Motor Accidents Compensation Bill



About this Item
SpeakersChesterfield-Evans The Hon Dr Arthur; Macdonald The Hon Ian; Breen The Hon Peter; Della Bosca The Hon John; Ryan The Hon John; Jones The Hon Richard; Tingle The Hon John; Hatzistergos The Hon John; Pezzutti The Hon Dr Brian; Nile Reverend The Hon Fred; Gallacher The Hon Michael; Moppett The Hon Doug
BusinessBill, Division, In Committee, Amendment

MOTOR ACCIDENTS COMPENSATION BILL
In Committee

Consideration resumed from 29 June.

The Hon. Dr A. CHESTERFIELD-EVANS [11.09 a.m.]: Before I came into Parliament I wondered whether politicians were in touch with reality. The stereotype in the community is that members of Parliament live in an out-of-touch world and make out-of-touch decisions. I thought that that could not be right until all this information poured in. In this debate I wonder whether honourable members are on the same planet. I hear honourable members arguing about whether people who go to court to get justice and then do not get justice as they see it should be penalised by having to pay costs of $15,000, $20,000 or $25,000.

I wonder how many honourable members are lawyers. I suppose that quite a few of them are
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lawyers - that has always been a worry. Of those lawyers, how many have practised recently, and of those who have practised recently how many have been fighting for plaintiffs in either workers compensation or third party cases? If the answer to those questions is not very many and they have not been working with these types of cases, I would then ask for other facts such as what percentage of cases are settled at what dollar levels. In other words, how much money are we fighting over? What are people risking to get more money? What is the amount of current settlements?

As usual, we are in a vacuum. No facts are provided for honourable members who want to argue on clauses. My practice was a medical practice but I tried to look holistically at the people who came to me. Most of the people who came to me had been injured and were on workers compensation. As they went to get their settlements I was flabbergasted to find that some of them who had not worked for 18 months or two years because of back injuries had received their full wage under the workers compensation entitlement for a year, then received the statutory rate, which in many cases was much less than the workers compensation entitlement, and then went for a settlement, which often happened out of court.

Sometimes the settlements were as little as $30,000 for people who in my opinion could not work in a hard physical job probably for the rest of their lives and who did not have the training, education or, in some cases, intellectual ability to find jobs that did not involve fairly hard physical labour. In a sense these people were disadvantaged in a market that already had quite high unemployment, and they were of an age group and education which further disadvantaged them, and they received settlements of about $30,000. Effectively, their lives were sold for little more than their previous annual wage. I was horrified by this.

When I asked people whether their solicitors would fight they said that solicitors had told them that that was all they were likely to get in court. I do not know whether that is true because I have not followed the amounts. However, I do know - and I had great difficulty getting honourable members, especially some of my legal colleagues, to understand this yesterday - that people simply do not get paid. When workers compensation is refused I am one of the few doctors who treat people who are injured under Medicare. General practitioners who are not accredited with Medicare receive less than half the rate of workers compensation.

When workers compensation is refused people who have nothing to live on cannot get treatment in most cases because only a few idiots like me would think of working for half the wages. I admit that I bag lawyers constantly, but solicitors acting for plaintiffs must compile all the medical reports at their own cost; many doctors simply will not write reports if they are not paid in advance, because they do not want to wait seven or eight years for the settlement. If solicitors litigate a case they must wait in a long queue for their money; and if a matter is settled they get their commission immediately. So plaintiffs’ solicitors are under immense pressure to settle and not to litigate.

Settlement amounts are already low. If that were not enough, the American Medical Association guidelines provide what are frankly derisory amounts in terms of the percentage. Today I received a letter from my medical practice about a patient of mine who has gone back to work with a bit of a limp. Her orthopaedic surgeon has said that she has a 20 per cent disability in one of her knees. If we were using the Australian Medical Association guidelines the percentage would be only a fraction of that 20 per cent disability. The Australian Medical Association guidelines are likely to lead to lower settlements, which will go to the Claims Assessment and Resolution Service [CARS] system and result in very low settlement offerings.

People will then either get a very poor settlement, which is obviously tough on them, or be forced to take legal action, with their lawyers saying that if they lose they will be down $25,000 or $15,000. People will be caught between a rock and a hard place. People who have come to see me have told me that they cannot get a job, they have been off work for two years, they have bills coming out of their ears and they are being sold for $30,000, and they have asked me what they should do. That situation will worsen under the proposed legislation.

I do not have a fact base but I have a practice that is recent. There are many anecdotes similar to the one I have told the Committee. This is not a one-off case; it is a pattern which I believe I have sufficient information to say is the norm, and the norm will worsen under the proposed legislation. Some honourable members are concerned that the poor old insurance companies will be out of pocket as a result of litigating cases while people’s lives are on the line for what sometimes amounts to a simple pittance. I simply ask honourable members not to support insurance companies being able to charge anything more than a token amount in such cases. If
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that is not acceptable, I ask them to opt for the lowest amount possible, because I think the frame of reference in this Parliament is out of kilter with reality.

The Hon. I. M. MACDONALD (Parliamentary Secretary) [11.17 a.m.]: The whole focus of this bill is to devise an out-of-court dispute resolution system that achieves fair and reasonable results. The Hon. Dr A. Chesterfield-Evans does not seem to appreciate that the CARS body, which will make these assessments, will not be a pro-insurer body; it will be appointed in consultation with the Motor Accidents Council and other interested parties. It is the view of the Government that it will be a body determined to ensure fair and acceptable outcomes for all who go before it, and that is at the heart of the matter.

Honourable members must remember that insurance companies will not be able to appeal determinations by CARS; it is the claimants who will have that right. The bill provides for a sanction which will be imposed only if on appeal the determination is less than the CARS assessment by various amounts. In a sense the system has that fairness as its very basis, but the Hon. Dr A. Chesterfield-Evans has not been able to grasp that. Sanctions are needed to stop CARS from becoming an interlocutory process by which claimants test the merits of their claims and then run the cases in court. If that happens the whole CARS process will become an expensive add-on to the current system.

Sanctions have been provided in the bill to prevent matters from being taken to court immediately, which would take us back to the whole process of expensive litigation. The sanctions are no more than those which currently apply in relation to compromise and appeals from arbitration to court. The sanctions are not something that the Government has just invented; they are the current practice. At present, if a claimant does not accept an insurer’s offer of compromise, and the claimant does not do better at court, he or she is liable to pay all of the insurer’s costs. The costs are not capped in any way. The way the Hon. Dr A. Chesterfield-Evans has spoken, one would think that somehow the Government has invented this new sanctions edifice. In fact it is, by and large, current practice.

