of COVID-19 workers' compensation claims, and these figures suggest that the government overestimated the cost by more than 100%. The fresh analysis estimates under 12,500 total claims - less than half the government's original projected figures - and a total cost of $315 million, also less than half of what businesses had feared.
The McKell Institute report attributes this discrepancy to the change in vaccination rates between last November and the present day - an increase of 15% in the vaccination rate (from 80% to 95%) apparently suffices to slash cost estimates by 50%. This had in fact been pointed out in December by SIRA CEO Adam Dent, who said that the initial scenarios had become redundant.
The proposal to repeal section 19B drew heavily polarised reactions in November, with businesses and industry groups cheering the removal of what they feared would be onerous costs while frontline workers and industrial relations groups harshly criticised the state government for unfairness to a highly vulnerable segment of the workforce.