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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2019-03-20 Daily Xml
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Social Development Committee: Review of Operation of Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013

Adjourned debate on motion of Hon. D.G.E. Hood:

That the final report of the committee, for the review of the operation of the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013, be noted.

(Continued from 27 February 2019.)

The Hon. C. BONAROS (17:32): I welcome the 41st report of the Social Development Committee, a review of the Motor Vehicle Accidents (Lifetime Support Scheme) Act 2013, as tabled by the Hon. Dennis Hood in this house on 13 February 2019.

I filed a minority report to the review because I am deeply concerned that the South Australian scheme has delivered super profits to CTP insurance companies, to the serious detriment of South Australians who have been injured in motor vehicle collisions or accidents. Many experts, including former Supreme Court judges, have labelled the Lifetime Support Scheme as one of the worst insurance policies for motorists in Australia. If the costs of premiums is compared to the benefits provided to motor accident victims, it becomes patently obvious that the insurance companies rather than injured motorists are the real beneficiaries of the scheme as it is.

It is of great concern to me, as I am sure it would be to all South Australians, that there are no indications that the super profits will be applied to reduce premiums payable in future or that there will be any increase in payments made to those injured motorists. The provision of lifetime care and support to catastrophically injured people is undoubtedly a positive step, but we need to make sure it is accessible and equitable to those injured in motor accidents.

This review illustrates that we need to make some further adjustments to this scheme to ensure that South Australians do not continue to face an uphill battle in addition to the physical and mental injuries they may have already sustained in a motor vehicle accident. Many South Australians who are injured on our roads are denied access to the rights and entitlements they would have previously been entitled to due to the changes implemented by the act. Others who would have suffered less than catastrophic but still significant injuries have completely lost their ability to claim for losses attributable to those injuries.

In 2015-16, the average payout of a CTP claim decreased from $152,693 under the old scheme to around $68,000 under the new scheme. Pain and suffering payments in SA are less than Queensland. In South Australia, an injured motorist with an injury scale value (ISV) assessed at 11 points will receive around just $3,000. This is completely inadequate and is likely to be less than the cost of medical expert reports the applicant will need to obtain to claim the payment.

Our South Australian act was modelled on the Queensland scheme, but we have departed from that scheme in significant ways. The most significant of those is the imposition of the thresholds on the ISV. In Queensland, there are no thresholds on the ISV. While the review recommends small reductions to these thresholds, it is my view and that of many experts, including specialist doctors and lawyers, that the ISV thresholds be completely removed.

Compensation should be paid to motor vehicle accident victims under the act for economic and non-economic loss at an amount comparable to the Queensland scheme. Why should we settle for an inferior scheme for South Australian motorists? Why are some of the super profits of the insurance companies not directed to providing better care and support for those unfortunate enough to have their entire lives disrupted and often permanently impacted by a motor vehicle accident?

The CTP Regulator 2017-18 Annual Report notes that the rate of legal representation has increased from 2016-17 to 2017-18. However, the majority of claimants are still not legally represented. At present, applicants can only claim legal advice costs if the claim is more than $25,000. Other civil claims, as we know, have a lower limit of just $12,500. This lower amount should be applied to the Lifetime Support Scheme so that injured individuals do not have to battle it out alone, representing themselves against the often intimidatory tactics of the big insurers.

The right of victims to recover legal costs in pursuing their claims should be reinstated by removing the claim quantum threshold that currently applies. Constituents tell me that many injured motorists do not pursue claims at all now, because they cannot afford or justify the costs of legal representation. Their injuries are often so overwhelming and all-consuming that they cannot then face the challenges of dealing with the technicalities, the uncertainty of being able to meet the thresholds to obtain meaningful compensation and incurring legal costs that may not be ultimately met.

I agree with the Social Development Committee's report that the discount to economic loss of 20 per cent should be removed, as this is another inequitable and unfair measure. It is my view, however, that it should be completely removed. Limitations that allow for only pure psychiatric illnesses to be compensable also has the potential to cause undue hardship. All diagnosed mental harm should be compensable, just as physical injuries are. Mental harm can often be more disabling and persistent than a physical injury. I think we have heard enough in this place to know that to be the case.

I have recommended that the Social Development Committee undertake a full and independent review of the CTP insurance scheme, including a comprehensive analysis of the access to compensation and support that all those injured in motor vehicle accidents in South Australia receive to date, including those who have not qualified for LSS.

This independent review should also provide a comparative analysis of premiums paid to insurers as against compensation paid to those injured. I would like to make comment on two other committee recommendations specifically, the first being recommendation 2, which recommends the government undertake necessary actuarial scoping or modelling of the financial implications and expected time frame to expand the lifetime support scheme so that it is accessible to all South Australians who experience a catastrophic injury within the national injury insurance scheme.

Once appropriate levies have been identified, the committee recommends implementing the remaining National Injury Insurance Scheme recommendations in accordance with the agreement made with the commonwealth government, including those categories of accidents which can cause catastrophic injury, such as workplace accidents, general accidents and medical accidents. I disagreed with this recommendation, not because implementing these changes that are in line with the national scheme recommendations is necessarily a bad thing: I did so because the expansion of the scheme to a wider range of accidents is simply not a feasible option, unless the scheme that we have for motorists is functioning well and, importantly, not unfairly disadvantaging those injured.

It makes no sense at all to roll out an already problematic scheme that will result in more unfairness and more inequity. We need to get that scheme—the one we have operating now—operating properly and, unless and until we are willing to do that, we cannot contemplate subjecting more injured South Australians to the same sort of inequity and injustice.

Lastly, recommendation 10 of the committee report recommends that South Australia give consideration to setting up a no-fault scheme for all people injured in a motor vehicle accident, in line with reforms in New South Wales, Tasmania and Victoria. That scheme, the committee report says, should be a statutory benefits scheme with threshold amounts set for treatment, care, support and income cover.

As outlined in my report, I agree with the principle of all people injured in a motor vehicle accident being insured, whether at fault, or not. That is not in question. However, again, until the costs and benefits of the LSA scheme are more transparently disclosed, that is, we know the super profits from CTP premiums being retained by insurance companies, as compared with the benefits and payments made to those injured in motor vehicle accidents in South Australia, the fact remains that a no-fault scheme could be detrimental to the very people it is intended to assist. It could mean that more people receive even lower insurance payouts and face higher thresholds in order to receive any assistance.

All in all, there needs to be a much better balance between the CTP premiums paid by all South Australian motorists and the recompense and remedies provided to injured motor vehicle accident victims. I thank the many dedicated committee people who appeared before or made submissions to the committee. I note that it was the previous committee, and I am sure I am not alone in looking forward to the government actioning the 19 recommendations contained in the review by tabling comprehensive reform legislation for consideration in this place.

I can assure you, Mr President, that I will have much more to say on this issue at that time, and I am sure again the government can expect that piece of legislation to be thoroughly scrutinised by this chamber to ensure that South Australian motorists who sustain injuries in motor vehicle accidents are not denied access to appropriate rights and entitlements.

Debate adjourned on motion of Hon. T.J. Stephens.

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