Additionally, at present if the matter proceeds to an arbitration hearing, the court will impose a cost penalty if the arbitration award is not improved substantially. The rule of thumb in the court is that the claimant will be liable for court costs unless the award is improved by at least 20 per cent. It can therefore be seen that the cost penalties in this bill are no more than those that currently apply. If a cap is placed on the amount of legal costs that a claimant may be liable to pay, it will encourage claims, on advice from legal representatives, to run the matter further if they believe that the amount of the award may be improved by at least the amount of the cap. Under encouragement from lawyers, it is not difficult to contemplate this occurring in a substantial number of cases. If a cap is to be introduced, it should be as high as possible to discourage this litigation process.

I am aware that honourable members are concerned that insurers will simply load up the legal costs of court hearings to increase the fear of claimants about bringing on matters when they believe that the CARS determination was not fair. However, it should be noted that the claimant will be protected from having to meet unreasonably high legal costs because those costs will be limited by the legal costs regulation. A claimant will not be exposed to more than the regulated amount, and will therefore have a clear idea, before deciding whether to pursue the matter in court, of the amount of costs he or she may have to pay.

The Government’s amendments therefore promote realistic consideration by claimants of whether the independent CARS assessment is fair and acceptable. At the same time, if a claimant decides to go to court, that claimant will have certainty in relation to his or her exposure to payment of the insurer’s legal costs. The Government’s intention is to limit litigation. However, if litigation is pursued, some realistic sanction should apply, and that is the Government’s approach to the amendments moved by the Hon. P. J. Breen. We have a practice that is currently in place. We believe that we have placed the protections at the bottom of this regime. An organisation will be appointed and the appointees will be required to be acceptable to all sides in this issue.

The Hon. P. J. BREEN [11.23 a.m.]: The amendment moved by the Hon. R. S. L. Jones suggests that a cap of $20,000 be put on the figure referred to in the Government’s amendment. It seems that that figure is the only area in which there is disagreement about the amendment. I should like to address a couple of points particularly in relation to some of the issues raised by the Hon. I. M. Macdonald. The idea of a cap is based on two important principles. Firstly, the insurance company has admitted liability, so there is no reason for the insurance company to be involved in a long, drawn-out legal proceeding where there is no question of liability. So why should the insurance company brief Mallesons Stephen Jaques, or one of the other
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expensive law firms - who charge several hundred dollars per hour - when there is no question of liability?

Secondly, the insurance company has no right of appeal under the legislation. I made the point last night - it was late, and it might have been difficult to comprehend - that the CARS body is based on a group called the Insurance Enquiries Council. That model is being mirrored in the legislation. CARS will operate in exactly the same way as the Insurance Enquiries Council is operating. Very few appeals are lodged from the Insurance Enquiries Council, because the council makes reasonable, rational decisions. It is to be hoped that CARS will do the same, and therefore there will be no need for it to consider this question of appeals.

The Hon. I. M. Macdonald made a big issue about the fact that there is no right of appeal for insurance companies under the present legislation. However, I suggest that for that reason insurance companies’ costs ought to be capped. If those who draft the legislation have not seen fit to give insurance companies a right of appeal, why should that decision be diminished, cancelled or exploited by allowing them to run expensive legal cases? That does not make sense; it is irrational. It is inconsistent with the drafting of the legislation to exclude insurance companies from a right of appeal on the one hand, and give them unlimited costs if they want to fight a claimant or a plaintiff on the other.

The Hon. I. M. Macdonald expressed a concern that lawyers are likely to exploit the situation simply because the legal costs are being capped. A figure of $20,000 is a lot of money for those who are derisively called the punters to have to bear in mind simply because they want to go to court and appeal the CARS decision. Not only will they have to pay the insurance company’s costs but they will also have to pay their own costs. It seems to me that if a reasonable person were faced with the prospect of paying an insurance company $20,000 in costs as well as paying his or her own lawyers that much and possibly more, he or she would seriously consider accepting the CARS decision.

If the CARS decision is reasonable, that person will not go to court. No-one wants to go to court unnecessarily. One never knows what the court will decide; it depends on the judge and how the judge feels. It also depends on one’s lawyers. They might have a bad day and may not present the case very well. All these things are deterrents to people going to court. With regard to the figure of $20,000, up until the time I came to this place I had the carriage of 26 cases in the District Court.

The District Court now takes only a year to deal with these types of cases. In the present climate with case management, anyone who runs up more than $20,000 in expenses in a District Court case ought to be ashamed of himself. It is not a lot of money; it is a reasonable figure for any lawyer to run a case in the District Court for 12 months. If a law firm charges more than $20,000, it is charging too much. All I am suggesting in this amendment is that some cap be placed on what insurance companies can pay their lawyers to defend cases in which they have admitted liability. I commend the amendment to the Committee.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [11.28 a.m.]: As I foreshadowed last night, the Government would be prepared to withdraw so much of its current amendment as would prohibit the amendment moved by Reverend the Hon. F. J. Nile last night to be incorporated into the bill. I take the opportunity at this point to make a further contribution to debate on this question. Firstly, I should like to respond to some of the observations made by the Hon. P. J. Breen about the Insurance Enquiries Council.

I am happy that the honourable member sees the Insurance Enquiries Council as a parallel process to the Claims Assessment and Resolution Service [CARS] process. The Insurance Enquiries Council is an industry body that is funded and operated by insurers themselves; it is not a statutory framework that is envisaged as being provided for in the CARS process. Therefore, it is important to compare that organisation and the relative success which the Hon. P. J. Breen attributes to it with the structure that the Government proposes to put in place.

The Government is proposing the CARS system, which is a statutory system of systematic dispute resolution in an area traditionally dominated by litigation and court processes. It should therefore be contrasted with the Insurance Enquiries Council [IEC] process referred to by the Hon. P. J. Breen in which complaints in relation to general insurance, generally speaking, are dealt with without a litigation process.

The culture that prevails in that general insurance environment is one in which the insurer is seen as a client to be serviced rather than a plaintiff or perhaps a potential opponent in the courts. That is in part why the Government suggested the first form of this bill but, as that seemed a little harsh, it
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proposed to ensure that those at the catastrophic end were not dealt with unfairly by the provisions of this clause. The Government allowed for a percentage amount or a full amount with respect to the amount of money that claimants had to achieve in the course of judgment.

The key issue is the concern of the Hon. P. J. Breen about the cap that claimants would have to pay if they did not achieve that difference. There still seems to be some confusion in the Committee about the cost penalties in the bill and, therefore, I shall give further clarification. It is also necessary for me to answer some of the arguments specifically put forward against the provisions at large. The cost penalties in the bill relate only to claimants because insurers have no right of appeal. The Government is seeking a culture change and the Hon. Dr A. Chesterfield-Evans asked whether we were in the same world. I replied in the affirmative, but said that in order to make a change in the world one must embark on some short, sharp shocks, and one is a short, sharp shock for insurers in that if it is a statutory process CARS will make the final decision.

