Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2003 Week 6 Hansard (18 June) . . Page.. 2039 ..

MS TUCKER

The issue of more interest is the Insurance Compensation Framework Bill. As we have heard, this bill applies the no fault and rehabilitation principles of the ACT's very good workers compensation scheme to public liability and medical indemnity. I do not think, however, that the quantum shift involved in this bill is an exact equivalent to the introduction of the ACT's workers compensation scheme in 2001.

The structure that supports workers compensation, and for that matter third party insurance, was already in place prior to the changes two years ago. The details of those changes were thrashed out over a couple of years by government and stakeholder groups. While the result was not entirely consensual in all its details, the time taken to develop the scheme meant that the broad principles were accepted by the community, employee, business, legal and insurance sectors. It was also driven by and, of course, resourced by, government. While the focus on rehabilitation rather than compensation sets the ACT scheme apart, it is still nonetheless a small component of the national system.

The introduction now of a more extensive no-fault insurance scheme for injury compensation and rehabilitation by the ACT alone without extensive development work involving those same stakeholder groups, given the current position of the insurance industry in Australia and world wide, is a much more dubious proposition.

It is perhaps salutary to look at New Zealand's situation. New Zealand has a universal no-fault insurance scheme, covering vehicle, work and all other accidents. It has, at various stages, been run by government insurance agencies and private insurance companies. What we have seen is a diminishing standard of living and support for those people permanently injured or impaired. The overall cost is high and there is not enough incentive for government to index payments.

The ongoing cost to government has been massive. When the scheme was run privately, the insurance companies lost money, had every interest in limiting payments, and in the end abandoned the scheme. It has been put to me that if such a scheme were introduced in Australia, the only way to guarantee a reasonable level of support, where necessary, would be to write it into the constitution.

Another factor that militates against the introduction of this scheme is the underwriting capacity of the insurance industry in Australia. In fact, one could argue that following the acts of terrorism of the past few years, and arguably problems in investment, there is not much capacity around the world. Given that the HIH collapse took 35 to 65 per cent of the capacity out of the Australian market, getting any of the insurance companies to pick up the business would be very difficult, if not impossible.

The other side of this debate, of course, is the role of the Commonwealth government in providing social security. Part of the emphasis on larger payouts in public liability cases is that the level of support offered to people who are permanently injured or impaired is insufficient. Recent decisions by the Australian Tax Office disadvantaging people taking structured settlements have compounded that problem. Clearly, there are national issues involved in determining the best way forward, and a significant amount of work needs to be done with community and insurance representatives, starting with a fairly rigorous actuarial study, before we could proceed with this bill.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .