HANSARD
SITTING CALENDAR
SEARCH
LIVE BROADCAST
Hansard Dynamic Member Index
Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-07-01 Daily Xml
Contents
Pdf Xml

Motor Accident Commission

Adjourned debate on motion of Hon. R.L. Brokenshire:

That the Statutory Authorities Review Committee, as an urgent priority, investigate and examine—

1. The proposal for privatisation of the Motor Accident Commission including , but not limited to, the alternative to privatisation as put forward to the state government by the MAC board;

2. The PricewaterhouseCoopers' economic predictions and the report by Finity Consulting on the MAC board proposal;

3. Treasury involvement in the decision to privatise the MAC;

4. Other states that have privatised and the impact that has had on CTP costs and injury compensation; and

5. Whether the authority and its operations provide the most effective, efficient and economical means for achieving the purposes set out within the act including, but not limited to, whether purposes of the fund noted in section 25 of the Motor Accident Commission Act regarding the Compulsory Third Party Fund are being appropriately administered in accordance with the act.

(Continued from 17 June 2015.)

The Hon. T.T. NGO (17:06): I welcome this motion put to the council by the very good member the Hon. Mr Brokenshire. As I have said previously in this chamber, I congratulate the honourable member for moving this issue to a standing committee, through to the Statutory Authorities Review Committee (SARC), instead of establishing another select committee. This is the correct way of advancing this issue. We have honourable members in this house setting up select committees just about one per sitting week at the moment.

SARC consists of very high-calibre members: the likes of the Hon. Rob Lucas, the former treasurer and a very good chair in the Budget and Finance Committee as well; the Hon. Stephen Wade, shadow health minister; the Hon. Mr Hood; plus two government members, the Hon. Mr Kandelaars and myself. So, we have a very high-calibre team. If we have any issues, I am pretty sure the committee would be able to find out and would not let it go through.

SARC will be able to investigate what the real story is behind the many claims that have been made about this issue. I am interested, as a member of the committee, to see what the committee will find. One important point that I need to make is that the government does not have the numbers on this committee, so it is being controlled by other parties.

The Hon. S.G. Wade interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Order!

The Hon. T.T. NGO: A matter raised by the Hon. Mr Brokenshire—

The Hon. S.G. Wade interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Mr Wade is out of order. The Hon. Mr Ngo has the call.

The Hon. T.T. NGO: A matter raised by the Hon. Mr Brokenshire also featured in the Advertiser article dated 16 June 2015, which detailed an offer of $1 billion that the MAC Board had made and $100 million to $150 million worth in dividends each year to Treasury to remain in government hands. I am keen to know more about this proposal and the business case that the MAC Board put forward to back their business proposal. In the Budget and Finance Committee we heard from the Under Treasurer, Mr Rowse, who said, 'traditionally MAC hasn't returned'—

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): There is too much conversation in the chamber. The Hon. Mr Ngo has the call.

The Hon. R.L. Brokenshire: Sorry, sir.

The Hon. T.T. NGO: I will start again. He stated:

…traditionally MAC hasn't returned dividends. Apart from the $100 million contribution for roadworks the previous year, there hasn't been a history of dividends returned from MAC.

My question is: if MAC only returned $100 million dividends to the government for the first time a couple of years ago, will MAC have enough funds to operate if their commitment to the government is $100 million to $150 million in dividends a year onwards? When the GFC hit and MAC investment returns plummeted the then treasurer, Mr Foley, had to increase the CTP insurance to over 16 per cent to keep MAC afloat.

The increase, I believe, remained high—around the 10 per cent mark—for a number of years to come after that. If MAC offers that $100 million to $150 million in dividends to the government and it had a bad investment, how is it going to get those funds? Will it slug motorists with, say, a 20 per cent or 30 per cent increase if that was the case?

There have been concerns raised by the Hon. Mr Lucas about the transparency of Treasury's scoping work into the costs and benefits of having MAC in public hands. The Hon. Mr Brokenshire believes that this work may have been done without proper consultation with the MAC board.