The Hon. P. J. Breen referred to them being able to brief a law firm that he nominated - and I will not nominate one because I am a Minister of the Crown - or any other defendant law firm, but they will be out of luck. They cannot do that because following completion of the CARS process, any insurers’ rights are suspended. Insurers cannot go to the courts at all and that is a key difference. There are no grounds in which insurers can get around the CARS process; they have to live with its decision and the credibility of the CARS process will be tested on whether insurers stay in the system. If the Government does not get the CARS system right, insurers who find the system unsatisfactory will leave the system.

The Government is placing great faith in changing the culture and in the CARS process delivering. The CARS process does lock insurers out of the courts with respect to claimants and that is why it is important to get this measure right. The Government has taken a view that is far more sympathetic to the cause of claimants and their problems with respect to the CARS process, either in the settling down phase or some time in the future not delivering for claimants. The purpose of the cost penalties is to ensure that claimants proceed to court only where there is a clear case for doing so and to ensure that the CARS process does not become a testing of the waters. A solicitor advising a client may be unsure about a matter and may suggest taking it to CARS and, if the desired result is not forthcoming, may take the matter one step further. This should not be a testing of the waters but as far as possible it should be the final point of resolution for claims.

As I said before, the Government acknowledges that there are complex cases at the extreme end where the skills of barristers and the judiciary will need to be brought to bear on questions of disputed liability and evidentiary and causation matters. There is still a provision for those matters to go to the court, but the Committee is now dealing with matters that are fairly clear-cut and where the CARS process will be adequate to deal with those matters, in spite of certain difficulties that may be encountered. The Government is seeking to have the culture changed, with the knowledge that many abuses exist in the current system with respect to insurers, and that has been evident from the pricing situation that the Government has sought to address and I believe has addressed. The Government has looked at a whole range of marketing or so-called acquisition costs. In some cases it has been quite tough and continues to be tough.

It would be fairly obvious that nobody seeks to become a victim of a motor vehicle accident; it is simply a question of fate that it happens to some unfortunate persons. Obviously, the Government is trying to look after their interests but in effecting this culture change we must be concerned that the mediatory proposals under the CARS system remain the primary method by which those victims, especially victims of car smashes with the intermediate level injuries, are dealt with by the CARS process. It is expected that the great majority of claimants will accept the assessments of CARS. That is the expectation of the Government - I state that as honestly as I can.

The Motor Accidents Authority has conducted market research amongst claimants and victims. The chief concern expressed about the current system is the amount of time it takes. This also relates to compassion towards victims. One should not forget that without CARS, which the Government believes will be much quicker and will deliver results in a more timely fashion, more time will elapse because legal action is lengthy.

The Hon. P. J. Breen indicated the types of time frames, even in the District Court, that these actions can take. The Hon. Dr A. Chesterfield-Evans said he had concerns about the way solicitors do business. There is a very valid reason why solicitors go through the exercise of creating and systematically collecting a file, but once that file is open two things start ticking: a time clock - it can be a very long
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time before one gets into a court of law - and a fee clock. That is a feature of the claimant’s side of costs in the system. We are not talking about victims but their solicitors and barristers.

That is really what this is about. It takes a long time to get a decision from the court and that significantly increases the costs that the victims, insurers or, at the end of the day, the system have to pay. The Government knows from research, from anecdotal evidence and from members of the Legislative Assembly, who have people attend their electorate offices and spend time talking to the community, that timeliness, particularly frustrations about delay, is the biggest concern. Members of the Legislative Assembly speak to groups representing catastrophic victims and to people giving anecdotal accounts about claimants of relatively minor claims. Despite the relative generosity in this State of the MAA scheme and its large range of benefits for victims compared to schemes in Victoria and the Australian Capital Territory, the principal frustration of claimants about the way the system works is the time and amount of mystifying processes involved with some aspects of legal practice.

It must be acknowledged that when legal practitioners are involved an expectation is created as to entitlement and claimants may be encouraged to pursue claims that are perhaps unrealistic. This also results in higher fees being paid to legal practitioners. When I make that remark I am not referring to the vast majority of legal practitioners in this State. I have a great deal of confidence and faith in legal practitioners, as I do in medical practitioners, in this State. However, it must be conceded that a significant amount of legal practice is based on motor accidents. In addition, people who seek to maintain a level of business will find all sorts of reasons to retain such work for their practice, rather than have it assessed by a system that is much less likely to require their skills.

Honourable members may have noticed some apprehension about these provisions by some members of the bar, the Law Society and the legal profession. The vast majority of ethical legal practitioners practising in this area - which represents the vast majority of those who specialise in aspects of this work - would be prepared to accept these kinds of provisions, although obviously there is formal opposition from the Law Society and the bar. I understand that the Legal Services Commissioner alluded to this in the evidence that he gave to the Standing Committee on Law and Justice. He certainly made explicit reference to a recent paper given to the green slips conference in March.

In that paper the commissioner noted that the biggest source of complaint about legal practitioners was in relation to motor accident matters. When a claimant first sees a lawyer he gives the claimant an indication of the likely value of his claim, but when the matter comes to hearing - perhaps some years later - the claimant is put under pressure, often by his legal council and legal advisers, to accept an offer of settlement well below what he was originally led to believe would be the result. I gave that as a narrative rather than as an anecdote, because no specific instance is claimed.

Most people have observed - and the Hon. P. J. Breen, as a practising solicitor, would be aware of this practice - that there is a tendency for that to happen with regard to legal advice. Who is a claimant to listen to in this current competitive, combative culture? Because of this culture insurers are prone to being a bit paranoid and they go to a defendant’s solicitors to try to slow down claims. We do not have sufficient sanctions built into the system to prevent unethical behaviour on the part of insurers. This is a competitive business; insurers are competing with one another in an attempt to be meaner to clients. We are trying to change that culture, but it is a hard thing to do. Solicitors are in a very competitive business. We are not just talking about one amorphous group of solicitors; there are different firms with different approaches and attitudes to the ethics of dealing with those sorts of clients.

A number of ethical solicitors practising in this area have told me that they are inclined to tell claimants to accept claims that they think are reasonable because they do not want to put them through the agony of a prolonged hearing or subject themselves to underwriting medico-legal costs. I emphasise that this legislation is not about punishing claimants; it is not about punters or about victims; it is about changing the culture and the way in which solicitors and barristers practise the law in this area. We must be tough in this area. We require a short, sharp jolt before we can effect such changes. I have referred to a practice of which many people would be aware and to which many solicitors would admit.

Earlier the Hon. J. F. Ryan alluded to a victim who is being pursued by a substantial bureaucracy - a big corporate entity, such as an insurance company - that is angry because it has been persuaded to adopt a system which encourages an adversarial attitude. That victim will go to a solicitor in whom he can place his trust. The same thing occurs in the medical profession. People place trust in a medical practitioner. I have been in a
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position at various times when I have had to place my reputation and other matters into the hands of a solicitor. All honourable members would be aware of the trust that develops between a solicitor and a client. On the whole, that is a benevolent feature of our justice system, but on occasions it can be abused.

