Civil contractors can head into Christmas with far greater cost certainty following the bipartisan agreement in NSW Parliament to freeze workers’ compensation premiums for the next 18 months.
This outcome ends six months of political deadlock and prevents forecast premium increases of more than 36% over the coming years – which CCF NSW argued was a major concern for civil contractors already managing pipeline uncertainty, tight margins, and rising delivery costs.
The breakthrough follows a deal being brokered by the new NSW Liberal Leader Kellie Sloane in discussion with the NSW Treasurer on Labor’s proposed positive reforms, which had previously been blocked by Shadow Treasurer Damien Tudehope, the Greens and Upper House. This move follows sustained advocacy from the business community, including CCF NSW, calling for the Liberals to back business and give urgent relief to ensure projects remain viable and employers are not hit with unexpected cost shocks.
What has been agreed?
The reform package now set for legislation includes:
- An 18-month premium freeze, stopping immediate increases.
- A revised Whole Person Impairment (WPI) threshold of 25% from July 2026 (up from 18%).
- A new framework for assessing psychological injury, led by the Chief Psychiatrist, to better address rapidly rising claims.
- Enhanced employer protections, including improvements to the reasonable management action defence – a long-standing priority for CCF NSW members.
- Improved benefits and return-to-work supports for workers with higher levels of impairment.
- A successor program to Business Connect, supporting business capability across NSW.
Why this matters for civil construction
Workers’ compensation costs are ballooning and threaten viability of all businesses in NSW. Without intervention, steep premium increases would have flowed directly into project costs and reduced competitiveness of NSW civil contractors particularly for mid-tier and regional contractors already under pressure from a red tape burden and pipeline volatility.
This agreement provides:
- Relief from the most dramatic upward cost pressures across the next 18 months
- A more balanced long-term model for managing psychological injury claims
- Clearer protections when managing performance and conduct issues
There is still more reform needed but this is a positive start.
Advocacy made the difference
CCF NSW was pleased to stand with Business NSW, the NSW Government, not-for-profit groups and other partners to ensure the voice of businesses and civil contractors was clearly heard on an issue that directly impacts infrastructure delivery and business viability.
Next steps
The enabling legislation will be introduced early in the new year. CCF NSW will continue to work with government, opposition and crossbench members to ensure the reforms are practical, proportionate, and reflect our businesses face.
We will provide further updates as the legislation progresses.