When Care Becomes Currency: The Moral Inversion of Workers’ Compensation

Once, workers’ compensation was a social contract. If you were injured, the state would protect you; your employer would contribute; society would stand behind you.It was born from a moral principle — that human life had value beyond its labour.

Today, that principle has been quietly inverted.

Employer premiums now flow into Treasury-managed investment funds, generating billions in returns for the state, while the injured fight to access basic care. Health has been re-coded as finance — a spreadsheet of liabilities and returns. The goal is no longer to heal but to contain cost. The machinery still calls itself “insurance,” but it functions more like an extraction economy built on pain.

This isn’t progress. It’s regression disguised as reform.

A Short History of a Long Betrayal

In 1884, German Chancellor Otto von Bismarck introduced the world’s first accident-insurance system — a radical idea for its time: the state’s duty was to prevent destitution, not profit from it. Australia followed soon after. By 1910, NSW, Australia, had legislated employer liability, and in 1926 Premier Jack Lang founded the Government Insurance Office (GIO) to stop private profiteering. For half a century, that model held — imperfect, but humane.

Then came the computers.

In the 1980s, algorithms entered claims management.In 2015, the NSW Government replaced WorkCover with icare, SIRA, and SafeWork NSW, promising modernisation and efficiency. Instead, it created distance, digital, bureaucratic, and moral. Decision-making moved from doctors and caseworkers to data analysts and actuaries. The language of care was replaced by the language of “sustainability.”

And sustainability, in government terms, means money.

The 21st-Century Poorhouse

If the 19th century confined the poor to workhouses in the name of thrift, the 21st confines the injured to bureaucracy in the name of efficiency. The ideology hasn’t changed, only the software has.

When injured workers challenge decisions, they’re met with suspicion, not support. Case managers talk in compliance codes. Employers are told to “trust the process.” Meanwhile, the funds built from employer premiums — employer's money — are invested through Treasury for long-term growth. The state profits; the injured deteriorate. Employers pay.

This is what ethicists call a moral inversion: a system built for protection now generates value through harm. It’s the same logic that drove the Poor Law Amendment Act of 1834, when governments justified cruelty as fiscal prudence.It’s the same flaw that Bismarck tried to correct by recognising that security is a public good, not a profit line.

Nearly 150 years later, that principle is being undone in the very democracies that once embraced it.

The Cost of “Modernisation”

Every new reform promises accountability. Every review exposes the same failures. And every government insists the next round of change will finally fix it.

But you can’t modernise morality. You can only restore it.

The 2024 Special Inquiry into SIRA, led by former Federal Court judge Alan Robertson SC (who also examined aspects of the Robodebt oversight failures), found evidence of “defective administration” in complaints and investigations. Yet by 2025, the same agencies criticised in that inquiry were put in charge of “modernising” the system. Meanwhile, proposed legislation threatens to raise impairment thresholds for psychological injury, effectively shutting the door on thousands of traumatised workers.

It is a cycle of reform without repair, a ritual of technical change that preserves moral failure.

The Way Forward

There is another way. A system that heals must be built on transparency, accountability, and lived experience — not Treasury targets. It means removing conflicts of interest, protecting the injured from re-traumatisation, encouraging employers to do no harm to their injured, punishing poor insurer behaviour and putting recovery back at the centre of design.

Most of all, it means asking the question no budget paper can answer: Who is the system for?

Until governments stop treating care as capital, the answer will remain the same: It’s not for the injured.

It’s for the balance sheet.