It is acknowledged that some solicitors and barristers practising in this area of the law may be inclined to exaggerate possible claims. They would not necessarily be lying; they could be telling the truth. There are possible outcomes but those outcomes, which might be exaggerated, might lead to protracted delays. I do not suggest that the majority of solicitors who are practising in this area are unscrupulous, but we must be mindful of tendencies and trends that are occurring. Some of the more ethical plaintiff law firms may have been squeezed by those who are more prone to robust methods of marketing their services. Some unscrupulous people in the legal profession, or even earnest lawyers anxious to protect themselves from ethical or real obligations in relation to professional liability, may inflate a claimant’s expectations early in the case, only to have those expectations dashed later.

There is no doubt that this practice will continue unless we change the culture in the scheme. The Government’s legislation, which intends to address these issues, will produce results fairly quickly. Claimants will be pressured to continue with cases by being led to believe that they will get a better result than might be achieved through the Claims Assessment and Resolution Service [CARS]. The purpose of these cost penalties is to concentrate the minds of both the claimant and the solicitor. The solicitor has ethical and other professional obligations to indicate to the client what are the real risks in this kind of case. Many solicitors carry part of the costs of their clients in these matters. The intention of the cost penalties is to focus both the practitioner’s and the claimant’s mind on this problem.

The cost penalties are not an onerous imposition upon the claimant, as they are no more than those that are applied in the current system. The Hon. I. M. Macdonald has already canvassed that matter. I do not intend to go into any further detail other than to indicate that, if an insurer makes an offer of compromise under the District Court rules, and the result at court is not greater than the amount of the offer, the claimant must pay the insurer’s legal costs, which sometimes are significantly in excess of the figure suggested in the amendment moved by Reverend the Hon. F. J. Nile. That is the point of the Government’s provision.

The position is even clearer when it comes to the Government’s bill as the cost penalties apply in relation to an independent assessment by CARS and not to an offer by the insurer. So we have already booted insurers out of the system. We have already told them, "You do not have any appeal rights. We are dealing only with claimants’ solicitors." I am talking now about both ends of that spectrum.

It is a nonsense to suggest that this will impose some new penalty upon claimants. The offer of compromise rules for legal costs are for the whole matter and are not limited in value. That is why the Government is concerned about the amendment of the Hon. P. J. Breen. If the amount is capped it might again encourage claimants to take the matter to court, where they are led to believe that they can improve the amount by more than the capped fees. It opens the gate to misuse of the system, and may negate the culture change that the Government is trying to achieve. We might be creating opportunities for lawyers who are less than scrupulous to improve their returns by increasing legal fees as matters are taken to court. More likely than not, this will be the ultimate expense of the claimant and, if not the claimant, the ultimate expense of the system.

The Government’s legislation is seeking to create a fair and just alternative to determining compensation without the need to go to court. If the CARS assessor gets it wrong, the claimant can comfortably go to court knowing that the assessment will be corrected and that the full fees will be paid. However, if claimants simply want more and they cannot reasonably justify seeking that higher settlement - whether through incitement from a legal or other practitioner - they will need to think carefully about doing so. I repeat the Government’s position: The Government is prepared to withdraw so much of its current amendment as is required to give effect to the amendment moved last night by Reverend the Hon. F. J. Nile.

The Hon. J. F. RYAN [11.48 a.m.]: We appear to have refreshed our arguments and we are repeating much of what was said in debate on the second reading of the bill. The Minister, in responding to these amendments, simply restated that the Government intends to use the 20 per cent barrier as a means of discouraging people from taking matters to court. The Opposition’s view is that the proposed cost penalties on accident victims are severe and would force seriously injured victims to accept inadequate offers rather than take the risk of a cost penalty. We believe that the 20 per cent rule is simply too much.

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Two Government speakers have argued that the 20 per cent penalty reflects what is occurring now. I do not believe that to be the case. At hearings of the Standing Committee on Law and Justice, at which the committee considered the report of the Justice Research Centre, one question which was asked related to whether insurers were litigating too many matters. Mr Austin Gabriel, who represented the Insurance Council of Australia at those hearings, gave me a number of examples of claimants who had gone to court and who, on a number of occasions, had won settlements no higher than the offers of settlement made by insurers.

There was no complaint from Mr Gabriel at that time to the effect, "Bad luck for them, they had to pay our costs as a result." The 20 per cent penalty does not operate now. Currently if a claimant does not get a verdict which is higher than the offer of settlement he pays the costs. Under this bill any verdict above the offer of settlement - not whether it was 20 per cent more - would be a benchmark for whether a claimant gets costs. Do not be surprised that the Government is creating a new benchmark for winning court cases.

The Hon. I. M. Macdonald: That’s nonsense.

The Hon. J. F. RYAN: The honourable member claims that is nonsense. When the previous amendments to this scheme were introduced in 1995 or 1996 insurers complained that a new benchmark was being created. It was suggested that claimants would go to court and it would take the deductible figure - which I think was then $35,000 - into consideration. The court would decide whether the plaintiff was going to win and it would include the $35,000 deductible figure. Eventually claims under that scheme became higher. It is not hard to imagine a court taking the view that if it awarded less than 20 per cent the claimant would lose. Courts would make sure that awards were more than 20 per cent so the claimant would win. I simply warn the Government that it might be creating a brand-new benchmark under which the scheme might blow out on another occasion. I am not certain that that will occur. I was a chalkie in my former life, not a lawyer.

The Hon. J. J. Della Bosca: What’s that?

The Hon. J. F. RYAN: A teacher. I had little interaction with, or knowledge of, the legal system.

The Hon. I. M. Macdonald: Come on, you must have come to the end of your speech.

The Hon. J. F. RYAN: Government members gave speeches of more than 20 minutes. I shall speak for about five minutes. I do not profess to know a great deal about the legal profession, but I was told that that was a feature of the old system. Honourable members should not be surprised if the 20 per cent buffer comes back to bite the Government. The Minister said that this amendment will not affect punters but will discourage the unscrupulous behaviour of certain lawyers.

The Hon. J. J. Della Bosca: Or ill-advised behaviour.

The Hon. J. F. RYAN: Or ill-advised behaviour, as the Minister said. I do not care which it is, but it is the punters who will pay. The Government has already accepted the principle that it is reasonable to limit the amount that punters pay. The Government has accepted that by advising Reverend the Hon. F. J. Nile to move an amendment that it will accept. The one punchline in this debate is that whilst a series of amendments related to the amount under which this principle would operate - whether it is $15,000, $20,000 or $25,000 - included in the amendment of the Hon. P. J. Breen are the words, "or such other amount as is determined by the Authority by order published in the Gazette". In other words if $15,000, $20,000 or $25,000 is chosen the Government will publish the figure. I am not quite sure whether this matter has been debated.

