Jack Lang's Bold Stand: Government vs. Insurers & The Formation of GIO

My grandfather's death in a Bowenfels quarry in 1939 isn't just a family tragedy — it's part of a larger story about workers' rights, corporate power, and the role of government in protecting its citizens. As I look at the state of workers' compensation in 2025, I'm struck by how many of the same battles are still being fought.

The Progressive Vision of 1923

In 1923, a Royal Commission laid out an ambitious vision for Australia: a comprehensive national insurance scheme covering sickness, invalidity, maternity, and old age. Chaired by Sir John Millen, the inquiry was extensive, reflecting the complexity of implementing such a system. The final report recommended compulsory insurance with universal coverage, rejecting exclusions based on geography or income. Despite these progressive recommendations, the vision faced significant challenges and was never realized at the federal level. Notably, while the National Health and Pensions Insurance Act passed in 1938, the scheme was abandoned the following year to divert funds to defense.

The 1926 Crisis and Lang's Response

By 1926, the battle for workers' rights had moved to the state level. In NSW, the Labor government under Premier Jack Lang introduced major reforms to workers' compensation:

- Making insurance compulsory for all employers

- Widening the definition of who qualified as a worker

- Increasing benefits

- Introducing disease benefits

- Setting premium rates for different occupations

When 71 insurance companies and employers' organizations mounted fierce opposition to these reforms, Lang responded decisively. Facing bad press and immense pressure from insurers threatening to withdraw entirely from the workers' compensation market, Lang acted swiftly and decisively. Overnight, he announced the formation of the Government Insurance Office (GIO) as a direct competitor to private insurers.

The response from employers was overwhelming — so many rushed to get coverage from GIO that their temporary offices were literally overflowing, with people having to fill out forms while leaning against corridor walls because there wasn't enough space. GIO's lower premiums, set at 20 shillings compared to private insurers' 30-40 shillings, played a significant role in driving this rush, offering a clear financial incentive for employers to switch.

This chaotic scene marked a pivotal moment: employers were voting with their feet, choosing government insurance over private companies. It showed how much power the government could wield when it directly competed with private enterprise in providing essential services.

Jack Lang was the only Premier ever to be dismissed by a Governor - read about the 1929-31 Crisis here: https://www.nsw.gov.au/departments-and-agencies/nsw-treasury/about-us/nsw-treasury-bicentenary/walking-a-tightrope/milestones/lang-plan-1931

A Personal Connection

My family's story intersects with this history in tragic ways. When my grandfather died in that quarry in 1939, GIO was already established as a key player in workers' compensation. Yet even then, the system wasn't perfect — my family's struggle for a settlement threw us into poverty on the eve of World War II.

The Long Arc of History

GIO's own story reflects broader changes in Australian society. From its birth as a tool for worker protection, it evolved through various phases:

- Starting as a state institution challenging private insurers

- Building community trust through local engagement

- Eventually being privatized and absorbed by AMP

- Finally becoming part of the Suncorp corporate family

2025: The More Things Change...

Now, nearly a century after GIO's creation, we face eerily similar challenges. Insurance companies still find ways to minimize payments to injured workers. The gig economy has created new categories of workers with minimal protections. Corporate power seems more entrenched than ever.

What's different is the political response. Where Jack Lang once boldly challenged corporate interests by creating a government competitor, today's governments seem more likely to step back and let market forces dominate. The "bravery" that created GIO — the willingness to directly confront powerful business interests for the public good — seems increasingly rare in our contemporary political landscape.

Lessons for Today

The parallels between 1926 and 2025 are striking:

- Then as now, private insurers prioritized profit over worker protection

- Then as now, there's tension between corporate interests and workers' rights

- Then as now, we face questions about government's role in ensuring social protection

But there's also a crucial difference: in 1926, government was willing to step in directly to protect workers' rights. Today, despite a century of economic growth and development, we seem to have less political will to challenge corporate power.

As someone who has dealt with GIO both through family history and personal experience, I can't help but wonder: Where is today's Jack Lang? Who will stand up to ensure that injured workers and their families don't face the same struggles my family did in 1939?

The story of GIO, from its bold beginnings to its corporate present, reminds us that progress isn't always linear. Sometimes we need to look back to find models for moving forward. And always we have to stop the harm for those we seek to help. Surely it's not going to take another 100 years before we do that?