Page 870 - Week 03 - Tuesday, 20 March 2012
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underwrite private insurers or insurance generally is already underwritten by the government.
In all previous iterations of this scheme in the ACT the power for the ACT government to establish this reinsurance scheme was limited by a sunset clause, usually of two years. Over the last 10 years the powers have expired and been reintroduced several times, each time with a sunset clause.
The rationale for the sunset clause, as numerous government ministers have expressed over the last decade, was that the government reinsurance scheme was only to be temporary and insurance providers were to return to the market and take over. This has not occurred, and the industry has not shown any willingness to offer affordable insurance options for acts of terrorism. In this unfortunate situation it remains incumbent on the government to provide this coverage for ACT workers.
The key difference between the bill before us today and previous schemes is that this bill reintroduces the scheme without a sunset clause. It gives the government an ongoing power to establish a temporary reinsurance fund following an act of terrorism. There are some advantages to this, although the Greens do not believe they are significant. It is administratively easier to not have to reintroduce the scheme every few years and it avoids the potential that there might be a delay in reintroducing the scheme, leaving workers without cover. The new scheme also introduces a review clause so that the government must undertake a review of any temporary insurance fund within 10 years of its coming into existence. I understand this time frame is based on the typical time it takes claims to be resolved.
I would say that it is disappointing that a long-term solution to the terrorism reinsurance issue has not been found. Removing the sunset clause seems, in some ways, an acceptance that insurers will not re-enter the market. Private insurers have a choice of whether to provide this service, and I would still hope that they do so once again. I would also hope that more is done at the federal and interstate levels to address this issue. I would urge the government to engage strongly with federal and state counterparts as well as to channel efforts through the Insurance Council of Australia.
DR BOURKE (Ginninderra—Minister for Education and Training, Minister for Aboriginal and Torres Strait Islander Affairs, Minister for Industrial Relations and Minister for Corrections) (11.38), in reply: The threat of terrorism and the risk of injury that it poses to ACT workers must be acknowledged and managed by the territory. Following the 11 September 2001 terrorist attacks, most insurance companies withdrew products offering coverage for an act of terrorism. Any products covering acts of terrorism that have been placed back on the market have been prohibitively expensive. As a result it is either not possible or not affordable for employers to gain workers compensation coverage for injuries arising out of an act of terrorism.
For this reason, the responsibility for action falls to the government.
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