Legislative Assembly for the ACT: 2003 Week 7 Hansard (26 June) . . Page.. 2604 ..
MS TUCKER(5.10): This bill extends the arrangement under the workers compensation scheme for acts of terrorism to be covered by government-and for insurance businesses to not be liable for them. It changes the obligation on companies to have their wages figures attested to by a recognised, rather than registered, auditor. The bill also makes it clear that the criminal code does not apply to offences against the act where they are already covered-more severely, as it happens-by the act itself.
The last two points are linked. On the one hand, there are only a few registered auditors in the ACT, whereas there are more than enough registered accountants. As the penalties in the act for failing to supply correct information are severe, the requirement to have qualified accountants who are members of the relevant trade institutions is stringent enough.
Apparently there was to be an increase in the number of registered auditors in the ACT, but that is now not going to occur. I do not know what that says about the profession of auditors. Recent events in Australia and the US have clearly cast the profession in a less attractive, although arguably more valuable, light. In any event, if there is an insufficient number of auditors to undertake a comprehensive and scrupulous examination of business accounts, then shifting this requirement under the workers compensation scheme to accountants seems perfectly reasonable.
The real issue goes to extending the ACT government's coverage of workers compensation scheme exposure to acts of terrorism. When this provision was introduced last year, the argument was put that the international underwriters would come back into the market in a couple of years and, therefore, for the ACT government to pick up the risk would be a temporary measure. Clearly the other risk is having a privately underwritten workers compensation scheme in the first place, given that insurers can choose to take the business or not.
The ACT being a small jurisdiction, a government-run scheme without the cost limiters and flexibility which are built into a private system could easily and quickly become a drain on resources, with no great benefits. Just look at the costs and limited benefits of the government scheme in New South Wales!
Given the international cost of the responses to acts of terrorism, the general enthusiasm of the insurance industry to get more hard nosed about its core business and the poor performance of general investment over the past few years, the expectation that insurance companies would be happy to come back into the terrorism market in two years was clearly too hopeful by half, and we do need to extend it.
It is interesting to see how quickly the pack of cards which is insurance business and investment-which one might describe as the high point of capitalism-has come tumbling down on the backs of a few greedy business managers and one or two precisely targeted acts of violence.
There are massive costs associated with catastrophic injuries and death, due in part to the limits of support offered by the state. If we lived in a more equitable world with a better record on social and health support, perhaps the insurance industry would not exercise such influence on our lives. We will be supporting this bill.