I believe that the House should indicate the principle by which it expects to abide, and support the lower amount. The Government should indicate what it means so that if it increases the amount the blame will fall on it when punters ultimately have to pay the amounts. That is the only contribution I want to make in regard to that matter. The Opposition opposes clause 148. However, the Opposition is prepared to vote for the best possible amendment it can get in order to structure the question that goes before the Committee in the event that its motion to oppose the clause is lost. In any event, the Opposition believes that under the scheme operating in Victoria - which has been conceded all round is draconian and bad - if the offer of settlement in court is beaten the insurer’s costs do not have to be paid by the claimant. The claimant has to pay only his own costs and, in some instances, he does not even have to do that.

The Hon. R. S. L. JONES [11.54 a.m.]: If a $20,000 cap were applied it would put more pressure on insurers to settle at a reasonable rate than otherwise would be the case. Insurers would be
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quite happy to take $25,000, and maybe slightly less happy to accept $20,000. It will put pressure on them.

The Hon. J. S. TINGLE [11.54 a.m.]: I seek clarification. I, along with a lot of other honourable members, am becoming confused. Did the Minister, at the end of his contribution, say that the Government is prepared to withdraw the substantive part of its amendment?

The Hon. R. S. L. Jones: It already has.

The Hon. J. S. TINGLE: Was that done last night? Mr Chairman, would you clarify that?

The Hon. J. HATZISTERGOS [11.56 p.m.]: Two aspects of the contribution of the Hon. J. F. Ryan require a response. First, the honourable member indicated that the judiciary might use these costs provisions as a means to override the intention of the legislation by granting awards or approving settlements in excess of 20 per cent so that costs orders can be made pursuant to the provisions of this legislation. That cannot occur because under proposed section 112 the CARS assessment cannot be revealed to the court until it has made its assessment and is considering the question of costs. Those CARS assessments which are provided in a certificate will not be able to be revealed because of the effect of proposed section 112.

Second, the Hon. J. F. Ryan said that these costs provisions do not, in his view, reflect the current position because people make offers of settlement and if the court makes an award greater than the offer of settlement there is no cost penalty. There is a world of difference between an offer of settlement by an insurer in the form of a letter and a CARS assessment certificate. A CARS certificate is not analogous to an offer of settlement made by an insurer; a CARS certificate is analogous to an arbitrator’s award. As the Parliamentary Secretary indicated in his response, currently as a rule of thumb the District Court awards costs against an appellant on a rehearing in the event that an appellant does not better the award of the arbitrator by the amount of 20 per cent. For those two reasons the contribution of the Hon. J. F. Ryan was incorrect.

The CHAIRMAN: Order! The Hon. P. J. Breen has moved his amendment No. 1, to which Reverend the Hon. F. J. Nile has moved that "$15,000" be omitted and replaced with "$25,000", to which the Hon. R. S. L. Jones has moved that that figure be omitted and be replaced with "$20,000". I propose to put the amendments in reverse order. The Committee will deal first with the amendment of the Hon. R. S. L. Jones, which seeks to insert "$20,000" in paragraph (b).

Question - That the amendment of the Hon. R. S. L. Jones to the amendment be agreed to - put.

The Committee divided.
Ayes, 17

Mr Breen Mr R. S. L. Jones
Mr Bull Mr Lynn
Dr Chesterfield-Evans Dr Pezzutti
Mr Cohen Ms Rhiannon
Mrs Forsythe Mr Ryan
Mr Gallacher Dr Wong
Miss Gardiner Tellers,
Mr Hannaford Mr Jobling
Mr Harwin Mr Moppett
Noes, 20

Dr Burgmann Mr Oldfield
Mr Corbett Ms Saffin
Mr Della Bosca Mrs Sham-Ho
Mr Dyer Mr Shaw
Mr Hatzistergos Ms Tebbutt
Mr Johnson Mr Tingle
Mr M. I. Jones Mr Tsang
Mr Macdonald
Mrs Nile Tellers,
Rev. Nile Mr Manson
Mr Obeid Mr Primrose
Pairs

Mr Gay Ms Burnswoods
Mr Samios Mr Egan

Question resolved in the negative.

Amendment of the Hon. R. S. L. Jones negatived.

The CHAIRMAN: The Hon. P. J. Breen has moved Reform the Legal System amendment No. 1, to which Reverend the Hon. F. J. Nile has moved an amendment to replace "$15,000" with "$25,000" in subclause (b).

Amendment of Reverend the Hon. F. J. Nile to the amendment agreed to.

Amendment of the Hon. P. J. Breen as amended agreed to.

Page 1707

The Hon. J. F. RYAN [12.07 p.m.]: I move Liberal Party amendment No. 19:
    No. 19 Page 86, clause 149, lines 24-28. Omit all words on those lines. Insert instead:
      149 Costs where court proceedings
      (1) This section applies where a claim is determined by court proceedings (including court arbitration).

The purpose of this amendment is to allow claimants to recover arbitration costs as well as court costs. In the case of a claimant who has incurred costs for information that is used in court arbitration proceedings, it may not be clear that when the matter gets to court that the claimant is entitled to recover those costs. We believe that claimants, if successful in court, should be able to recover such costs.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.08 p.m.]: Given the length of the debate on the last amendment and the fact that the Liberal Party amendment is based on the removal of clause 148 of the bill, which we have just debated, I do not propose to speak to this amendment.

Amendment negatived.

The CHAIRMAN: Order! The question is: That clause 148 as amended stand part of the bill.

The Committee divided.
Ayes, 25

Mr Breen Mr Obeid
Dr Burgmann Mr Oldfield
Mr Cohen Ms Rhiannon
Mr Corbett Ms Saffin
Mr Della Bosca Mrs Sham-Ho
Mr Dyer Mr Shaw
Mr Hatzistergos Ms Tebbutt
Mr Johnson Mr Tingle
Mr M. I. Jones Mr Tsang
Mr R. S. L. Jones Dr Wong
Mr Macdonald Tellers,
Mrs Nile Mr Manson
Rev. Nile Mr Primrose
Noes, 12

Mr Bull Mr Harwin
Dr Chesterfield-Evans Mr Lynn
Mrs Forsythe Dr Pezzutti
Mr Gallacher
Miss Gardiner Tellers,
Mr Gay Mr Moppett
Mr Hannaford Mr Ryan
Pairs
      Ms Burnswoods Mr Jobling
      Mr Egan Mr Samios

Question resolved in the affirmative.

Clause agreed to.

The Hon. P. J. BREEN [12.17 p.m.]: I refer to Reform the Legal System amendment No. 2 circulated on sheet C-021A. This amendment will allow law consumers injured on the road in a work-related accident, or injured while travelling to and from work, simply to notify the Motor Accidents Authority of their intention to make a claim. Once a workers compensation claim is resolved, or before the expiration of three years, an injured worker could pick up the motor vehicle accidents claim. A decision could then be made as to whether a lump sum workers compensation settlement or a motor vehicle accident claim is the appropriate remedy.

