Legislative Assembly for the ACT: 2002 Week 8 Hansard (27 June) . . Page.. 2334 ..
MR PRATT (continuing):
aspects of the proposal. The critical date is 1 July. It is imperative to ensure that we underwrite and guarantee the cover of our workers, so we will support this.
I would like to make a couple of points-a couple of caveats. We will be very concerned to ensure that the government continues to guarantee that the creation of the emergency fund, which is to underwrite insurers, is established in such a way that is not to the detriment of ACT taxpayers. We will be watching that closely. We want to be assured that there will be no detriment to ACT costing structures. We hope ACT insurers will be able to get back on their feet after a couple of years.
We recognise that the proposal is based on a sunset clause of two years. We are not inclined to see the provisions extended beyond two years. We would therefore pretty much demand that, as we approach the setting of the sun, we undertake a full review of the provisions. We would continue to support what measures the government may then wish to put in place, provided that we review in detail the progress and workings of that vehicle.
Finally, Mr Speaker, we will also seek assurances from the government that the establishment of an underwriting mechanism is not to be a precedent. We do not want this to be a precedent for further ACT activities to be underwritten by government, unless there is an extremely good reason.
The provision of guaranteed cover for ACT private sector employees working in ACT government establishments is important. To that end, we support the bill.
MS DUNDAS (12.27): Mr Speaker, if this bill passes, the ACT government becomes the reinsurer for all insurance companies providing coverage in the ACT, if an act of terrorism occurs that results in workers compensation claims costing more than 5 per cent of the amount collected in workers compensation insurance premiums in one year. In effect, every ACT taxpayer is taking responsibility for finding money to pay compensation for personal injury or death, in the event that an act of terrorism occurs.
I wondered what the ACT taxpayer was receiving for assuming this risk. I have learned that the answer is "absolutely nothing". We, as taxpayers, are assuming a risk previously borne by insurance companies, but we are not receiving any payment for that risk. Further, it is clearly unlikely that insurance premiums for employers will drop as a result of the ACT government assuming this new liability. So, arguably, this law creates a small windfall for insurance companies.
I acknowledge that the bill provides a mechanism for the recovery of money from insurers in the event that compensation is paid for an act of terrorism. However, the bill does not say what proportion of any compensation payout will be recovered from insurers. Will it be 20 per cent, 50 per cent or 100 per cent? The bill does not say, so it is not clear how much risk the ACT taxpayer is assuming.
If there were a terrorist attack in the ACT, it is likely that the target would be a Commonwealth government building, rather than a privately owned or ACT government building. However, it is possible that the ACT government would be required to pay to the federal government the full cost of compensation for the death or injury of contractors. Perhaps it would be more appropriate for the Commonwealth to