Page 3654 - Week 08 - Friday, 24 August 2012

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Proposed new clause 21C negatived.

Proposed new clause 21D.

MS HUNTER (Ginninderra—Parliamentary Leader, ACT Greens) (6.01): I move amendment No 13 circulated in my name which inserts a new clause 21D [see schedule 4 at page 3688].

Amendment agreed to.

Clause 22.

MR SMYTH (Brindabella) (6.01): We will be opposing this clause. Ms Hunter’s amendment to this clause will omit the proposed parts 4.9A to 4.9D. These provisions set out the incredibly complex array of processes for dealing with people who have been injured in a road crash. Apart from questioning the complexity of these proposals, there are two issues in particular that require critical comment.

First, there is the question of the discount rate in section 155A. This is the rate at which damages are discounted to take account of the time value of money. Because of the effect of inflation, $100,000 today clearly has more purchasing power than $100,000 in 20 years time. The application of a discount rate attempts to bring the future value of damages back to present day values. If the discount rate is increased as the government proposes in this bill, this will reduce the present day value of any damages which are awarded. In the UK, for instance, the rate is currently 2.6 per cent and currently the government is asking for five per cent here. We do not accept this very significant reduction in the quantum of damages, should they be agreed to at least at this time.

Secondly, there is the matter of the 15 per cent threshold in section 155F. The proposal for this threshold is associated with the proposed application of the American Medical Association’s Guides to the Evaluation of Permanent Impairment, Fifth Edition, particularly referred to in section 155P. Many of us are now aware that these guides are inappropriate for the use of determining damages in personal injury matters. In particular, this was made apparent to the public accounts committee. Let me quote from chapter 1 of the guides headed “Impairment Evaluation”:

It must be emphasised and clearly understood that impairment percentages derived according to Guides criteria should not be used to make direct financial awards.

Let me read that again. The guide that the minister wishes to use says:

It must be emphasised and clearly understood that impairment percentages derived according to Guides criteria should not be used to make direct financial awards.

I emphasise that this is the only paragraph in this chapter which is in bold print. The American Medical Association is trying to make a very clear point.


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