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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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MOTOR VEHICLE ACCIDENTS (LIFETIME SUPPORT SCHEME) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 6 March 2013.)

The Hon. I.F. EVANS (Davenport) (11:03): I rise as the lead speaker on the government's Motor Vehicle Accidents (Lifetime Support Scheme) Bill. In making some comments, I wish, first, to address the issue of the government's decision to debate this particular matter today, which I think is regrettable, but the government is quite within its rights to debate this matter today, having introduced it on the last Thursday of sitting before the long weekend and then insisting on its being debated today.

I want to open with these comments because what the government has done is unfair on this chamber, but we fully intend to debate it this week and ultimately it will get through this week. The reason I say that I think it is unfair is for these reasons. The government introduced the bill on the Thursday of the last sitting week. We were given a briefing last Wednesday. The government is aware that the opposition's processes are such that we need to have papers written by the Thursday night for our party room meeting (which is on the Monday) so that they can be distributed on Friday for members to consider, in our party room on the Monday, matters that will be debated in the chamber that week. I gave an undertaking to the government that my view was that we would be better served to debate this in the week of 9 April, and I guaranteed it would be completed in that week. The government's decision was not to accept that offer; that is fine.

I just make the point to the government that this is a government that, through the Economic and Finance Committee, supported a motion to set up a committee inquiry into this matter. The Economic and Finance Committee then moved, with the support of the government members, to ask for the actuarial advice that underpinned the government's green paper that was put out last year, which outlined three or four different schemes that the government was considering. The committee wanted that actuarial information to look at. In fairness to the Motor Accident Commission, they did send us that actuarial advice, but with a requirement that it be kept confidential by the committee. So, I cannot use that information and I will not be using that information before the chamber today.

The government, after it put out its green paper, then put out a white paper that concerned a scheme involving three different bills that, joined together, set out the government's agenda for this particular issue. The Economic and Finance Committee, with support of the government members, asked for the actuarial advice on that particular scheme. That was on 7 February. Then the government introduced its bill—one bill, not three—and the Economic and Finance Committee, with the support of the government members, asked for the actuarial advice of that scheme, which is the scheme we are about to debate today.

We have not received one piece of actuarial advice, despite the fact that the Economic and Finance Committee, with the support of the government members, asked for that advice. That is fine; the government is quite within its rights to bring this bill before the house today. They have done that; we intend to debate it. We are debating it void of that information. I made the offer through the minister's staffer, in front of the three public servants who briefed us, to debate this matter on 9 April with a guarantee that we would put it through this chamber that week. As the minister knows, and as the government knows, the one person who has never ratted on the deal in regard to debating legislation is the member for Davenport. When I give my word, I stick to it, but the government decided not to accept that; that is fine.

Then of course, during the briefing, we asked a whole range of questions because, as the lead speaker and the shadow minister responsible, I have the obligation to write the paper for the joint party room of the Liberal Party to consider in reaching its position. Knowing full well that the paper has to be written Thursday night and distributed Friday, the government's answers came through at 20 to six last night. The answers that I got to all the questions I asked during the briefing were denied to me and my party room in relation to this particular matter.

I intend to read the questions and answers into the Hansard in due course, so that the Independent members who are in the chamber today, and indeed the upper house members who will debate this at some time in the future, at least know the questions that were asked and the answers that were given, so that they are better informed about the bill we are about to debate.

I think it is regrettable that the government have done what they have done, but I accept the fact that, under the rules under which we operate, if the government do want to flex their muscles and push something through, they have that entitlement to do so. As shadow treasurer, I will be keeping this letter that the minister sent me requiring it to be put through this week because, if we are lucky enough to win the election in March next year, then the standard has been set.

This particular bill essentially does two or three things, as I understand it. It reforms the compulsory third party scheme that the state operates under the Motor Accident Commission; it sets up a lifetime care authority for those people who are catastrophically injured, but only in motor vehicle accidents as defined under the Motor Vehicles Act; and it essentially meets some of the requirements that the federal Gillard government has imposed on states in regard to the National Disability Insurance Scheme. That is the broad context of what this particular bill does, and I will go through the issues one at a time.

In relation to the national disability scheme, it is my understanding from the briefing that we had that the federal government has nominated South Australia as a trial site for the national disability scheme. The trial that is running in South Australia of the national disability scheme is in regard to children. Part of the agreement at the COAG level in relation to setting up the trial sites for the national disability scheme is that the states have in place a process to deal with the catastrophically injured under the motor vehicle accident schemes. All states are required to have in place—it does not have to be operating necessarily by 1 July but it must be in place by 1 July this year, as I understand it—a scheme to deal with the catastrophically injured in motor vehicle accidents. If you are injured catastrophically outside of motor vehicle accidents, then there is no solution offered by this legislation at the moment.

If you are catastrophically injured outside of a motor vehicle accident, the briefing to me, as I understand it, was that the negotiations with the federal government are ongoing but no-one knows who is going to be covered, how it is going to be paid for, or when this scheme is going to commence—if the scheme is going to commence at all. If you break your neck playing football, you break your neck riding a horse, you break your neck diving off a jetty or in a pool, this scheme does not help you. The opposition are no better informed about what the government's plans are, either federal or state, in regard to those people. This scheme is about those who are catastrophically injured in a motor vehicle accident only.

What they are proposing in regard to the catastrophically injured is to take those people out of the compulsory third party scheme and put them in under a new entity—a lifetime care entity—essentially based on a New South Wales model. The lifetime care authority will be funded by a levy on motor registrations, I understand from the government. The actuarial advice shows that it is $105 a year—we have not seen that advice—but the government tells us it is $105 a year. That will fund all of the claims, the life-time costs of the claims for that year.

For instance, if there are 10 people catastrophically injured in a particular year, then the levy is set to collect 100 per cent of the lifetime medical and care costs of those people who were injured. They estimate the average of the length of time they will live—it might be 40 or 50 years, it could be 20 years, but they will estimate their length of life—and they will estimate the cost of care over that whole period for those 10 people. Then they will bring that back through actuarial advice to a present-day cost, and that present-day cost will then be divided by the number of car registrations and a levy will be struck to fully fund the whole-of-life costs for those injured in that particular year.

The way I understand it is that there will have to be some averaging of that particular levy in case there is an accident where 20 or 30 people are catastrophically injured one year and to the next the levy would be significantly different. The opposition is assuming there is some averaging component of that levy. The second reading speech, of course, says that the lifetime care authority will be guaranteed to be fully funded.

Under the legislation, of course, that is not true. Under the legislation, the Lifetime Care Authority gets actuarial advice on what the levy should be to fully fund it. The authority then recommends that to the minister and the minister can apply a political judgement as to whether the levy should be whatever the actuarial advice says and fully fund it, or indeed whether the minister will take a political decision weeks out from the election to say, 'Well, actually, we will make the levy a bit less and pick it up the next year.'

So, the levy can be manipulated for political purposes. There is nothing in the legislation that says the minister must ensure the scheme is fully funded. It may well be the government's intent that it be fully funded, but there is nothing in the legislation that requires full funding. We are told the extra cost to this is $105 per car registration. The government is saying this new scheme to look after the catastrophically injured will commence on 1 July 2014—so after the election.

They are saying that the current scheme is so bad in the way it treats the catastrophically injured that we have to introduce a new scheme, but we are not going to introduce the new scheme too quickly—certainly not before the election. We asked extensively in the briefing whether there was any requirement from the commonwealth government about when this scheme should start. Did they have to start it on 1 July? Is there any reason they could not start it on any other date? The answer was: there was no commonwealth requirement. The state government had simply picked 1 July 2014.

The opposition is going to support this legislation, but we are also going to move amendments to bring forward the catastrophic care component so that it starts on 1 October this year. We accept the government's argument that the catastrophic care scheme needs to be improved. We accept the government's argument that there are 20 to 40 people a year who fall through the cracks and are catastrophically injured in motor vehicle accidents that would be better served under this lifetime care model.

We accept that argument, but we see no reason at all why those catastrophically injured should not have this scheme as early as possible. We see no reason to delay the scheme. The government is setting up an independent commission against corruption within six months. We see no reason why they cannot set up this authority within six months. They have been over to New South Wales numerous times. It is essentially a photocopy of the New South Wales model. They have extensively negotiated with New South Wales about a whole range of procedures and how this works. It is not that difficult to set up this authority.

The Liberal Party will be moving an amendment that the Lifetime Care Authority, the catastrophic care component, is brought forward nine months to 1 October 2013 so that the care that is going to be given to the catastrophically injured under this particular provision is brought in as early as possible. Our amendment actually says that it be no later than 1 October, which means if the government can get it ready earlier, then let's bring it on earlier.