As a general rule, I want to make it clear that there is absolutely nothing wrong with Treasury conducting this type of work first before consulting MAC. An article in The Advertiser dated 14 June 2015 by Daniel Wills stated that the Deputy Under Treasurer, Garry Goddard—I used to work with Mr Goddard and he is a highly intelligent public servant—wrote to MAC seeking information about MAC so that Treasury, through UBS, could put together a scoping study report for the Treasurer.

This is not Treasury hijacking the process or taking control of the MAC board. Treasury does not have operational or business data about MAC. For Treasury to have the accuracy to conduct the scoping study properly it would need information from MAC. For Mr Goddard to write to the MAC board seeking the information, it seems to me that Treasury was pretty much upfront and transparent about the matter with MAC. Mr Goddard would not be able to provide accurate advice to the Treasurer if MAC was not a willing participant.

The committee will at least be able to address some concerns expressed by other members on how and when that work was conducted. It will also be interesting to see what, if any, proposal was put by the MAC board to effectively counter the scoping work undertaken by the government through Treasury. The second claim that the Hon. Mr Brokenshire has made is that he believes that the pricing of compulsory third party (CTP) insurance will increase significantly if MAC is privatised.

The Hon. R.L. Brokenshire interjecting:

The Hon. T.T. NGO: I am interested to see what the committee finds about this.

The Hon. R.L. Brokenshire: So am I.

The Hon. T.T. NGO: When government assets are sold to a private operator naturally the public will want to know whether the sale will impact them or not. I think it is a legitimate and a very good question from the Hon. Mr Brokenshire.

The Hon. R.L. Brokenshire interjecting:

The Hon. T.T. NGO: As a member of parliament I do want to know the answer to that question as well because I am sure I will be asked that question.

The Hon. R.L. Brokenshire interjecting:

The Hon. T.T. NGO: It is good for the committee to find out.

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): The Hon. Mr Brokenshire will get a chance to conclude the debate.

The Hon. T.T. NGO: Something that has not been readily mentioned—or perhaps ignored—in this debate is that the government currently ensures that every road user has CTP coverage by tying its payments with registration. With the transfer to private ownership, it would be wise for the committee to investigate how this will continue to be monitored, and we do not want people driving without that coverage.

While we are on the CTP, I would like to speak about the CTP reforms. There has been some confusion, or perhaps some deliberate deception by some quarters, with the suggestion that CTP reforms previously made by then treasurer Jack Snelling, which lowered premiums for all motorists and, most importantly, ensured that those most seriously injured were adequately looked after, were unnecessary.

Mr Bailes from the Law Society has tried to assert that Mr Snelling's reforms were about making the scheme more sustainable for MAC to manage. Mr Bailes follows by asserting that, clearly, MAC already was quite sustainable given that the government is now privatising it at a significant profit. Mr Bailes clearly refuses to accept that Mr Snelling's reforms were about providing an appropriate level of compensation to those who needed it most.

On this point, more than 30 South Australians who were very seriously injured in motor vehicle accidents have been provided with vital services and care by the government's Lifetime Support Scheme which started only 11 months ago as part of Mr Snelling's reforms. More than half of the scheme's participants would not have been eligible for compulsory third-party compensation if they had been injured before Mr Snelling implemented his reforms.

It is also important to note that CTP premiums before Mr Snelling's reforms were continually the highest in the nation and they were never going down when compared to other states. So, indeed, Mr Snelling did make the scheme sustainable—

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): I'm sure the honourable member means the Hon. Mr Snelling.

The Hon. T.T. NGO: —but for paying motorists, not for the MAC board or the government. Mr Snelling's reforms are completely separate from what we are debating here and it is disappointing that the Law Society used this as a cheap opportunity to advance its own interests.

I find it extraordinary that the government is implementing a policy that looks after the most vulnerable people and their families in our society due to some incident of bad luck that completely turned their lives upside down, yet we have this constant undermining of the scheme by some people. Try to tell these 30 or so people and their families what their lives would be like if some honourable members have their way by shutting the CTP scheme down.

I hope honourable members are strong enough to withstand whatever pressure is being put on them by the Law Society on this very important social policy. The Law Society and its members will be fine whatever happens to the CTP reforms but these seriously injured people and their families will not be if the CTP scheme is shut down. I thank the Hon. Mr Brokenshire for moving this motion and I look forward to working with the committee to investigate the issues I raised above and any other issues that may come up.

