COMPULSORY THIRD PARTY PREMIUMS

The Hon. R.L. BROKENSHIRE (14:48): I seek leave to make a brief explanation before asking the Leader of the Government, representing the Treasurer, a question about compulsory third party (CTP) motor vehicle insurance premiums.

Leave granted.

The Hon. R.L. BROKENSHIRE: On the last day of the last week of sitting, Thursday 14 May, the leader tabled a ministerial statement in this place on behalf of the Treasurer. The statement informed honourable members that CTP premiums will rise by 8.5 per cent in one financial year, far more than inflation. The Treasurer indicated in his statement that the measure was necessary due to the poor financial position of the compulsory third party fund. However, Tasmania (subject to the same global financial crisis as us) in December last year announced it was going into its fourth year of no CTP increases, and South Australia ranks as one of the states with the highest CTP premiums in the nation.

My estimate is that this measure will yield at least $49 million per annum for the government and increase premiums for families by at least $30, on average, per vehicle. Families in the outer suburbs largely require more than one vehicle, so this increase starts adding up. However, at the same time, law-abiding motorists (those who pay their CTP premiums) are being asked to cough up $49 million, while speeding motorists and others in the fines payment system in court, most of whom would be paying driving fines, have $174 million in outstanding fines.

Rather than collect $174 million owing to the government from motorists who have done the wrong thing, the government is slugging law-abiding motorists $49 million more per annum. My questions, therefore, to the minister are:

1. Where exactly is the fund failing financially and by how much?

2. Will every cent of this revenue raising measure go back into compensation for injured motorists and road safety initiatives?

3. How can the government in good conscience hit law-abiding motorists for $49 million when those who break the law are thumbing their nose at the courts, the parliament and the rest of us by not paying this outstanding $174 million?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (14:50): These are matters for the Treasurer, but I will make some comments in relation to my understanding of the Compulsory Third party Fund. That fund is, of course, operated by the Motor Accident Commission. The board of the Motor Accident Commission issues a report to government every year and recommends what is necessary to maintain the stability of the fund. Essentially, it is the board of the Motor Accident Commission that makes recommendations to the government to ensure that the fund is viable, and that has been the practice for a long time. So, in relation to some of the honourable member's questions, of course the money that is taken in premiums for compulsory third party insurance goes into the fund.

I also make the comment that to compare with other states is not necessarily a helpful exercise in the sense that the states have different degrees of coverage. I do not know what the Tasmanian system provides, but I know that in recent years this parliament has considered changes to the law in relation to what benefits are provided to those who can claim compulsory third party insurance. Clearly, there are differences between the states. Some states provide a level of benefit that is higher than other states. It may well be that in the case of Tasmania the benefits provided under the scheme are less than those provided in this state, and I will refer that matter to the Treasurer.

It would certainly not be correct that $49 million is going to the government. If that is what the increase will recoup, that is what will be necessary to maintain the financial stability of the fund, and of course that money will go to the Motor Accident Commission. Part of the reason why the Motor Accident Commission will be having funding problems in the current environment is that, like workers compensation schemes and other insurance schemes generally, the revenue that is received in premiums is of course invested in a range of ways, including equities, property and the like. Clearly, with what has happened in the stock market over the past 12 months, it is inevitable that the revenues would be down, and that would impact on the viability of that scheme, as it has on other similar schemes.

The honourable member raised the question of pursuing motorists who are not properly insured. It has been made clear in recent days that this government has policies in place to seek to address that particular issue, and clearly more needs to be done to pursue those who do not pay for insurance. In the past couple of days I received an insurance renewal for a vehicle that is in my name. I note that with that renewal was a notice warning people how the government will be using new cameras to photograph vehicles that may not be registered.

That is one of the things this government has in place to ensure that there is a much greater chance of catching those people who do not insure their vehicles. I noticed that only the other day when I received a renewal notice for my insurance. There are things the government has been doing, but if there is any other information the Treasurer wishes to provide I will refer the question and give him the opportunity to do so.