Why do we need this catastrophic care cover? We need this catastrophic care cover because the government argues—and the opposition accepts the argument—that there are people involved in motor vehicle accidents who are not covered by the current compulsory third party scheme. That is, the compulsory third party scheme is an at-fault scheme, and what that means is that to be able to seek benefit under the scheme, you actually have to prove a fault of another driver or vehicle.

In the second reading speech, there were a number of examples the minister used where people have been driving a motor vehicle and have had an accident, become catastrophically injured and no other vehicle was involved. The simplest case would be driving down the road, a kangaroo comes out, you swerve to miss the kangaroo, you hit a tree and become catastrophically injured—you are not covered under the current scheme and therefore all of the care goes to the family and to the welfare system generally.

I do not mind saying to the house that my sister's partner has a son who is in exactly this circumstance through a motorbike accident, he was not covered at all, and we have gone through the process of raising hundreds of thousands of dollars to build a trust for him so that he has appropriate care. The opposition knows exactly what catastrophic care we are talking about in relation to the faults with the CTP scheme and that is why we are genuine and sincere in bringing forward the date for the operation of this scheme; there is simply no argument as to why the scheme should wait until 1 July 2014. Why should another 10, 15 or 20 people fall through the cracks when we all know that if the government really wants to it could have this scheme running a lot earlier than 1 July 2014?

The lifetime care scheme will be a no-fault scheme and that means you will be covered if you are catastrophically injured in a motor vehicle accident regardless of any contribution you may make to your own injury and regardless of the circumstances of the injury. I know there will be people who will put the worst possible circumstance and say, 'Why are we covering these people?' and some people will come out and say, 'So, someone could be drugged out of their brain, driving unregistered, driving unlicensed, become catastrophically injured and the scheme is going to cover them?' and the answer to that question is, 'Yes, it is going to cover them.'

It is going to cover them because what is the answer if you do not cover them? What is to become of those people who find themselves in these circumstances? Thankfully there is a small number of people who find themselves in that circumstance each year, but when you find yourself in those circumstances it is traumatic and obviously life changing, not only for you, but for your whole family and whole support network. It is a no-fault scheme under all circumstances, as the opposition understands it.

That, essentially, sets out our understanding of the lifetime care authority. The question then comes: how are we paying for this $105 a year levy? The answer to that is: the way the government has decided to pay for it is not out of general revenue, not out of other tax measures, but by making the CTP scheme cheaper by cutting entitlements to injured motorists. Essentially, what the government is doing is saying that our CTP scheme as it currently stands—which is an at-fault scheme and will remain an at-fault scheme—is simply too expensive and, in the government's own words, is too generous. The government will argue the motorist is better off through the combination of the two changes, that is, a change to the CTP scheme that lists the threshold higher for the injuries to which you are going to get compensation for and to introduce the catastrophically injured lifetime care system.

We have not seen the actuarial advice on that, even though we have asked for it three times, so we have no option but to take the government's word on that. What they are doing is they are going to lift the threshold at which injured motorists, under the at-fault CTP scheme, will receive compensation or acceptance into the scheme and that saves the scheme money. It saves the scheme, as we understand it, around $100 per car registration a year. The government intends to introduce those changes on 1 July of this year. So the government's model is to introduce cuts to injured motorists and, therefore, a saving of $100 a year on 1 July this year.

Part of the legislation that provides the most benefit to the injured, that is, the catastrophic care part of the equation, they are delaying for another year until 1 July next year, and that also, of course, adds in the extra cost. The opposition's model is different. Our model is to bring in the changes to the CTP scheme at the same time as the government, on 1 July this year, and bring in the catastrophic care component on 1 October this year. That gives the government six months to set up the lifetime care authority and, frankly, you could do it a lot quicker than that, given that all you have to do is photocopy what is in New South Wales.

As we do in opposition, we have sought to consult on this matter, and we have had numerous meetings with the Law Society, the Bar Association and the Lawyers Alliance, while the green paper and the white paper are in circulation. Just prior to the final bill being tabled, the government apparently had struck a deal with the various law groups so that they are not, as I understand it, opposed to these particular measures.

As we do in opposition, we have sent out the bills to the various industry groups, and because of the short time frame the government have brought this bill on, remembering there was a public holiday in that, when groups do not work, oppositions do, but the industry groups do not. As of today's date we have not got the formal advice back from those industry groups either.

It would have been nice if the government had accepted our offer to debate this on 9 April, so that we might have had industry groups' feedback, we might have had the actuarial advice, and we might have had the answers to our questions about the bill prior to our party room debate. My view is that the minister's staff are not serving us well, but that is a matter for the minister and not me.

In fairness to those three law associations, my clear understanding from the public comments from the media, from the South Australian Law Society, the Lawyers Alliance and the Bar Association, is that they are in agreement with the government about the bill in principle. Whether there are technical matters about wording and interpretation that still need to be amended, I cannot advise the house because we have not received their formal advice.

We know particularly they were looking at some of the technical nature into the definition of injuries and what points are going to be allocated to what injury. They asked the opposition for the final copy. We asked and got the advice that, as of today, the government has still not resolved that particular matter, so that is not available to the law groups, the medical groups or, indeed, the opposition for purposes of the debate.

Just for clarity of the house, what I mean by that is that, under the catastrophic care system when you become catastrophically injured you are eligible to go into a scheme; so, there is a definition about what is 'catastrophically injured' and it's essentially severe brain, severe spinal, multiple amputations, severe burns—in broad description.

Then, under the compulsory third-party scheme, they are changing the Civil Liability Act. We might recall the government tried this on in another bill about changing the Civil Liability Act, which was defeated previously. I intend to look at the matter again between houses once I receive the advice from the various legal authorities and bodies about this particular matter. But, what they are doing is changing the Civil Liability Act, so instead of being a 60-point system that the court uses to define what style injury you have and where you fit in the compensation scale, if you like, the government are changing it to a 100-point system, but only for motor vehicle accidents.

So, what that means is that, if I injure myself diving off a jetty and I injure myself in a car accident and they are exactly the same injuries, I will be judged on two different point systems and they end up with two different compensation outcomes. I am going to seek further clarification both in committee and in between the houses about how exactly that might work and why we would have different compensation systems. That is the broad brush of this particular legislation.

A cynic might ask: if the cost of living was not such a political issue, would the government be moving to cut the entitlement to injured motorists to create the saving? The CTP scheme has been in place for decades and has not been touched to any significant degree. To my knowledge, other than this matter, there has not been a review of the Motor Accident Commission's operations to look at things like how their own approach to legal matters has added to the cost and whether there are ways to reduce the cost by changing the way the scheme is administered internally, rather than cutting the entitlements to injured motorists.

This government will go down in history as a Labor government that cut entitlements to injured motorists and, under the WorkCover legislation, to injured workers. This is a Labor government doing that; if a Liberal government had tried this approach, you could imagine the outcry from the government. The reality is that the government has got itself into such a political fix that the cost of living is front and centre on the political agenda, mainly through their mismanagement of the desal plant and water prices as the prime examples. From memory, I think water prices have gone up 249 per cent. The government's solution is to bring in this particular measure in regard to the compulsory third-party scheme.

The opposition is going to support the principle of the scheme and the bill because we think that offering better protection to the catastrophically injured is simply the right thing to do. I think the big question mark that still remains for this house and for state and federal governments is: what are you doing for people who are outside the motor vehicle accident scheme? What is the solution for the person who breaks their neck riding a horse or a pushbike and who is not covered by this scheme if a car is not involved? What about those people? My understanding is that about 20 people a year outside motor vehicle accidents, work accidents and medical accidents are catastrophically injured. That is the advice given to me by the government. The big question still remains: what happens to those 20 people a year?

I did ask the government a series of questions in the briefing and, as I say, I received these answers at 5.36 last night, I think it was, after our party room had finished. They have been emailed to my colleagues this morning so that they can be aware of them if they want to contribute to the debate or at least have a better understanding of the scheme. These were the questions I gave the government and the answers I have received, and I have a copy for Hansard if they do not want to follow my spoken word in this matter as it might be easier for them. The question is:

You asked for the number of South Australians who receive catastrophic injuries each year through accidents that are not caused by motor vehicles.

The government's response is:

A 2005 report of PricewaterhouseCoopers estimated that the annual number of catastrophic injuries in South Australia by cause was as follows: the motor vehicle injuries, 41; the workplace injuries, 5; medical, 6; and general, 20. PWC have updated the estimates of motor vehicle injury numbers for the modelling undertaken for the scheme's reforms...

