Leading businessman Ryan Stokes was recently reported in the press as raising concerns about the rapid rise in mental health claims for workplace-related psychological injuries. Mr Stokes has linked this to our well-noted productivity ills.

Representatives of the insurance industry have joined in voicing these concerns.

There is certainly a massive increase in claims. The statistics are both alarming and undeniable.

Workers’ compensation payouts, NDIS expenditure, and other costs associated with mental health claims have ballooned in recent years. Amongst some of the more worrying statistics are workers’ compensation premium increases of 12 per cent per annum and life insurers claiming that mental health payouts have increased from $1.2bn to $2.2bn in the last 5 years alone. There are abundant jaw-dropping metrics available on the topic which can be found in a two-minute online search.

What do these statistics demonstrate? Is there an actual increase in workplace-related mental health issues, such that the costs are merely reflecting the issue, and if so, what has caused this exponential increase? Are there systemic abuses, with unmeritorious claims proliferating? Have the eligibility criteria become too lax?

If you read the growing commentary on the topic, views differ.

Many health workers, insurers, lawyers and other participants in the system will say that a reset is urgently needed and that the threshold for psychological injury claims needs to be reviewed. Recently, NSW Premier Chris Minns set about to implement reforms to reduce the growing costs to the workers’ compensation scheme. Opposition is coming from the usual quarters, including the unions and the Greens, but interestingly even the state Liberal opposition is unenthusiastic about Minns’ proposal.

The system is clearly buckling under its weight, and while the issues are perhaps not totally straightforward, it’s highly unlikely, to the point of incredulity, that we are experiencing a newfound and rampant surge of workplace psychological injuries and that the massive claims incidence is truly reflective of a workplace-related mental health epidemic. In this regard, business leaders are correct to pose what are genuine questions. Premier Minns is also demonstrating common sense in seeking to review thresholds and to implement much-needed legislative review.

Covid might well have produced unusually high-risk conditions for mental health welfare which have a lagging effect. Further, technological transformation, real wage declines, and economic uncertainty are also likely to have contributed to heightened stress in the workplace. However, any large-scale employer or industrial relations lawyer or expert will tell you that the safeguards provided to workers and level of legislative, judicial and State support have never been higher, so it’s a reasonably safe bet to conclude that there are abuses in the system and that eligibility criteria should be examined. It’s not too dissimilar to the alarmingly high incidence of Ritalin prescription to sub-teen boys for ADHD that seems to have closely tracked the introduction of the NDIS.

As the number of claims and volume of money in the system increases, so does the power of vested interests: lawyers, health professionals and the paid carer industry creating a huge financial ecosystem that doesn’t positively contribute to the economy in the same way as other more directly productive industries do.

While no sensible policy or society would seek to unfairly discriminate between the support available for persons with mental health ailments as compared to physical injuries, it’s naïve and misguided to not recognise that mental health claims are inherently more prone to abuses. A well-managed public and private health system needs to cater for this reality

More broadly, the question of whether workers’ compensation, private insurance, and public health schemes have developed into larger safety nets to help a greater proportion of the population in genuine need, or whether these schemes are themselves producing or fuelling the need, is one not easily answered. But it’s a question that urgently needs to be confronted by policymakers because the costs are simply unsustainable.

A funding crisis is already upon us, and this creates enormous problems as its effects ripple through the economy, producing a very unhealthy spiral of State and insurance dependency.

Andrew Christopher is a lawyer and writer