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

Legislative Assembly for the ACT: 2001 Week 4 Hansard (28 March) . . Page.. 998 ..

MR KAINE (continuing):

is-and Mr Humphries alluded to it-if we fix this rate of 15 per cent without knowing anything about the matter at all, how long will it be before the insurance companies say, "We will not insure anybody in the ACT for this purpose." They will just walk away from the insurance business.

There will be no insurance company, and I would not blame them for saying, "We cannot afford to insure against this risk for 15 per cent and therefore we will vacate the field." It has happened before in the motor insurance business where, at one stage and for some years, there was no insurance company in the territory that would insure a motor vehicle, except the NRMA. So we have had the experience before, and I think that some of us should have learned a lesson from that. For those reasons, I find this quite irrational. I believe that it is not our place to fix a price in such a way, and I will not support it.

I must say that Mr Berry's amendment to it damps it down a little bit by putting a sunset clause on it, but I would have thought that two years was a bit too long, because by that time we probably will not have an insurance company that is willing to take the insurance. I am opposed, in principle, to the legislature acting in such an irresponsible fashion, Mr Speaker.

MR BERRY: Mr Speaker, I seek leave to move the amendment circulated in my name.

Leave granted.

MR BERRY: I move the amendment circulated in my name:

Add "and furthermore that the operation of any maximum rate so determined be limited to a period of two years".

Speaking briefly to it, I have some information which I have not circulated to Mr Kaine and I am sure that, once he receives it, he will be as concerned about the consequences of doing nothing as I am. We have to do something.

I must say, I share his concerns, but not to the extent that Mr Kaine has expressed them. Let me just point to a few issues here. I have in front of me a letter to the Leader of the Opposition, Mr Stanhope, from CITEA, the Construction Industry Training and Employment Association, which contains a table.

As an example, in the 1995 policy year, their insurance annual premium was $62,352. In the 2000 policy year, it was $415,000. That is an extraordinary increase and it has jumped from, as a percentage of their wages, 9 per cent in 1995 to 25 per cent on a payroll of $2.5 million.

Mr Humphries: Why has it gone up?

MR BERRY: The insurance companies basically run a book on the risk, and their assessment of the risk is that high, so they have put that sort of premium price on it. It is just about running a book on the risk.

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