The Productivity Commission in their 2011 Disability Care and Support Inquiry report provided estimates of the incremental costs of A National Injury Insurance Scheme (N.I.I.S.). Excluding motor vehicle injuries, the Commission estimates that, as at June 2011, the additional costs of care and support for those who suffer catastrophic injuries would be $43.1 million per annum in South Australia. This is the amount required to fund care and support to those who are not compensated. A no-fault NIIS scheme would also need to meet the costs of care and support to those who would have previously sought damages funded through the medical indemnity and public liability scheme.

It is unclear to me—I only received these last night, so I will be asking the minister questions during the committee stage—exactly what that means. My understanding from this answer is that 41 people a year in South Australia are injured in motor vehicle accidents, and those 41 people will be covered by this new catastrophic care scheme; that five people a year are catastrophically injured in workplace accidents, and they are covered through WorkCover and not part of this new scheme or, indeed, this debate; and that six people a year are catastrophically injured through medical incidents, which I assume is operations gone wrong and therefore they are covered through medical insurance and will not be part of this scheme. That leaves 20 people a year in South Australia who are not covered: they are horseriders, divers and swimmers, if you want to put it in that category.

This information is based on 2005 figures. What I cannot understand is why the government is introducing legislation in 2013 using eight-year-old figures. I find it staggering that there is not a more up-to-date figure; however, that is where we are. There are more up-to-date figures for motor vehicle accidents because they have come from MAC, but I understand the others are still based on the 2005 figures.

What I am not clear about then is the second part of the answer. The Productivity Commission states 'excluding motor vehicle injuries'. The commission estimated that at June 2011 the additional cost of care and support for those who suffer catastrophic injuries would be $43.1 million. I think what I am being told (and I will ask the minister to confirm this) is that the other 20 people—the divers, the horseback riders, the people who are not covered—if they were to be covered somehow, the cost would be $43.1 million a year. I think that is what it is saying, and I will be seeking clarification during the committee stage.

For those who are unclear, the difference between the National Disability Insurance Scheme (NDIS), as the commonwealth government calls it, and the National Injury Insurance Scheme (NIIS) is that the National Injury Insurance Scheme in simple terms is the catastrophic care scheme, the lifetime care authority. That is essentially the National Injury Insurance Scheme. The National Disability Insurance Scheme is a federal scheme that covers the disabled outside of the catastrophic care scheme. That is the difference. The second question, Mr Speaker, is: you asked for the total number of vehicle registrations and the total number of driver's licences. The answer came back that—

The SPEAKER: I did not actually ask for that.

The Hon. I.F. EVANS: Mr Speaker, I am actually quoting from a document which says 'you', as in me. This is a document from the government to me that I received last night, so to quote it accurately, Mr Speaker, the document states:

You asked for the total number of South Australian vehicle registrations and the total number of South Australian drivers licence holders.

The answer came back:

According to the CTP Scheme Actuaries, Brett & Watson Pty Ltd, the total number of vehicle registrations that include a CTP premium is 1,331,114 as at December 2012. According to statistics published at: http://www.sa.gov.au/subject/Transport%2C+travel+and+motoring/Transport+facts+and+figures/Registration+and+licensing+statistics as at December 2012 there was:

a total of 1,658,333 vehicle registrations in South Australia (includes vehicles that do not pay CTP Premiums such as trailers).

a total of 1,167,323 licence holders, holding a total of 1,337,471 currently active licences.

The document goes on to state:

You asked what happens for the year between the Civil Liability Act changes and the LSS Act [changes]—

which is the Lifetime Care Act changes—

coming into force?

Once the amendments to the Civil Liability Act come into effect, motor vehicle accident victims with catastrophic injuries who can establish that someone else's fault caused or contributed to the accident will continue to receive tort law damages for all heads of damage in accordance with the amended provisions about the quantum of damages.

In other words, in simple terms, the current scheme continues for the interim. It continues:

Once the LSS Act commences the catastrophically injured person could, if he or she wishes, apply to be accepted as a participant in the Lifetime Support Scheme upon payment of a contribution determined by the Lifetime Support Authority: section 6 of the Bill.

In the intervening period the Lifetime Support Authority will be created as a legal entity and systems will be established to allow it to commence providing services once the Act comes into force.

That just raises one aspect of the bill which I did not explain in my earlier contribution. For those people who are catastrophically injured prior to the lifetime care authority system being established and up and running—someone catastrophically injured today, for instance—they will be able to go to the lifetime care authority and make application and prove that they meet the catastrophic injury threshold, and then the lifetime care authority will make a calculation of their lifetime costs of care (and that will vary of course depending on injury, age and environment) and work out a figure and then say to that injured person, 'Well, if you pay us X you'll be accepted into the scheme.'

What might happen is that a whole range of communities gather around people in this position to raise enough money to buy them into the scheme; that may well be the outcome. We support that and have no objection to that concept; that, subject to a proper analysis of their costs, they should be able to buy into the scheme.

Even under this proposal, under different provisions in the bill, if people are injured in workplace accidents WorkCover will also be able to go to the scheme and there will be a similar process. It may well be that the individuals concerned think that they might be better served under this new scheme than the WorkCover scheme, and there is a process where, as I understand it, they can buy in, so the scheme is flexible to that point. The document continues:

You asked if any other jurisdictions have a discount such as our proposed 20% discount on damages for economic losses.

Most jurisdictions have some statutory limitation on damages for economic loss, for example:

The Victorian scheme will not cover the first 5 days off work, and then will pay 80% of weekly earnings up to a maximum of $1170 per week. Future loss of earning capacity is paid at a maximum of $991. Victoria also has a range of durations for payment of income replacement, based on injury severity;

The Queensland scheme pays out income loss at a maximum of 3 times Average weekly earnings;

The NSW scheme caps economic loss benefits at a maximum of $4236 per week;

The Tasmanian scheme will not cover the first 7 days off work, and then will pay 80% of pre-injury wages up to a maximum of 3 times Average Weekly earnings, for a maximum 5 years.

Under the current South Australian scheme damages for loss of earning capacity are not awarded for the first week of incapacity and total damages are not to exceed a prescribed amount. The prescribed maximum was originally $2.2 million but is CPI indexed annually and is now $3.0 million Any damages awarded for loss of future earnings or other future losses are discounted by 5%. This is required by sections 54 and 55 of the Civil Liability Act.

The reason we asked that question is that, as part of the changes to the scheme, to make the scheme more affordable, the government is proposing a further discounting by 20 per cent on the damages paid for economic loss. If the house wants to get a better understanding of this issue, there will be some questions about that in the committee stage but, essentially, in regard to economic loss, the person injured makes a claim for economic loss and the instructions by the legislation to the court are that there is basically a double discount: one of 5 per cent and then a further one of 20 per cent, as a way of containing costs to the scheme.

The reason I asked whether any other schemes had a similar amount of discount was because I wanted to know roughly where our scheme sat in relation to how generous or ungenerous the scheme was. The document goes on to the next question we asked:

You asked whether the nominal defendant or Motor Accident Commission can recover from the owner and driver of an uninsured vehicle jointly and severally under the current legislation? You also asked about the nominal defendant.

The Nominal Defendant is a person appointed by notice published in the Gazette by the Minister to whom administration the Motor Vehicles Act 1959 is committed (section 116A of the Motor Vehicles Act). 'The Nominal Defendant' is the name used as the defendant's name when a person sues for damages for personal injuries alleged to have resulted from a motor vehicle accident when (a) the identity of the driver of another motor vehicle alleged to have been involved in a motor vehicle accident is not known and cannot be found upon due inquiry (section 115 of the Motor Vehicles Act); or (b) a motor vehicle alleged to be involved in a motor vehicle accident is not insured as required by the Act (section 116 of the Motor Vehicles Act). Any damages agreed or awarded to the plaintiff are paid out of the compulsory third party insurance fund.

Recovery

The answer to your question is yes, in some circumstances.

I will remind you of the question: whether the nominal defendant or the Motor Accident Commission can recover from the owner and the driver of an uninsured vehicle jointly and severally under the current legislation. The answer is yes, in some circumstances.

The compulsory policy of insurance set out in Schedule 4 of the Motor Vehicles Act insures owners, drivers and passengers. The policy includes several warranties by the registered owner. These include that 'The owner of the vehicle warrants that no other person will, with his or her knowledge or consent (which will be presumed in any proceedings in the absence of proof to the contrary) drive or use the vehicle, or do or omit to do anything in relation to the vehicle, contrary to any of the paragraphs of clause 2'. Clause 2 includes things like driving a vehicle that is overloaded or unsafe or unroadworthy or in a damaged condition or driving when not licensed to drive or driving while intoxicated.

Nowhere does it mention unregistered in that answer.

Section 124A of the Act gives the approved insurer (i.e. Motor Accident Commission) a right to recover from the insured person, which includes the owner and driver, any money that is paid or costs that has incurred in relation to a claim in certain circumstances. The circumstances include, among other things, breach of the insurance warranty by the owner of the vehicle that prejudices the insurer. The Court is to decide the amount that is just and reasonable for the Motor Accident Commission to recover from the owner or driver.

