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Legislative Assembly for the ACT: 2000 Week 8 Hansard (31 August) . . Page.. 2804 ..

MR QUINLAN (continuing):

I do not want to refer particularly to heads of departments or whoever might be put forward as client members, but we have seen, and will see in the future, no doubt, administrators with their own priorities. I think that if we are in the process of setting up a distinct and separate insurance operation, then that should be reflected in the board itself. I commend the change to the Assembly.

MR HUMPHRIES (Treasurer, Attorney-General and Minister for Justice and Community Safety) (8.09): Mr Speaker, the advice I have received from treasury is that the structure as proposed in the present bill is to be preferred. As I understand it, the opposition is concerned about the idea of having client members, people from client organisations, sitting on the board with the specialists, the people with particular qualifications in insurance and the general manager and one other person. In a sense the reason the government is proposing to have client members on the board is because this is not an insurance company in the ordinary commercial sense of the word. Normally a corporation's or a company's principal objective is to maximise the return for the shareholder interests of the company. You are meant to conduct the business in such a way as to maximise the profitability of what the corporation does-

Mr Quinlan: You are not demonstrating some hostility towards the private sector here, are you, Mr Humphries?

MR HUMPHRIES: Not at all. On the contrary. In a sense you are saying that the clients should not be on the board because that is not the way it is normally done in the corporate sense. You before were arguing that this is not an ordinary corporate body. This is not an ordinary corporate body; this is a different kind of body. The Assembly has now decided that this is in fact a body which is of a different nature. It is a body which is internal to the ACT government operations.

What the bill is designed to do in this respect is to allow the interests of the clients themselves to be focused on in the way in which the authority operates. Having client members on this authority board is a way of allowing the authority to focus on the needs of the clients. That is what the board is about. The captive insurer is not about meeting the needs of a government shareholder who wants a profit out of this organisation. This is not about a government trading enterprise designed to maximise profit for government. It is about getting the best possible arrangement in insurance terms for client agencies, for the people who require the insurance. In that sense it is less like a corporation and it is more like a mutual or cooperative.

Mr Quinlan: But do not tell the insurance industry out there. Otherwise they will not accommodate it.

MR HUMPHRIES: Mr Quinlan smirks. I said this is a hybrid body, and this is the respect in which it is more like a body which is designed to meet the needs of its members. It is a mutual organisation rather than an organisation designed to maximise profit. Mr Speaker, I think it is important for that reason that the clients of the organisation are represented on that body. The inclusion of two client members is a signal to the agencies that the ACT government's insurance board is inclusive of their needs. It is about focusing on what is going to be best from their point of view.

Why shouldn't they be there on the board if that is what is being focused on? Who is better to articulate the needs of client organisations within the ACT government than the clients themselves?

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