Australia's biggest workers compensation scheme is "going backwards", losing almost $6 million a day while expanding to include victims of bullying and sexual harassment.
More than 3.6 million workers in NSW are covered by the state's nominal insurer icare, which has been riddled with financial difficulties for years.
The insurer's June valuation, yet to be made public, shows a $5.4 billion deficit, according to preliminary advice seen by Treasurer Daniel Mookhey.
"At the same time last year, it was at $3.7 billion," the treasurer told reporters on Monday.
"The scheme is going backwards at a rate of knots.
"It's losing more than $6 million a day."
The government is seeking to reform the system to help injured workers, small businesses and charities, and its bottom line.
Further delays to reform will only make it more difficult but it lacks enough crossbench support to pass the changes through parliament, unless the coalition drops its opposition to the reform process.
"A scheme without money helps no one," Mr Mookhey said.
"We will continue to negotiate. We are open to all reasonable compromises."
But Labor had to relent on the changes that penalised the most seriously injured workers, the opposition said.
"We have bent over backwards to try to find compromises on workers compensation," Opposition Leader Mark Speakman told reporters.
"At the end of the day, the coalition wants to drive down premiums but we want to do it in the fairest way possible.
"That involves fixing up the front end of the scheme where all the rorts are occurring."
The treasurer has received backing from business groups in arguing the system faces potential collapse unless the threshold is raised for psychological injury claims.
Lawyers and unions warn the proposed threshold increase could exclude nearly all workers' mental health claims.
Mr Mookhey made the comments as the door was opened to more than 400,000 workers to seek court orders and damages to prevent workplace bullying and sexual harassment.
NSW government workers from Monday can seek the legal protections.
The move is part of changes intended to create a "prevention culture" to stop costly psychological injuries.
Psychological injuries take significantly longer to resolve than physical injuries the workplace compensation scheme was designed to support and have been targeted in contentious changes before parliament.
An anti-bullying and sexual harassment jurisdiction will begin operating in the NSW Industrial Relations Commission, alongside gender equality being enshrined in the state's industrial relations laws.
Laws against wage theft have been boosted and the commission will also get new powers to deal with workplace disputes, including over health and safety, the government says.
NSW parliament resumes on Tuesday, with only four sitting weeks remaining for 2025.