Section 116 of the Motor Vehicles Act gives the nominal defendant a right of recovery against the driver or a person liable in respect of the acts or omissions of the driver if the driver of an uninsured vehicle is wholly or partly to blame for the accident.

The Lifetime Support Authority would have the right to recover against the owner or the driver or both if the injury was caused: (a) by the fault of the owner or driver of the vehicle, and—

so if it is the fault of the driver they can still claim against the owner—

(b) the vehicle is uninsured.

So, if the vehicle is uninsured the Lifetime Care Authority is going to have the capacity to claim against the owner and the driver of the vehicle.

However, an owner will not be liable if the owner establishes that another person was driving without the owner's consent. A driver will not be liable if he or she establishes that he or she was driving with the authority of the owner or had reasonable grounds for believing and did believe that he or she was authorised by the owner. See clause 45, which is modelled on the Motor Accidents (Lifetime Care Support) Act 2006 (NSW).

In addition, clause 46 of the Motor Vehicle Accidents (Lifetime Support Scheme) Bill 2013 would give the authority the same rights of recovery as the Motor Accident Commission and the nominal defendant under sections 116 and 124A of the Motor Vehicles Act.

The next question I asked was:

You asked what checks and balances are in the bill to ensure that the LSS—

which is the lifetime care authority, as I call it—

is fully funded and the costs of the services provided by the LSS will be contained.

The reason I asked this question is it is an interesting long-term issue for the parliament to consider. The way this lifetime care authority is going to work is that it will get actuarial advice about the lifetime cost of the scheme. They then get a recommendation from the actuary, the actuary makes a recommendation to the authority to say that the levy needs to be X to fully fund it, then the authority recommends to the minister and the minister can sign off on the levy at whatever rate the minister wants.

From memory, there is a process that if the minister goes against the recommendation he has to table it in the house. I made the point to the people giving me the brief that I think the timing of all that allows a minister to set a low levy before the election and table the document after the election; so, they get all the benefit before the election and the criticism after the election, but that is the process, as such.

Come back to the cost of the scheme. This scheme is going to provide the care and medical requirements of the scheme and the medical costs are—in part, at least, a substantial part—set by an agreement between the health minister and the lifetime care authority. There is a whole range of charges that they are going to establish. So the question I asked is: given that the scheme is going to be 100 per cent funded, where is the control of costs? Can the Minister for Health set costs that mean the health department makes a profit, a surplus, out of the scheme?

If the scheme is set up so that the motorist is to pay to fully fund the scheme, and the scheme then oversees the cost, who oversights the issue of trying to keep that levy as low as possible to meet the needs but without unfairly burdening the motorist? The question is about the control of the medical costs, when government is essentially signing off with government about the costs. In relation to the answers to those questions, the answer was:

Numbers of participants. You asked how the number of participants in the scheme was estimated and whether the cost of the levy would rise significantly for the year after a single major incident.

For instance, a bus turns over and 25 people somehow are catastrophically injured in the one incident: how does the setting of the levy work? The document continues:

The answer is that allowances have been made in the modelling to guard against such an occurrence.

That may well be true but, of course, the opposition has not been provided with the modelling. It continues:

PricewaterhouseCoopers have provided the costings for the Lifetime Support Scheme. They have estimated 37 participants per annum, based on:

comparisons of the incidence of serious injuries in [New South Wales] and South Australia;

the assumed numbers of claims in the [New South Wales] Lifetime Care and Support Scheme...;

identification of numbers of catastrophic injuries in the current fault-based scheme.

The document later states:

A number of other statistical sources

In the existing fault-based CTP scheme, an average of 14.2 claims per annum were identified for the period 1 January 2006 to 30 June 2010. Numbers varied between 11 and 20 a year. The [New South Wales Life Time Care Support Scheme] experience is that claims are split around 50-50 between at-fault and not-at-fault. [PricewaterhouseCoopers] concluded that this might indicate a degree of conservatism in their estimate of 37 per annum.

The modelling also includes an allowance for the costs of reinsurance which would include reinsurance against a large event that caused multiple injuries. Injuries caused by a terrorist act would not be covered by the scheme.

Costs: section 27 of the bill requires that the lifetime support authority 'pay for all necessary and reasonable expenses' in relation to 'the assessed treatment care support needs of participants'. 'Treatment, care and support needs' is defined under section 4 of the bill. Those needs must be related to motor vehicle accidents. I will come back to this in a second.

The LSS rules—which is the South Australian scheme—will establish detailed criteria regarding what will be considered necessary and reasonable in the circumstances, and set monetary and other limits where appropriate. The LSS rules are made by the Governor, on recommendation of the authority—not the minister, not the cabinet, but by the authority—and must be laid before both houses of parliament, and are subject to disallowance. So, it seems we have a rather unique situation where the authority will be going to the Governor recommending the rules, and the parliament will have the opportunity to disallow them, but not the cabinet.

According to section 16 of the bill, the lifetime support authority must keep the LSS rules under review and provide advice to the minister as to the efficiency and effectiveness of the scheme. Ultimately, the minister, the government of the day, and the parliament in relation to making of the rules, will need to strike the appropriate balance between the needs of the people with catastrophic injuries and the motorists who fund the scheme.

Funding provisions in the bill: section 43 of the bill requires that the authority determine an amount that is required to be contributed to the fund to cover the present and likely future liabilities of the authority, and to meet other payments from the fund. The authority's determination must be made in accordance with the report of an independent actuary. The minister may impose in relation to the authority determination by a notice in the Gazette. The minister is also able to make the determination of the required fund contribution but, where his or her determination is inconsistent with the authority's determination, then the authority must include a report of this matter in its annual report, and I will come back to that in a second.

The government considers that, ultimately, it should be able to determine the amounts contributed to the scheme by the motorists, but that this must be informed by independent advice from the authority, and an independent actuary, subject to making transparent decisions which depart from the independent advice where the levy announcements are made in advance of the release of the authority's annual report. The responsible minister will be able to be questioned in parliament regarding the basis of any such levy setting arrangement and it is the government's intention that the scheme should operate on a fully-funded basis, and to be costed on this basis.

That answer covers a couple of topics that I want to go back to and examine a bit more. We have not seen the scheme's rules that set out the level of care, the length of care, and the type of care that is going to be covered by this scheme. The scheme pays for all necessary and reasonable expenses. Each of those can be contested: what is reasonable and what is necessary? There is a process of review for the applicant—the person who is catastrophically injured—which is at no cost for them. The scheme pays for the review, and then if they are not happy with that, they can go to the court. From memory, when it goes to court, the applicant has to cover their own costs at that point, but the initial independent review set up by the authority is at no cost to the applicant. They can have reviews about what is necessary and what is reasonable care?

The necessary and reasonable care is about the extra care needed as a result of the injury. It is not about any pre-existing injury or pre-existing condition or pre-existing circumstance. What is necessary and what is reasonable; those questions are asked by the authority as a result of the accident. There are clauses within the provision in the bill that deal with gratuitous services—that is, people volunteering to help—and I will deal with that in the committee stage. From memory, there is a six-hour provision over a six-month period in relation to gratuitous services and whether they will be paid and at what rate, but again I will come to the detail of that in the committee stage.

The people covered by the scheme have the right to contest it and appeal through the court if they think they are not getting reasonable or necessary care. The care may include things like home renovations that are necessary, or indeed workplace renovations that are necessary, so that the person can lead a normal life as far as practicable. It may well be that the scheme needs to pay some of those costs that are reasonable and necessary.

In relation to the funding provisions, I guess that answer highlights the point I made earlier that, while the government says they want this scheme fully funded, the reality is the process they have set in place does not guarantee that. It only really says that the government has a policy that it is going to be fully funded. Well, the government has a policy about WorkCover being fully funded and it is not within a bull's roar. In fact, one of the cynics quipped that maybe once this is up and running WorkCover could apply to become part of the scheme.

The issue also becomes that if the minister does not accept the actuarial advice given to the authority then recommended through to the minister, it is not the minister who has to report it to the parliament. It is tucked away in the annual report which is tabled in the house, if it is on time, in late September. The elections are always in March, so the decision can be taken in February or March to announce a cut to the lifetime care authority levy rate and it is not until six months later that we would get the opportunity to question the minister about the matter in the parliament. As we all know, just because you ask a question, it does not necessarily mean you get an answer that would be helpful to your cause.

