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.

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