Page 20 - Week 01 - Tuesday, 12 February 2008

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New South Wales. As an island in that state, we must have very compelling grounds to put in place policies that create awkward differences across the border with New South Wales.

I thank the government for providing me with information on the operation of third-party schemes in other parts of Australia. It is for reasons such as this that a review provision is absolutely essential in this bill. Of course, we all want cheaper third-party premiums, but we must have an objective evaluation of the impact of this bill after it has settled down, to see what outcomes have been achieved. Some of the factors that contribute to our larger premiums—such as the size of the pool, our interest rates and the behaviour of the courts—are not covered by this bill, and clearly cannot be; but these have big impacts as well.

I need to make an observation about comments made by the Chief Minister in introducing this bill. The Chief Minister is reinventing history; I suspect that fading corporate memories are at fault. We have been told by the Chief Minister that the NRMA held a de facto monopoly in issuing third-party insurance for many years; he talked about an “accidental monopoly” for the NRMA. That is not completely correct. A proper understanding of what happened in the ACT in the 1970s is that the then New South Wales GIO pulled out from writing third-party insurance in the ACT and the then commonwealth government had to go on bended knee to plead with the NRMA to stay in the ACT to write third-party insurance. Moreover, it must be acknowledged that, under the current regime, there is no impediment in principle for other insurance companies to enter the third-party insurance market in the ACT.

The critical issue under both the current and the proposed regime is the start-up cost for a company entering a new market. Even with this new regime, companies will need to undertake a detailed analysis of the ACT market; develop a sound business case for ACT activities; identify the capital necessary to fund third-party business, possibly in the order of up to or even more than $100 million; and be able to support a competitive pricing policy for some years to provide a platform in the new market before receiving a return.

I want to spend a few moments dealing with the legislation. I have noted that this is a very large bill. The intention behind this is to try and anticipate all eventualities. As we are now aware, there are some aspects in the bill, such as the proposed CTP premium board, where there is a hope that these provisions will not be required. Unfortunately, that leads to it being a very long bill.

As an aside, I note that the explanation of the disclosure of interest by members of the board in clause 56 is quite innovative. In place of the usual A, B and C, we have real live characters in the form of Albert, Boris and Chloe. I commend parliamentary counsel for their innovation in trying to make these bills a little more readable and a little more real.

I support the broad content and flow of the regime proposed within the bill. I understand that the insurance industry is happy with the content of the bill, particularly the objective of seeking to have people who are injured in accidents being able to undergo rehabilitation at an early point to assist them to regain their health and to return to a productive life and, as necessary, to work.

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