In the bill there are a series of opportunities for the person who was catastrophically injured or indeed their representative, guardian, etc. to make applications for reviews, and I will cover this more in committee. We asked the question: is there anything preventing the charging of application fees? For instance, could the authority have an application fee to join the scheme? Could the authority have an application fee for a review or an application fee about court processes? The answer is that there is no provision in the bill authorising the charging of application fees, but—and I will test the minister in committee—I do not think there is a clause preventing it either.

The government's bill charges stamp duty on the levy at the rate of 11 per cent. We asked whether there was GST on the stamp duty. The answer is:

A general question was raised as to whether GST applied to stamp duty. Under section 78.5 of the A New Tax System (Goods and Services Tax) Act 1999 the value of a taxable supply of an insurance policy is worked out as if the price of the supply were reduced by the amount of any stamp duty payable under a State law or Territory law in respect of supply.

The Lifetime Support Scheme is not being established as an insurance scheme. The levy that funds the scheme is intended to be structured so that it does not attract GST—

and that is going to be 'subject to an ATO ruling'. We asked about the commitment to the National Disability Insurance Scheme (NDIS) and the National Injury Insurance Scheme (NIIS), trying to get clarity around what has been decided and what has not. The answer to the question was that COAG signed an intergovernmental agreement for the National Disability Insurance Scheme launch in December 2012. It states:

This agreement covers the period of the launch. All parties have agreed to continue work on the policy for the full NDIS scheme.

I interrupt the answer here to say that the COAG agreement simply covers the time at the period of the launch. The intergovernmental agreement on the NDIS launch contains a number of commitments in relation to a national injury insurance scheme, the NIIS. In simple terms, I am calling that the catastrophic care scheme. The answer continues:

All States endeavour to agree minimum benchmarks to provide no-fault, lifetime care and support for people who are catastrophically injured in motor vehicle accidents prior to the commencement of the NDIS launch. The Federal Government has now written to jurisdictions seeking formal agreement, responses have been requested by the end of March.

If a host jurisdiction is unable to implement minimum benchmarks prior to or during launch, that host jurisdiction will be responsible for 100 per cent of the cost of participants in the NDIS who are in the NDIS because they are not covered by an existing or new injury insurance scheme that meets the minimum motor vehicle benchmarks.

I will come back to this in a minute. It continues:

All jurisdictions endeavour to agree minimum benchmarks to provide no-fault, lifetime care and support for people who are catastrophically injured through workplace accidents, medical accidences, criminal and general accidents (occurring in the home or the community) by the commencement of the NDIS full scheme. The timeframes for this work is currently being considered by the Heads of Treasuries.

Noting that a new Agreement will be agreed with all jurisdictions for the NDIS full scheme, the Commonwealth's position is that on commencement of the NDIS full scheme individual jurisdictions will be responsible for 100 per cent of the cost of participants in the NDIS who are in the NDIS because they are not covered by an existing or new injury insurance scheme that meets the minimum benchmarks for motor vehicle accidents, workplace accidents, medical accidents, and criminal and general accidents (occurring in the home or the community).

What that means, as I understand it, is this: the federal government and the state government have agreed to set up this National Disability Insurance Scheme trial in South Australia and, indeed, a number of other states. In South Australia, the trial for the National Disability Insurance Scheme is for children, and the agreement is that, if the government has not put in place a lifetime care authority for a no-fault insurance scheme for the catastrophically injured involved in motor vehicle accidents by the time the trial for the National Disability Insurance Scheme is set to start, the commonwealth government is not going to pay the costs of the national disability scheme trial. That will be a hit to the state budget. From memory, the trial was $20 million. I might have that figure wrong, but it was certainly a substantial number.

So, what the Gillard government is saying is that, unless the state parliament sets up this lifetime care authority system, it intends not to honour its agreement to fund the National Disability Insurance Scheme trial for children in South Australia; it is going to make the state government pay for it. That is how I understand that answer.

Secondly, it also makes this point: that in the future, when the NDIS full scheme comes into play, whenever that is, if there are other people who are outside the motor vehicle accident lifetime care scheme we are debating today—these are the horseriders, the bike riders, the jetty divers—not covered by a similar scheme, the host jurisdiction (South Australia) will be responsible for 100 per cent of the cost of participants in the NDIS who are in the NDIS because they are not covered by the existing or the new injury scheme. The way I understand that is that the federal government is going to charge us for the horseriders, the divers and the footballers who are injured by breaking their neck and who are not part of this scheme.

What you are going to have is catastrophically-injured people under WorkCover cared for by South Australia, catastrophically-injured people injured in motor vehicle accidents cared for by South Australia, people catastrophically injured through medical accidents covered by South Australia, and people who are injured on horseback, diving off jetties, or in any other way, are somehow covered by the commonwealth and we will be charged for it. So the question comes: will they be better off, and will it be cheaper for the South Australian taxpayer, if they are under our scheme? Would the approximately 20 people a year I referred to earlier who missed out on all these schemes be better off under our scheme?

Have the actuaries been asked that question, and if so, what is the advice? We do not know; we have not seen it. What is crystal clear is that either we set a scheme up ourselves and pay for it or we are going to be charged by the commonwealth to pay for it, so at some point down the track, the South Australian community is going to pay for it. It is a matter of how we are going to pay for it and when that kicks in. I will ask the minister this and he might want to answer: when does the National Disability Insurance Scheme kick in for everyone? I do not think a date has been set. This could be four, five, 10 years away, while those 20 people who are catastrophically injured simply have no cover.

The other question I asked was when the final ISV table will be available. The ISV table is the table that is still being negotiated. I understand they are using a table from the Queensland scheme, where they set out essentially the points structure for the type of injury you might have. If you drop a brick on your toe, you might be one point; if you break your neck it is 99 points. In between that, a table has been developed about an agreed points structure that guides the court to deliver the outcome the government wants. It is a way of controlling costs, if you like.

Under non-motor vehicle accidents, under the Civil Liability Act, there is a 60-point system and there is going to be a 100-point system. The reason I asked for the ISV table is that the law groups believe that is the key to the way the whole scheme works. Their view as I understand it is, how do you judge whether the scheme is fair if you do not know where the injury is going to land on the points system? They asked us to try to get a copy of this ISV table, and the answer is:

The ISV table that was released with the White Paper in November was based on the Queensland table with modifications made to enable a 15 point threshold for some heads of damages.

The way I understand that is you have to get past the 15 points before you come into the scheme.

Since then, consultation has been occurring with the South Australian medical specialists to adapt the table where they think necessary to a South Australian context.

The way I understand that is that apparently South Australia has a different way of interpreting some injuries and their impact from Queensland and we are going to adjust the ISV tables to South Australianise, if you like, the points and the injuries.

As a consequence of the consultation with the Legal Professional Associations the points thresholds for heads of damages has changed—

how they have changed, I am not sure—

and further medical advice is being sought to further ensure clarity around the thresholds. Once that consultation is complete—

here we are debating the legislation and the consultation is still not complete—

the final table will be made available as regulations to be laid before Parliament once the legislation has passed. It is anticipated that the consultation be concluded in the next few weeks.

In other words, the points table that the law groups think is central to the argument will not be completed until the law is passed. I think that is the wrong process, but I cannot change that. I think it does take away our capacity to make real judgement about that issue if we do not have the information before us. I asked them to analyse for me all the claims made by Senator Xenophon in a Sunday Mail article about this particular issue. The paper says:

You asked for an analysis of each of the claims made by Senator the Hon. Nick Xenophon in his Sunday Mail opinion piece of the 10 March 2013.

The reason I am going to put this on the record is that I know that members of parliament are going to get letters as a result of Mr Xenophon's questions, and members will be able to say that that question was asked in the parliament and here is the actual circumstance, as per the legislation that the government have advised. So, the members of parliament can at least show that they have taken that matter up and followed the issue through. The answer goes on:

Below are each of the claims made by the Senator and an analysis of these. The answers provided relate to the Injury Scale Value (ISV) Table which was published on the website in conjunction with the White Paper [which] is currently undergoing consultation.

In other words, the answers we are being given are being given based on the injury scale value that we are not going to use because the consultation is not yet finished. So, while the answers give us some guidance, I think members need to be aware that the answers that we are being given are based on injury scale values that the government are not going to use, as they are still out for consultation. The answer highlights:

Some of the categories may change in the final table.

The first claim from Senator Xenophon is:

You won't get a cent for pain and suffering if your skull is fractured and you have 'minimal brain damage'.

The analysis is:

There is an entitlement for damages for future loss for any level of brain injury as defined in the ISV table. However, if the brain injury is so minor and fully resolves, it is classified as a minor head injury. It is this category that is referred to in the article.

The claim appears to be in reference to Item 9: Minor head injury, other than a skeletal injury of the facial area (0-5 points). It features—'Uncomplicated skull fracture' or other injuries 'from which the person fully recovers within a few weeks'; or at worst, 'associated concussive symptoms which last less than 6 months.