The current situation is that people who are injured on New South Wales roads whilst they are at work, or are injured in circumstances that give rise to what is called a journey claim, that is, travelling to and from work, may run parallel claims. They are advised by their lawyer, and correctly, that their workers compensation claim is the first remedy and that, after the workers compensation is determined and after their injuries have settled down, they can make an election as to whether or not they should also seek or receive a motor vehicle accident settlement.

A consequence of the present system is that injured people are involved in two sets of proceedings: one involving pursuit of their workers compensation rights, and the other involving pursuit of their rights as motor vehicle accident victims. Obviously, those people have the stresses and difficulties of running two separate cases. As a result they often have twice the amount of legal and medical expenses. The purpose of the amendment is simply to draw some kind of line in the sand against what is patently a waste of money - a waste of the insurance company’s money, the insurer’s money, and so on.

The Kennett Government in Victoria addressed the problem of parallel workers compensation and motor vehicle accident claims in the usual heavy-handed Kennett way. In November 1997 amendments were passed to both the workers compensation legislation and the motor vehicle accidents legislation to the effect that a person with a workers compensation claim had no parallel third party claim and vice versa. For example, if a taxidriver in Victoria is involved in an accident, and
Page 1708
the passenger and taxidriver are both injured, one person claims under workers compensation legislation and the other claims under motor accidents legislation. I am not sufficiently familiar with the Victorian system to know how effective that is.

I suspect it is a bit confusing. But it cannot be more confusing than the situation we have in New South Wales. The Hon. Dr B. P. V. Pezzutti informs me that approximately one-third of people injured in motor vehicle accidents are either engaged in a journey to or from work or are involved in work: couriers, taxidrivers, truck drivers, et cetera. I am not suggesting that we need amendments that are as tough as those that were introduced in Victoria, but if we are serious about reducing the cost of green slips we ought to at least do the figures on what may be a vast and hidden expense for New South Wales motorists. On that basis I am grateful for the opportunity to speak to the amendment.

The Hon. Dr B. P. V. PEZZUTTI [12.21 p.m.]: Will the Minister, either at this stage or at some later stage, produce the number and cost of what would be called third party claims during a period of employment? In other words, if I were injured by another person - as part of my employment as a member of Parliament I am employed all the time - I would be able to claim under workers compensation. But if I were not at fault I would be able to claim under third party insurance. If I am in an accident and I am at fault I can claim workers compensation, because, as I understand the policy coverage for members of Parliament, I am covered for all sorts of accidents. If I am not at fault I should claim under third party. However, I would not do that; I would claim under workers compensation because the previous statements in the bill give workers compensation precedence. Do I understand that clause correctly?

The Hon. J. J. Della Bosca: Yes.

The Hon. Dr B. P. V. PEZZUTTI: How much of what would otherwise be third party is loaded into motor vehicle third party, which could substantially make workers compensation more expensive, but at the same time make third party less expensive? There are different rights. I have to be honest and say that I am not sure of the difference in rights and whether it is more advantageous to be injured at work or under this policy. But I do know that if there is an opportunity there will be agitation to try to take the person out of one scheme and put that person into the other, which is what one would expect one’s lawyer to advise in one’s best interests.

I am concerned, as the Hon. P. J. Breen was concerned, that there are two options. The first is the shopping for jurisdiction, which may or may not be erased by this bill. The second is the way in which third party accident claims are legitimately loaded into workers compensation to make it less affordable, giving us a State-to-State disadvantage. That State-to-State disadvantage is more obvious when one comes from an area like the North Coast of New South Wales, as I do, and the placement of jobs is on one side of the border or the other. I am not trying to move away from the bill, but payroll tax in Queensland, for example, is significantly cheaper than it is in New South Wales. If that is the case I urge the Minister to give us some understanding of how much of the cost, which could be seen as a work-related but third party matter, will be loaded into workers compensation under the bill.

If he cannot provide an answer now, is it possible for Trowbridge or someone else to do an assessment for us? The information I have received from the Law Society, via the Australian Medical Association - this is at arm’s length and separated - is that one-third of the claims under third party are for people who are engaged in a work-related activity travelling either to or from work, or who are actively engaged in employment. Even though the number of cases is considerable, I do not believe that they become significant injuries, so there might be a separation of the nature of the injuries. For example, as a member of Parliament, unless I am fishing or doing something of a private nature, I am covered vicariously by workers compensation while travelling around the countryside, or for anything I do while I am away from home.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.25 p.m.]: The Hon. Dr B. P. V. Pezzutti agitated a whole series of complex questions that have been the subject of considerable discussion between officers of the Motor Accidents Authority [MAA], my staff, the Hon. P. J. Breen and me directly and indirectly in the past couple of weeks. The simple answer to his question is that the MAA is quite capable of providing a brief that should answer his questions. I will be quite happy to make that available to the House and to the Hon. Dr B. P. V. Pezzutti when it is available. However, as the Hon. P. J. Breen has not moved his amendment I suggest that we continue with business.

The Hon. Dr A. CHESTERFIELD-EVANS [12.26 p.m.]: It is an extremely sensible idea. The Hon. P. J. Breen should be praised for thinking of it. I am amazed that it is not already in the bill. It is
Page 1709
disappointing that costings are not available. I repeat my earlier question: What came out of the Shelley Miller working party and why was it not thought of then? It is surprising, if all these experts were together looking at different aspects of the legislation, that it was not thought of. Surely this is a great way to save money when we want to cut two sets of parallel legal costs that are both funded. I urge honourable members to support the amendment.

The Hon. J. F. Ryan: He hasn’t actually moved it.

The Hon. Dr A. CHESTERFIELD-EVANS: I am assuming that he will move it. If he does not move the amendment I would hope that the Government would take up this good idea and move an amendment. I can understand that some crossbench members might not want to write the Government’s legislation. I do not have such difficulties. I believe that legislation comes out of the Parliament and, therefore, the Government should get used to the precedent of incorporating a good idea from the crossbench. I hope it will adopt this idea. If it is not moved as an amendment, the Government should move it and take the credit for doing so.

CHAIRMAN: Do you propose to move your amendment?

The Hon. Dr A. CHESTERFIELD-EVANS: Are we not debating the amendment of the Hon. P. J. Breen?

CHAIRMAN: No amendment is before the Committee.

The Hon. Dr A. CHESTERFIELD-EVANS [12.28 p.m.]: In that case I move Australian Democrats amendment No. 46, but, by leave, I would like to change it slightly so that rather than replacing paragraph (c) it becomes paragraph (e) in clause 159 (1):
    No. 46 Page 92, clause 159, lines 3-5. Omit all words on those lines. Insert instead:
      (e) relating to the provision of information concerning claims and profits, or

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.28 p.m.]: In light of the alterations indicated by the Hon. Dr A. Chesterfield-Evans, Australian Democrats amendment No. 46 as an addition to provisions in clause 159 is acceptable to the Government.

