Page 3065 - Week 08 - Tuesday, 14 August 2012

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Tenants have also received a newsletter on the redevelopment of the Northbourne Flats and further newsletters will be issued. A website at has also been established which can be accessed by tenants.

Taxis—insurance—petition No 130

The response read as follows:

The ACT Government notes the petition by the petitioners, tabled by Ms Mary Porter AM MLA on 27 March 2012, and makes the following comments:

Whilst recognising that compulsory third party (CTP) insurance premiums must be sufficient to fund legal obligations to compensate people injured in road crashes, the Government is very concerned by the high cost of CTP premiums in the ACT and the amount by which they have risen in recent years. In fact, premiums for ACT motor vehicles have increased on average by 36.5 per cent since the commencement of the Road Transport (Third-Party Insurance) Act 2008 on 1 October 2008.

The Government is conscious that the present high cost of CTP premiums impacts on the taxi industry disproportionately, due to the risk exposure and claims experience of taxis compared to other classes of motor vehicles. As a consequence, the premium for a taxi has increased by 46.4 per cent, from $5,826.80 to $8,531.10 between 1 October 2008 and 30 June 2012, compared to an 11.8 per cent increase in per kilometre taxi fares over the same period.

CTP premiums are an appreciable overhead for taxi operators. The escalation in CTP premiums at a rate significantly in excess of both consumer and wage price indices in recent years has therefore undoubtedly exacerbated cost pressures on taxi operators.

Although the taxi industry is able to seek to recoup increased CTP costs as one element in its submissions to the annual taxi fare review conducted by the Office of Regulatory Services, there can be a considerable delay between higher premiums being incurred and any change to taxi fares. For example, CTP premiums increased by 8.0 per cent with effect from 16 August 2011 but it is not anticipated that there will be any consequential alteration to taxi fares prior to 1 July 2012.

In February 2011, the Government acted to constrain future premium increases by introducing the Road Transport (Third-Party Insurance) Amendment Bill 2011 (CTP Bill) into the Legislative Assembly. The Government’s view was that the Bill would, if passed, encourage more insurers to enter the ACT market, giving all motorists, including taxi operators, the benefit of competition and the additional discipline that this would have imposed on claims handling and premium pricing by insurers.

The CTP Bill would have significantly improved the ACT’s CTP scheme, focusing as it did on improved health outcomes for injured persons in the place of monetising injury. In addition to putting downward pressure on CTP costs, competition could also be expected to lead to better customer service for

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