Note: It is important to understand that the minimal brain damage referred to in this category is usually the result of concussive effects with or without an uncomplicated skull fracture. Post concussive symptoms are generally headaches and reduced concentration for a limited that resolve.

I think there is a word missing there. I think it is 'for a limited time that resolve' but it says 'for a limited that resolve'.

Therefore, a person with this injury would receive compensation for all medical/treatment costs and have an entitlement to compensation for lost wages/income.

By definition, one would not be entitled to damages for future losses for a minor injury that resolves (that is for example for pain and suffering) as there is no permanent impairment.

However, where there are 'minor problems persisting that prevent a restoration of normal function.' a person would generally align with the next Injury severity (item 8: Minor Brain Injury (6-20 [points])) whereby there is an entitlement for future loss.

I guess this just highlights why having this point system finalised prior to the debate might have actually been useful for the house. The second claim by Mr Xenophon was:

You won't get a cent for pain and suffering for many types of permanent facial scarring.

The analysis response is:

This claim appears to be a reference to:

Item 22: minor facial scarring (0-5 points), which features 'a single scar able to be camouflaged,' 'almost invisible linear scarring' or whereby small scars occur the overall effect of the scars is to mar, but not markedly to affect, appearance and an adverse psychological reaction is minor'...;A person with this injury would be eligible to receive all medical/treatment costs and an entitlement to past income loss if applicable. They would not be eligible to receive compensation for non-economic loss (pain and suffering).

Or, item 21: moderate facial scaring (6-10 points) which features 'scarring, the worst effects of which will be reduced by plastic surgery that will leave minor cosmetic damage', and 'any adverse psychological reaction is small or having been considerable at the outset, has greatly diminished.'

If the injuries are assessed at more than 7 [that is, 7 points] then they will be eligible for medical/treatment costs and past income loss, as well as damages for any loss or impairment of future earning capacity as a result of the injuries. They would not be entitled to damages for non-economic loss.

This brings in the question of whether, if the injury scores above seven, or seven and below, apparently that particular matter as to where the threshold kicks in was part of the negotiation with the various law groups. Why pick seven and not eight; why pick seven and not 10 has not been made clear, but essentially seven is the threshold point for a number of these claims. Claim 3 might be of interest to some of the male members in the house. Mr Xenophon claims:

For blokes out there, losing both of your testicles could mean zero compo, and definitely nothing if you only lose one.

The Hon. L.R. Breuer interjecting:

The Hon. I.F. EVANS: That has sparked the interest of the member for Giles. It is something she is trying to come to grips with as part of the argument. The analysis answer is this:

This claim appears to be a reference to Item 45: Loss of both testicles (5-37 points) and Item 46: Loss of 1 testicle (2-10 points).

It is a theoretical possibility that no compensation for future losses is payable, although there is compensation payable for past losses (i.e. up until the claim is settled). However, it is not anticipated that any claimant will not be compensated for future losses given the range from 5 to 37 points. Loss of one testicle will entitle the injured person to medical/treatment costs and past income loss, and could entitle loss of future earning capacity compensation.

The question I ask is: if a young male loses his capacity to father a child, is he compensated for the loss of that ability? I would ask the minister to put that on the record, because I think that, while the injury itself is severe, for a young married guy or a young person with their family years ahead of them to lose the capacity to father a child, the scheme might need to properly deal with that issue. The next claim from Mr Xenophon was:

If you've sustained a so-called 'minor' bowel or bladder injury with long-term effects, you could probably forget about any damages for that, too.

The analysis answer is:

This claim appears to be a reference to Item 67: Minor Bowel Injury (3-6 points) and Item 71: Minor Bladder Injury (3-6 points). These item descriptors in the ISV table are being revised as a result of the consultation because it contains a drafting error. This item description currently states that there will be minimal ongoing problems under the minor severity category, while the next severity category states that there will be no ongoing problems. The table will be altered to make it clear that Item 67 refers to injuries that have no ongoing sequelae.

The next claim by Mr Xenophon is:

You'll also cop it in the neck if your spine is injured. Even if you have a crush injury, you may still miss out.

The answer is:

A spinal crush injury may be classified as extreme, serious or moderate. A moderate spinal (crush) injury is accommodated within Item 80: Moderate Cervical Spine Injury—fracture, disc prolapse or nerveroot compression or damage which has a point range of 5-15 points. This item, allows for the injury to be assessed as being of a severity above 10 points and thereby the injured person is eligible for damages for non-economic loss (pain and suffering) and for loss of future earning capacity, as well as for past losses. The impact of the injury on the injured person's life will be taken into account when determining the point level of the injury.

However, a soft tissue injury with objective evidence but no radiological evidence (include the injury known as whiplash) will fall under Item 81: Moderate Cervical Spine Injury—soft tissue (5-10). A person may be eligible to receive damages for loss of future earning capacity in addition to the medical/treatment costs and lost income.

Where there is no objective evidence then Item 82: Minor Cervical Spine Injury (0-4) applies and a person remains eligible for compensation for medical/treatment costs and lost income. A person would not be entitled to receive non-economic loss for injuries falling under items 81 and 82.

The next claim by Mr Xenophon is:

If you are a chef or winemaker and you partially lose your sense of taste or smell, you can't get more than 5 points, even though you'll be stuffed trying to continue your job.

The answer provided is:

Under Item 35: Partial loss of smell or taste, or both, a person with this injury would only be eligible to claim for damages for medical/treatment costs, and past loss of income. This item is under review as a consequence of the consultation.

I cannot tell you what the answer is, but it is being reviewed. The next claim by Mr Xenophon is:

If you are doing hard physical work, a shoulder injury that knocks you out for up to 18 months with "considerable pain" will also get you zip for your loss of wages.

The answer is:

This claim appears to be a reference to Item 91: Minor shoulder injury (0-5)—Its features are a soft tissue injury with considerable pain from which the injured person "makes an almost full recovery in less than 18 months"; or a "fracture from which the injured person has made an uncomplicated recovery".

A person with this injury will be eligible to claim for past loss of income, and medical/treatment costs. As the injury has fully or almost fully recovered in 18 months, the claimant would not be entitled to damages for future losses. This item is under review.

That is as a result of the consultation. That was the end of Mr Xenophon's questions. I asked, 'How long does a worker get paid under the WR&C Act?' This particular question relates to how payments under this scheme compared to payments under WorkCover. The answer is:

Under the section 35 of the Workers Rehabilitation and Compensation Act 1986 an eligible injured person may receive weekly payments up and until they turn 65 years of age. If they are over 63 they will receive two years.

Medical costs continued to be paid, as long as the injury is assessed to be reasonable throughout the lifetime of the injured person.

'How much money will be needed for the set up costs for the LS Authority?' is my next question, and the answer provided was:

Prior to the eligible intake date of 1 July 2014 it is anticipated that the main costs will be associated with:

establishing the legal entity and the Board;

employing and accommodating staff up to three months prior to operations commencing (estimated 6 FTEs);

establishing an appropriate information technology system.

The upfront costs could amount to $400,000 plus the information technology system which would be paid for over time from the Levy. It is anticipated that these start-up costs will be loaned to the Authority and will later be paid from the fund.

In other words, there is a $400,000 cost to establish it. Because the scheme has no money until the levy is collected, the Treasurer will lend the money and the fund will then pay back the Treasurer, at some point, that $400,000. I asked about actuarial advice as follows:

Actuarial advice regarding the costings underpinning the Bills has been requested through the Economic and Finance Committee.

That was subject to my very early comments in this debate. Mr Speaker, you were on the Economic and Finance Committee I think at the time when we requested this information, and you will be pleased to know that the response was:

The information will be provided to the committee shortly.

May I suggest, Mr Speaker, that that will be available to the committee after this bill has passed this house. Thanks a lot. I asked the question:

You referred to section 27(1) of the bill and asked whether a participant in the Lifetime Support Scheme would have to pay for services and goods before the Authority would have to pay for them.

In other words, my question relates to the fact that it talks about them paying for the costs that have been incurred in reasonable care and necessary care. The word 'incurred' seems to indicate that the claimant, the person under the scheme, would have to pay the costs then seek reimbursement, otherwise why would they be paying costs that are incurred?

Under the scheme there is an arrangement whereby they can come to an agreement with the person in this scheme about the payment of certain future costs, and I am assuming that is how most of the transactions will occur. However, the answer from the government is:

This provision of the Bill is identical with section 11A(1) of the New South Wales Motor Accident (Lifetime Care and Support) Act 2006. The previous version of the provision of the New South Wales Act was section 6(1) and the words that are relevant to your question are the same. The Court of Appeal of the Supreme Court of New South Wales has interpreted this provision in a case about payment for gratuitous care provided by a relative in the case of Daly v Thiering [2013] NSWCA 25 (20 February 2013). The Court treated the words 'expenses incurred' as meaning expenses that the participant has met or is legally obliged to meet. It follows from this that the participant does not have to pay first.