Amendment agreed to.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.29 p.m.], by leave: I move Government amendments Nos 59 and 60 in globo:
    No. 59 Page 105, clause 177. Insert after line 24:
      (6) The Authority is to give the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission notice of its intention to apply for an order under this section.
      (7) The Australian Prudential Regulation Authority and the Australian Securities and Investments Commission each has a right to appear and be heard in proceedings for an order under this section.
    No. 60 Page 108, clause 182. Insert after line 33:
      (2) The Minister is to consult with the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission before making an order under this section.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.30 p.m.]: On the expectation that amendments to this clause will not be opposed, I commend the amendments to the Committee and reserve my rights if they are opposed.

The Hon. J. F. RYAN [12.30 p.m.]: The Minister will be pleased to know that they are not opposed.

Amendments agreed to.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.32 p.m.]: The Government has a number of amendments which deal with the same issues. By leave, I move Government amendments Nos 62, 63, 64, 65 and 68 in globo:
    No. 62 Page 119, clause 205, line 10. Omit "17". Insert instead "12".
    No. 63 Page 119, clause 205, line 16. Omit "4". Insert instead "2".
    No. 64 Page 119, clause 205, line 19. Omit "4". Insert instead "2".
    No. 65 Page 119, clause 205, line 22. Omit "3". Insert instead "2".
    No. 68 Page 141, schedule 2, clause 10, lines 2 and 3. Omit "9 members". Insert instead "7 members".

I indicate the Government’s desire to ensure that the package of these amendments through the
Page 1710
Committee is consistent with the process of clarifying the issue which has already been debated; that is, the make-up, personnel and approach of the Government to the Motor Accidents Council. I commend the amendments to the Committee and reserve my rights in further debate.

The Hon. J. F. RYAN [12.33 p.m.]: The Opposition disagrees with the amendments, but will not divide the Committee. Essentially, the amendments relate to an earlier argument about the roles of the Motor Accidents Council and the Motor Accidents Authority. The amendments further strengthen the proposal that the scheme ought to be oversighted and supervised by a bureaucracy rather than a council of stakeholders. Amendments 62 to 65 would emasculate further the Motor Accidents Council by reducing the number of stakeholder representatives and hence reduce its effectiveness and expertise base, and the degree to which it can arguably contribute to the scheme. The provisions essentially make the Motor Accidents Council a sideline entity with no real supervisory role, or much role at all, over the scheme. It will have very little chance to implement change or press for change within the scheme.

The Hon. Dr A. CHESTERFIELD-EVANS [12.34 p.m.]: It would be convenient if I move amendments which deal with the same material. By leave, I move Australian Democrats amendments Nos 48 to 53 in globo.
    No. 48 Page 119, clause 205, lines 14 and 15. Omit all words on those lines.
    No. 49 Page 119, clause 205, line 16. Omit "4". Insert instead "3".
    No. 50 Page 119, clause 205, lines 19-21. Omit all words on those lines. Insert instead:
      (d) 3 legal practitioners appointed by the Minister after consultation with the Councils of the Law Society and Bar Association, and the Public Interest Advocacy Centre,
    No. 51 Page 119, clause 205, lines 22-25. Omit all words on those lines. Insert instead:
      (e) 3 health practitioners appointed by the Minister after consultation with the Royal Australasian College of Surgeons, the Royal Australasian College of Physicians and the Royal Australian College of General Practitioners,
    No. 52 Page 119, clause 205, lines 28-30. Omit all words on those lines. Insert instead:
      (g) 3 persons appointed by the Minister after consultation with Injuries Australia, the Brain Injury Association and the Para and Quad Association,
    No. 53 Page 119, clause 205, lines 31 and 32. Omit all words on those lines. Insert instead:
      (h) 1 person appointed by the Minister after consultation with the Australian Consumers Association,
      (i) 1 person appointed by the Minister after consultation with the Australian Physiotherapy Association,

The CHAIRMAN: As there is a conflict between the Government amendments and Australian Democrats amendments Nos 49 and 51, I have allowed the Hon. Dr A. Chesterfield-Evans to move his amendments concurrently.

The Hon. Dr A. CHESTERFIELD-EVANS: Australian Democrats amendments Nos 48, 52 and 53 are not in conflict with the Government amendments. They relate to the same clause and the same philosophical point. The changes to the Motor Accidents Authority vis-a-vis the Motor Accidents Council have put power in the hands of the Minister, certain appointed authority representatives and the bureaucracy, which effectively gives arms and legs to the authority. The authority consists of a small number of people who could not make regulations and therefore would be dependent on the bureaucracy. Government amendments Nos 62 to 65 seek to decrease council membership from 17 to 12.

Not only is the council less powerful, but it has less expertise. If the council is to be powerful and retain its recommendatory function, it needs stakeholders who have expertise. My amendments involve cutting back the number of insurers from four to three; cutting back the number of lawyers from four to three; retaining the number of medical practitioners at three; increasing the representation of injured people to three, some of whom are to be appointed by the Paraplegic and Quadriplegic Association, or the Brain Injury Association; and some from Injuries Australia, who often effectively represent people who are having a great deal of legal difficulty.

To improve the rehabilitation component I wish to add a physiotherapist to the board by having the deputy-chairperson elected by that committee rather than appointed from the Motor Accidents Authority. My intention was to keep the numbers constant at 17 but to increase the representation by injured people and to shore up the expertise by allowing stakeholders to have input into the council. I commend the amendments to the Committee.

The Hon. J. F. RYAN [12.37 p.m.]: I understand that Liberal Party amendments Nos 20, 21 and 22 largely canvass the areas contained in the
Page 1711
amendments moved by the Australian Democrats. To clarify debate, I announce that the Liberal Party will not move its amendments Nos 20, 21 and 22.

The Hon. I. M. MACDONALD (Parliamentary Secretary) [12.37 p.m.]: I will firstly address Government amendments Nos 62, 63, 64, 65 and 68. Government amendment No. 62 relates to clause 205 (1). The bill establishes the Motor Accidents Council, which will monitor the implementation of the medical and claims assessment procedures and advise the MAA or the Minister on any matter it considers should be referred. To improve the operational efficiency of the MAC it is proposed to reduce the membership of the council from 17 to 12. However, there is still a broad cross-section of representatives on the council; two from a number of professions, the MAA and the NRMA, and persons appointed by the Minister.

Government amendment No. 63 relates to clause 205 (1) (c), which proposes, in line with amendment No. 62, to reduce the number of insurance industry representatives on the council from four to two. Government amendment No. 64 relates to clause 205 (1) (d) and proposes, in line with amendment No. 62, to reduce the number of legal representatives on the council from four to two. Government amendment No. 65 relates to clause 205 (1) (e) and proposes, in line with amendment No. 62, to reduce the number of medical representatives on the council from three to two. Government amendment No. 68 relates to schedule 2, clause 10 and proposes that the quorum of the council be reduced from nine to seven in accordance with the changes to the size of the Motor Accidents Council.

