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Legislative Assembly for the ACT: 2002 Week 10 Hansard (27 August) . . Page.. 2868 ..

MR HUMPHRIES (continuing):

wrong-is that a large, unexpected amount of money fell into the system that year, which might not be repeated the year after, even though I said that the budget base for 2002-03 has been adjusted to $24.137 million-even more than that collected in 2001-02. Therefore, something is happening to lift the base for revenue from insurance premiums.

If there is a windfall-and, pretty clearly on these figures, there is-I take the point the Treasurer appears to be making: that the windfall may not be permanent, and that perhaps the sale of Commonwealth buildings in the territory will end. As I say, I am not sure what that has to do with insurance premiums, but let us say it ends. It may be the case that we do not need to have, on an ongoing basis, an insurance advisory scheme of the kind the committee recommends. That is, if the windfall from insurance does not continue beyond a couple of years, in my view it is quite conceivable, and reasonable, for the government to argue that the sort of scheme we have talked about in our recommendation should not continue beyond that point either.

I sincerely hope that, within a couple of years, the activity this and other governments-and even some oppositions-across Australia are considering to deal with insurance will have substantially contained the problem and we will not need to have specialist responses like this three, four or five years from now. However, unless we try it, we will not know.

The government response goes on to suggest that there might have been an illusory windfall in the past financial year because the collapse of HIH may have caused some property holders to take up new policies.

I am not sure how that works-the minister might explain it to me. If someone has had to cancel an earlier policy, because the company concerned has collapsed, and they have taken up a new policy, surely that is a second lot of insurance that has been purchased and stamp duty will have been paid on it. However, as I understand it, if you cancel an existing policy, you are entitled to a refund of the stamp duty, unless the duty is more expensive. This is our point-the cost of stamp duty is going up. The fact that a policy of insurance has had to be cancelled and a new one taken out should not mean that there is extra money in the government's coffers because, as I have said, you get a refund of stamp duty. That is my understanding of the state of affairs but, again, the minister can correct me if I am wrong.

The government points out that it is taking a number of valorous steps to address the insurance crisis. It refers, primarily, to the stamp duty relief for not-for-profit organisations. However, it does not mention in its response that the extent of the relief is about $200,000 and that the extent of its extra revenue from insurance premiums is $2.7 million which, I would have thought, is a fairly significant difference. The big joke, right at the end of this part of the government's response, is that, having heard the recommendation that there be consideration given to the establishment of an advisory service for people to minimise risk, we find that that is exactly what the government proposes to do.

It is worth reading the last paragraph of this response:

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