In addition, section 27 of the Bill provides for agreements between the Authority and the participant under which the Authority could pay money in advance to the participant to cover expenses of assessed needs for a period of time.

The way I understand that answer that has now been given is that there is a court case out of New South Wales that means that, if the scheme is obligated to pay it under the scheme, the expense does not have to be incurred first. As a process which is allowed under the bill the authority will be able to make an agreement with the injured party about certain costs they are going to pay in advance. So, that gives some detail on the background both as to the changes to the compulsory third party scheme and also the setting up of this new lifetime support authority.

There are a number of changes which I will be examining in the committee stage of the bill. Of particular interest is the way that the government is changing the way that damages are assessed. I should make the point that in the lifetime care authority scheme you can be a permanent member of the scheme or you can be a temporary member of the scheme. It is possible for you to go to the scheme and say, 'Look, all the medical advice is that for six or seven years I am going to be, in effect, catastrophically injured,' and then through treatment or medical procedure you then recover to a point where you no longer have to be in that scheme and you can exit out of the scheme. So there will be the capacity to be defined as a permanent member of the scheme and a temporary member of the scheme.

The bill also makes changes to the way in which the quantum of damages is assessed. The government says it is going to be a more methodical approach, with greater rigour in the assessment of these damages. This is government talk for, 'The courts aren't doing what they're told, so we are going to try to redefine it and narrow down the language so that the courts do not give such generous findings for those people who seek damages.' The second reading speech explains it this way:

The courts will take into account the usual discount for the vicissitudes of life, but would be required to not take into account anything that has less than a 20 per cent chance of occurring and anything for which the court cannot evaluate the chance of it occurring.

As the parliament knows, I am no lawyer—I am just a humble builder—but the way I understand this is that currently the court, in looking at damages, takes into consideration anything that might occur in the future, regardless of its chance.

So, if there is a 1 per cent chance that the injured person might have become a brain surgeon, for example, the court feeds that into its assessment of the level of damages that person might get. The government is now saying, 'No, if it's less than 20 per cent, the court doesn't count that.' So, if you had a 15 per cent chance of becoming an AFL footballer, bad luck: you need to get to a 21 per cent chance. It is trying to reduce the damages payment.

It also cannot take into account anything the court cannot evaluate. If the court cannot properly evaluate whether you are going to reach or might have reached a certain potential in life, they simply can put no value on that at all—no value on that at all. What happens then, once the court reaches a figure, given that they have already tightened the assessment of damages and contracted that by 20 per cent, the court applies a further 5 per cent discount because the participant is going to get that cheque up-front.

They are going to get $100,000, $120,000, or whatever the figure is going to be, up-front, and so the court automatically under the legislation discounts whatever the payment was going to be by 5 per cent—and my understanding is this 5 per cent discount currently exists. The previous 20 per cent discount I talked about did not exist, but this 5 per cent discount already exists. The court goes on to make other deductions required by the act of common law. For example, in contributory negligence, if you somehow contributed to your own injury (this is under the CTP scheme), then ultimately there is a further discount there.

After all that—after contracting eligibility by 20 per cent, by taking off 5 per cent because you got a cash up-front payment, by then adjusting it or minimising it because you have contributory negligence—just for good measure they are then going to discount it by a further 20 per cent. And the reason for that? There is not one given, but my understanding is that the reason they are doing it (and this is not given in the second reading speech) is simply to make the scheme affordable.

In the government's own language, the scheme is unaffordable and too generous to the injured and the government want to make it less generous. What they are essentially doing is capping the cost of the scheme by capping the number of injured people who can come into the scheme because they are lifting the injury threshold to a new point. Not only are they doing that but they are discounting the damages that injured motorists are going to get as a result of these accidents. That is how they are driving down the cost of the scheme. As I said earlier, this must be the only Labor government in history that has cut entitlements to injured workers and entitlements to injured motorists.

The bill will also introduce a rather unique measure, which I understand is on the recommendation of the RAA, which is no-fault compensation for medical and ongoing care costs for children who are under the age of 16 at the time of the accident. As a result we will have a split scheme. For those over 16 you are going to have an at-fault scheme and for those under 16 you are going to have a no-fault scheme within the compulsory third-party scheme. The government claims this provision will ensure that children will receive immediate support for their medical care needs following a vehicle accident without having to determine fault or contributory negligence. The government claims this will lead to better recovery and health outcomes.

The bill also sets out new provisions for medical assessment and the accreditation process for CTP insurance claims. These are intended to reduce bias, avoid excess numbers of costly reports, and increase quality and objectivity of the assessments. They will be dealt with through regulations ultimately and therefore disallowable by the house.

The other way that they are cutting the cost of the scheme is to cap lawyers' costs or at least to restrict lawyers' costs compared to what they are under the current scheme, and I have no doubt that is one of the reasons why many lawyers were up in arms over the issue, not just on the basis of the principle of compensation to injured motorists but also on the basis of the impact on law firms. We have already had some law firms write to us saying they expect to lay off 20 to 30 staff as a result of the reforms proposed under this legislation, so there will be an employment impact throughout the legal fraternity based on the letters we have received.

The way they are going to cap the lawyers' costs is that the bill provides that no costs will be awarded if the amount of damages awarded is $25,000 or less and they will be capped at the Magistrates Court's scale if the award is between $25,000 and $100,000, regardless of the court in which the proceedings are issued. If it is under $25,000, no legal costs at all. If it is between $25,000 and $100,000 you are going to get the Magistrates Court's scheduled fee, whatever that is, regardless of whether you are in the Supreme Court or another higher court; it doesn't matter.

The government claims that results of the reforms will be monitored and, if the CTP insurance premiums exceed a prescribed percentage of state average weekly earnings, the minister would be required by the bill to have part 4 of the Motor Vehicles Act reviewed and a report laid before both houses of parliament. It does not tell us what the prescribed percentage is going to be, so I am assuming what they are saying there is that, if the CTP insurance premium gets above a certain percentage of the average wages throughout the state, that would trigger a review on the basis that the scheme might be becoming unaffordable. I think that is what it means. One might question why they have not done that with some of the other government charges, like water.

I think that sets out a reasonably detailed assessment of the legislation. The opposition, as I say, are supporting this measure despite the fact that it is far from perfect. We are supporting it because we think that the principle of setting up a lifetime support scheme is one worth supporting. The federal opposition is supporting the National Disability Insurance Scheme, as is the federal government. Part of that scheme requires states to deal with catastrophic care—setting up a no-fault scheme for those who are catastrophically injured in motor vehicle accidents.

As I say, the issue that is missing in this debate ultimately is what happens to all those people who are outside of the scheme. What we now know, through questioning of the government, is that sometime in the future—five, 10 years—when the national disability scheme is set up at the federal level, if there is not a scheme in place at the state level then the state government of the day is going to be charged by the commonwealth government to deal with those 20 people a year who fall outside this scheme.

We ultimately will have an amendment to go to committee, but I understand some other learned colleagues of mine who may be from the legal fraternity might be able to put some more meat on the bones in relation to this particular legislation. Mr Speaker, I will make sure that the answers given to me by the government are distributed to members' pigeonholes over the luncheon break so that members can take them back to their offices and assess the answers in due course.

Mrs VLAHOS (Taylor) (12:46): I would like to speak today about the cost of living and the compulsory third-party insurance scheme, which has become increasingly unaffordable. Since 2000, South Australia's premiums have grown at a rate of over 5 per cent per annum, well in advance of the general rate of inflation for this period. For a two-car family in the metropolitan area, the cost of compulsory third-party premiums now exceeds $1,000 a year and, indeed, for the people in Taylor, who are very car dependent because they live in the outer metropolitan area, this is an issue of cost of living and is why I am speaking today.

Western Australia has a similar fault-based scheme to ours, and a two-car family in Perth would only be paying $540 in CTP premiums. In Brisbane, a two-car family would be paying only around $648 per annum. So why are South Australians not getting value for money from this expensive scheme? The government does not believe they are, and we are committed to addressing the scheme and the other areas where we can make a real difference to the cost of living of South Australian families.

The government is currently addressing cost-of-living pressures through its seven strategic priorities. An affordable place to live is a continuing priority for the government not only for basic reasons for families, such as those in Taylor, but also for the broader economic future of the state and our development. The state government, along with other levels of government, is working to help achieve this. We aim to make South Australia an affordable and attractive place to live, work and do business. Managing household expenses, like electricity, gas and water bills, is a challenge for many people in my electorate. Where we live and our weekly shopping and transport costs can also add to our household expenses.