The Hon. R.I. LUCAS (17:18): Given the speech presented on behalf of government members by the Hon. Mr Ngo, my contribution will be relatively brief, given that the government is going to support this motion. I make just two points.

The first is, without revealing the nature of deliberations within the committee, the issue of whether the committee should address the issue of the Motor Accident Commission as part of a motion of its own making was being canvassed, so I welcome the fact that the Hon. Mr Brokenshire has moved this motion in the Legislative Council to give a wider group of members the opportunity to express a view one way or another as to the advisability of the Statutory Authorities Review Committee having a look at the Motor Accident Commission in terms of its efficiency and effectiveness and, of course, in terms of the major policy reform the government announced just over a year ago.

The second and final point I make is that I welcome the comments that the Hon. Mr Ngo has made, where he has indicated clearly on behalf of government members that they welcome the opportunity to explore the alternative proposition that the board clearly put to the government; that is, the board did get independent advice, as we understand it. They put a separate proposition to the government. For that to be explored by the committee both Treasury and the Motor Accident Commission will need to provide copies of the various consultants' reports that were available to them so that the committee—as the Hon. Mr Ngo has indicated, and I support him in his comments—is able to thoroughly investigate and consider the proposition from the government and the proposition from the Motor Accident Commission board. It will be impossible for that to occur if government members, such as the Hon. Mr Ngo and the Hon. Mr Kandelaars, and other members of the committee, are denied access to those critical documents.

Should this parliament pass this motion this afternoon, as I understand it will, clearly one of the first decisions will be when we convene to send a direct request to the Motor Accident Commission and to Treasury demanding copies of all of those documents so that the committee can then ask questions of the Motor Accident Commission board members—both past and present, because there has been a recent change in relation to the membership—and some of its senior executives, together with some of the senior executives of Treasury, to make an independent judgement as to the various propositions that have been put, firstly by the government and secondly by the Motor Accident Commission board and management, as we understand it, to the government.

I welcome that clear statement of policy by the Hon. Mr Ngo on behalf of government members and the government in relation to this issue. We will be supporting not only this motion but these sorts of motions in the committee to ensure that we get access to all of the information the committee requires.

With that, we acknowledge the fact that the Hon. Mr Brokenshire clearly has the numbers anyway with the support of government and other Independent members for this reference but, to make it almost unanimous, or possibly unanimous, I indicate on behalf of Liberal members that we will go along with the majority view that is being expressed and support the reference to the Statutory Authorities Review Committee.

The Hon. K.L. VINCENT (17:23): Very briefly, on behalf of Dignity for Disability I indicate our support for this motion—

The Hon. S.G. Wade: Unanimous.

The Hon. K.L. VINCENT: Yes, I think we have just ticked over unanimous—and I do so saying: I hate to say I told you so. Members may remember that when changes to the compulsory third-party insurance laws were changed and the ensuing changes to the MAC were mooted, Dignity for Disability was the only party to stand against those changes. The advice we received and the research we had done clearly illustrated that there were huge problems with these changes that would result in less comprehensive cover for injured motorists. Perhaps if other members had had the guts to follow that advice, we would not be having this debate at all. But having said that, we are happy to support this and any other measure to look at these changes and how we can better protect injured motorists. We support the motion.

The Hon. R.L. BROKENSHIRE (17:24): I thank the Hon. Mr Tung Ngo, the Hon. Mr Rob Lucas on behalf of the Liberal Party, and the Hon. Kelly Vincent for her strong comments and the fact that she has been very concerned for a long time about certain aspects of what has already happened with CTP. It is important that the committee thoroughly investigates this. The government does not have a mandate to privatise this. The money is not going to pay off core debt; it is going to prop up an artificial surplus. I look forward to the work the committee will do in a very thorough and diligent way. I commend the motion to the house.

Motion carried.

PARLIAMENTARY BUSINESS
MEMBERS
GET INVOLVED
ABOUT PARLIAMENT
VISIT
LEGISLATIVE COUNCIL
HOUSE OF ASSEMBLY
CONTACT