Compulsory Third Party Insurance

About this Item
Speakers - Longley Mr James; Collins The Hon Peter
Business - Questions Without Notice

COMPULSORY THIRD PARTY INSURANCE

Mr LONGLEY: My question without notice is to the Attorney General, Minister for Consumer Affairs and Minister for Arts. Is the Minister aware of recent developments relating to compulsory third party insurance? If so, are motorists now benefiting from significantly cheaper premiums?

Mr COLLINS: I thank the honourable member for Pittwater for his most timely question. One of the major benefits coming this year from the Government is the substantial change to compulsory third party insurance. It is now really starting to benefit motorists throughout New South Wales. From the start the new scheme has provided substantial reductions in third party insurance premiums available to all motorists in New South Wales. From the outset savings of up to $100 on the average family sedan have been achievable. The 14 or so licensed insurance companies in this State now providing compulsory third party insurance can and do compete on price and the level of service they offer to policyholders and claimants. When premiums were first set in March this year the base premium rates for the Sydney metropolitan area ranged between $305 and $255. These rates were subject to a possible loading or discount up to a maximum of 10 per cent.

In the run-up to the election in May this year the Leader of the Opposition did not want to be outdone. He could see that the Government was making a major impact in benefits for every motorist in New South Wales by getting those premiums down. The compulsory third party policy of this Government was seen as benefiting every household in the State. So the Leader of the Opposition came up with a scheme promising $120 off car registration. The Daily Telegraph Mirror reported "Carr pledges $120 off rego". The only problem was that within hours of delivering his policy speech about cutting $120 off car registration he had to change his pledge and make an adjustment. Within hours of making that policy speech he had to take back his statement about the $120 reduction and he dropped it to just a $100 reduction on car registration in New South Wales. On 11th May the Sydney Morning Herald reported that the Leader of the Opposition strongly rejected suggestions that a $20 cut was minuscule. The Leader of the Opposition was reported as saying that $20 was an insignificant amount. The Sydney Morning Herald also reported him saying:

I think about $20 will be a big help for those families in New South Wales who have been hit by increases in State taxes and charges.

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The Leader of the Opposition, after changing his election promise within hours of making it, said that $20 would be a big help. Under the scheme introduced this year by the Greiner Government compulsory third party insurance premiums have plummeted. This will benefit every motorist in this State. The Government has not stopped. It did not begin and end with the initial benefit. The benefits will continue because the insurance companies providing compulsory third party insurance have reduced their premiums further. Commercial Union Assurance Company of Australia Limited has reduced its premium from $285 to $275. The FAI Insurance group has reduced its premium from $275 to $260. Mercantile Mutual Insurance (Australia) Limited has reduced its premium from $285 to $250, a saving of $35. Honourable members should remember that the Leader of the Opposition said that even $20 would be of major benefit to families hard hit in New South Wales. NRMA Insurance Limited has reduced its premium from $295 to $260, another $35 saving.

The most recent effect of major insurers slashing premiums by almost up to $40 for city motorists will lead to further increased competition among insurers. The cheapest available compulsory third party policy in 1991, under this Government, is $229. Even bigger savings are available in rural areas, where premiums have been reduced by $48. The Leader of the Opposition said that $20 would be a major benefit, that $20 was not a minuscule amount. Premiums for country motorists have fallen by $48 to $199. The tangible benefit introduced by this Government will benefit every motorist in New South Wales. Whether people live in the city or the country, they know that these benefits are flowing through to them because of the Government's logical policy of not ripping off - as the Opposition's amended election pledge would have done - the $50 million to $60 million that goes into road construction in this State. The Leader of the Opposition glossed over that in his election policy speech, as revised. His first pledge would have taken about $60 million out of road construction. As revised, it would have taken out $50 million. This Government has left the money in there for the roads of this State to be rebuilt. It has also been able to pass on a tangible benefit to every motorist.

I have every confidence that those benefits - that downward trend - will continue, that increased competition among private insurers will increase and accelerate and that every motorist in this State will feel the benefit. The constituents of the honourable member for Pittwater who live on the peninsula in the Manly-Warringah area will benefit from the decrease in third party premiums. That is obviously why I was asked the question by the honourable member for Pittwater. But even in places like Londonderry every constituent will receive a substantial benefit. The honourable member for Londonderry will be able to take the message back to his constituents after today. I noticed his head nodding - obviously in agreement with the point I am making. Every motorist, whether in Londonderry or Pittwater, will benefit from this decision. The community has just seen the beginning of these benefits. I thank the honourable member for his question.

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