The state government has in place a range of initiatives to help households, including the initiatives contained in this bill that are aimed at reducing the cost of motor injury insurance premiums and ensuring that more motorists seriously injured in accidents will be able to receive the just and right lifetime care and support they deserve. But why has this scheme become so expensive? I mentioned that before. Last year, minor injuries accounted for 90 per cent of the claims. Statistics published by the government's CTP green paper indicate that around one-third of the compensation payments each year—in excess of $100 million a year—go to claimants who have had little or no time off work. Families are paying higher premiums to fund these payments.

The minister has identified that another drain on the CTP fund is the legal costs, which have risen around 50 per cent since 2005. Families are also paying for these costs. Under these reforms, legal costs will not be reimbursed for minor injuries where claims are less than $25,000 and will be capped at the Magistrate's Court scale for claims between $25,000 and $100,000. Legal fees are a significant part of compulsory third-party costs, and this will be reduced.

Overall, South Australian motorists are paying for a scheme which has witnessed a reduction in the proportion of payments that are being paid directly to benefit accident victims or their dependents. This proportion has fallen from 85 per cent in 2006-07 to below 80 per cent recently. This does not seem to be a value-for-money proposition for the premium paying public such as my electors in Taylor. At the same time, we are paying for an expensive scheme that does not cover everyone injured in vehicle accidents. In particular, the CTP insurance scheme does not necessarily protect everyone who suffers from life changing, catastrophic injuries in vehicle accidents.

If the vehicle accident was entirely the injured person's own fault or if no-one was at fault, the CTP scheme does not provide compensation and the injured person, their family and the taxpayer will ultimately need to shoulder the burden of providing lifetime care to the injured person. Where the burden of care for a loved one falls onto the family member or their broader family collective, their ability to earn income has been severely constrained, affecting their material wellbeing, their whole family and their broader family network.

The new lifetime support scheme fixes this shortcoming for very seriously injured people, but there is a cost associated with this, and the affordability of the CTP scheme must be addressed at the same time. Reducing the burden of high premium costs on motorists is of the greatest importance to this government as part of the 'affordable place to live in' strategic priority, as I have mentioned before. This will make the insurance scheme fairer for all South Australians, as well as easing the burden on South Australian motorists and taxpayers, such as my electors in Taylor. The key objective is to achieve better recovery, rehabilitation and care for injured motorists, whilst making CTP insurance more affordable.

I support the government's proposed changes to the CTP scheme because I believe the vision for South Australia needs to be continued, to be a liveable place for our whole population. We must ensure the people of South Australia enjoy a high quality of life, regardless of their income, and help them make choices that enable them to live this. This includes controlling their own finances, and those in financial hardship need support to manage these essential cost-of-living pressures. I believe these reforms enable this to occur and create a fairer system, and I support the bill for my electors for these reasons.

Mr GRIFFITHS (Goyder) (12:51): I also wish to make a contribution to this bill. I acknowledge the effort made by the member for Davenport as the lead speaker for the opposition not only in supporting this bill but also in putting before the house a very clear understanding of the issues involved in the bill. He provided us with a set of answers that were provided to him following a briefing opportunity, and he asked a lot of questions that had been asked by others outside of this chamber about the issues affecting people.

Like everybody here, I think there is a place for society to accept responsibility for assisting people who suffer from a catastrophic injury. Especially as this bill relates to people involved in car accidents, there is an appropriate level of work to be done. Whilst I support the bill, I express my frustration about the provision of information as it has been given to people. I declare my interest in being a member of the Economic and Finance Committee, only for the last three or four-month period and some periods prior to that also, so I missed out on some of the work that the committee did about this scheme and the request for actuarial advice, and the support that was given by the government for the advice to be provided.

When I read the briefing paper provided by the member for Davenport on Sunday morning before going to a community function—it was not a criticism of the member for Davenport, but I made a note against the briefing paper 'where is the information'? My frustration stems back to that. Where is the information that allows us, who have not had the opportunity yet to be briefed fully upon it, to read something, understand it, consider what its implications are and then form an opinion?

The member for Davenport provided a good four or five pages on it. He has taken the opportunity over the last hour and a half provided to him to read into the official Hansard a lot of the responses that have been received only in very recent times about the issues that he raised in the briefing opportunity. If that information had been made available earlier or if we had delayed the debate on this bill for another week and a half or two weeks, as I think the member for Davenport gave a commitment previously to ensure it was debated fully within the next sitting week, a much higher level of intellectual discussion would have taken place in the chamber—and that is what this place is meant to do.

I have read the information that has been provided to me, listened intently to the contribution made by the members for Davenport and Taylor in supporting the bill and had a look at the second reading explanation from the Minister for Health relating to this bill. This bill is important, therefore it is really important that as many members as possible have some level of intellectual knowledge about it, their head wrapped around it and the ability to communicate it to their community, because it is those people who will challenge us. Those are the people who will be aware of an instance where they will want an answer from us. That is why it was appropriate that the member for Davenport took a reasonable amount of time to read into the Hansard the answers provided to the questions that he posed as part of the briefing last week.

I am very lucky not to know anybody in my life who has suffered a catastrophic injury as a result of a car accident, and I am probably quite unique in that. I do have a very close personal friend who about six weeks before his 18th birthday jumped off a jetty—which was an example provided by the member for Davenport—and suffered a quadriplegic injury. I had to drive his car home from that coastal town (to his parents' home) that night and relay the story to his mother, who had rushed out knowing something was wrong. Mums must have a sixth sense, because she rushed out asking what had happened to her son.

I have had the opportunity to visit Hampstead—and he was there 32 years ago—and to see the impact that this level of injury is having on people and talk to him about the change in his life and, indeed, about the level of support required. So I understand the need for an agreement to exist across state and federal governments and for an effort to be made on a collaborative basis to try to get a system in place that provides a level of surety for the future needs of those people.

It is no doubt very difficult when looking at actuarial advice and trying to determine the life expectancy of a person and their level of injury as a result of a catastrophic accident, but it is really important that we put that in place. I understand and accept the fact that society has a responsibility there, so for that intended purpose I fully support the bill.

I am also very agreeable to the member for Davenport's suggestion about the amendment. Like a lot of people, I think the delay in the introduction of this bill until 1 July 2014 instead of an earlier date is a shame, because the actuarial advice provided to me which went back to 2005 and which referred to, I think, 41 motor vehicle accidents resulting in what is defined as catastrophic injury in that calendar year, highlights the need for such a bill to be introduced, legislated and enacted as quickly as possible. So the target date set by the opposition as part of an amendment that has been tabled of 1 October, I believe, as the last date by which it has to be in place is a good move. I hope the minister recognises that and entrusts his staff members who are working on this to try to get it happening as quickly as possible.

This is not a political game that we are playing here: this is about real people who are going to be impacted. This will potentially impact probably 25 to 30 people, and it is an absolute tragedy that that many people will be impacted by it, but it enforces the need to ensure that the legislation is enacted and put in place as quickly as possible.

I recognise that a lot of the work undertaken here has been based upon the New South Wales experience. As it has existed for some time, there is a level of knowledge about how it works, the projections on how the numbers are calculated, the level of care that is required by people, and the potential impact it will have upon the public of South Australia and the 1.3 million-odd people who have driver's licences.

While none of us want to see it happen and we are all focused on a reduction in accidents and deaths on our roads, the reality is that it will occur here. I am pretty sure that it is a good move. I know that it is a good move. The debate that occurred in the portfolio room and within our joint party yesterday, even with the frustration with the level of information available, allowed us to be very comfortable about the fact that it is appropriate. So the minister has done the right thing in that regard.

I recognise that there have been quite a few revisions of the original green paper put out a bit over 12 months ago. A lot of legal argument has taken place on that. As I understand it, a level of agreement exists now. It was originally intended to be three bills; it has now been brought down to one. There are frustrations about the provision of information, but it has got us to a situation where at least some level of debate is able to occur. So as soon as we have as many people as possible stand up and we get this resolved, the better for everybody.

I also look forward to the committee stage of this bill and the opportunity to question some sections of it, where we raise questions on behalf of people. That is what we all do: we come into this place trying to make sure that we get the best outcomes. It is not until—and I have had other examples posted to me in recent days—we look at likely scenarios and start to question individual words within clauses in bills and acts that we think of possible scenarios. That is what the committee stage allows for.

I have read some material and heard some things from the member for Davenport when he was previously looking after environment, and I think a five or eight hour contribution was made. I am pretty confident that there will be a bit of a forensic examination made here, but that will allow the chamber to actually understand this bill far better than it otherwise would. I look forward to the swift passage of this bill through the second reading and committee stages.

Debate adjourned.


[Sitting suspended from 13:00 to 14:00]


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