I refer to Australian Democrats amendments Nos 48, 49, 50, 51, 53, 56, 57, 58 and 59, relating to clause 205, membership and procedures of the MAC. The Government opposes these amendments and indicates that its amendments relating to membership of the MAC are preferable, as I have outlined. Australian Democrats amendment No 48 to clause 205 is to omit the requirement that the deputy chairperson of the MAA board be the deputy chairperson of the MAC. The Government’s amendments will allow for a more effective and representative council and are therefore preferable.

The Australian Democrats amendment No. 49 to clause 205 (1) (c) will reduce the insurer representation from four to three. The Government opposes this amendment as the Government’s proposed amendments will allow for a more effective and representative council. Proposed amendment No. 50 to clause 205 (1) (d) provides for three legal practitioners on the council instead of four, and their appointment will be in consultation with the Public Interest Advocacy Centre as well as the Bar Association and the Law Society - a somewhat complex arrangement. The Government opposes this amendment as the Government’s proposed amendments will allow for a more effective and representative council.

Proposed amendment No. 51 to clause 205 (1) (e) will require consultation with specified medical associations, including the College of Surgeons, the College of Physicians and the College of General Practitioners. Currently, consultation is with the Australian Medical Association and other health associations as the Minister considers appropriate. The Government opposes this amendment as the Government’s proposed amendments will allow for a more effective and representative council.

In amendment No. 52 the Democrats propose to increase from one to three the injury group representation and specifies the injury groups, including Injuries Australia, the Brain Injury Association and the Paraplegic and Quadriplegic Association. The Government opposes this amendment as the Government’s proposed amendments will allow for a more effective and representative council. Amendment No. 53 of the Australian Democrats again proposes that the Minister consults with the Australian Consumers Association and the Australian Physiotherapy Association about representation of consumer organisations and that this representation increases from one to two. Likewise, the Government opposes this amendment.

The proposal in amendment No. 56 is that the Minister cannot appoint the deputy of the board but, rather, it is the body that recommends the appointment. It is inappropriate that another body makes an appointment to the board, and the Government opposes this amendment. Proposed amendment No. 57 provides for consistency with proposed amendment No. 56 and therefore is opposed. Proposed amendment No. 58 again provides for consistency with proposed amendment No. 56 and is also opposed. Proposed amendment No. 59 provides for consistency with proposed amendment No. 56 and is opposed.

Liberal Party amendments Nos 20, 21 and 22 would increase the number of members on the Motor Accidents Council from 17 to 18 by increasing the number of health practitioners from three to four. The Government has received a number of submissions expressing the view that a council of 17 would be too large to operate
Page 1712
efficiently. There is a lot of merit to these arguments. The Government has proposed an amendment to reduce the numbers from 17 to 12 in order to improve the operating efficiency of the Motor Accidents Council. However, a balance between the various service providers is retained by reducing the number of insurers, lawyers and medical practitioners. The Government opposes the Liberal Party amendments as they would simply make the Motor Accidents Council more unwieldy than it is.

Government amendments Nos 62, 63, 64, 65 and 68 agreed to.

The CHAIRMAN: The success of the Government amendments rules out the amendments moved in globo by the Hon. Dr A. Chesterfield-Evans.

The Hon. Dr A. CHESTERFIELD-EVANS [12.43 p.m.], by leave: I move Australian Democrats amendments Nos 56, 57, 58 and 59 in globo:
    No. 56 Page 131, schedule 1, clause 2. Insert after line 14:
      (2) The person appointed as a deputy is to be a person recommended by the person or body that recommended the appointment of the part-time director.
    No. 57 Page 137, schedule 2, clause 1, line 8. Omit ", the Deputy Chairperson".
    No. 58 Page 137, schedule 2, clause 1, lines 12 and 13. Omit all words on those lines. Insert instead:
      Deputy Chairperson means the person holding the office of Deputy Chairperson of the Motor Accidents Council.
    No. 59 Page 137, schedule 2. Insert after line 14:
      2 Deputy Chairperson
      (1) The Motor Accidents Council is to elect a Deputy Chairperson of the Motor Accidents Council from among its appointed members.
      (2) The Deputy Chairperson holds office as Deputy Chairperson until he or she ceases to hold that office.
      (3) The Deputy Chairperson ceases to hold office as Deputy Chairperson if he or she:
        (a) resigns the office by instrument in writing addressed to the Motor Accidents Council, or
        (b) is removed from that office by the Motor Accidents Council, or
        (c) ceases to hold office as a member of the Motor Accidents Council.
      (4) The Motor Accidents Council may remove a person from office as Deputy Chairperson of the Motor Accidents Council at any time.

These amendments merely make it clear that the deputy chairperson is elected by the council rather than appointed by the authority. These provisions strengthen the control of the council over its own destiny and should not make any administrative difference, in the sense that the chair is the same.

The Hon. I. M. MACDONALD (Parliamentary Secretary) [12.44 p.m.]: The Government opposes those amendments for the reasons already outlined.

The CHAIRMAN: As these amendments relate to the schedules, I should put them to the Committee later, so they are dealt with in order. However, as the Committee has no objection to dealing with them now I will put them to the Committee.

Amendments negatived.

The Hon. R. S. L. JONES [12.45 p.m.]: I move my amendment No. 2:
    No. 2 Page 130, clause 229, lines 1-4. Omit all words on those lines. Insert instead:
      (2) The review is to be undertaken as soon as practicable after the period of 2 years from the commencement of this Act and a report of the outcome of the review is to be tabled in each House of Parliament within 12 months after the end of that period of 2 years.
      (3) The review is to consider all aspects of the scheme established by this Act, including the following matters:

(a) the impact of the 10% permanent impairment threshold referred to in section 128 and the MAC Medical Guidelines on persons injured in motor vehicle accidents.
        (b) the level of competition between licensed insurers in setting premiums for third-party policies (having regard to the financial information provided to the Authority under this Act),
        (c) whether the new procedures introduced by this Act to resolve motor accident claims have stabilised the level of premiums for third-party policies,
        (d) whether further changes are needed to the scheme.

My amendment will ensure that the review of the legislation provided for in clause 229 occurs within two years of the commencement of the scheme
Page 1713
rather than five years as originally proposed. This legislation will force significant changes on the motor accident scheme in order to reduce the cost of premiums for one year. It will cut claimants’ benefits and reduce legal costs at the same time as it introduces a more administrative-based claims system. The crossbenchers have been receiving large volumes of information from various stakeholders about the implications of the legislation since the bill was introduced on 3 June.

Some representations have expressed grave concern about the cuts to claimants’ benefits and, in particular, the requirement that 10 per cent of whole-of-body impairment be reached before non-economic compensation will be paid. Furthermore, it is not known whether the level of premiums will increase after insurance companies are no longer required to offer premiums at the set rate of $330. The $100 reduction in premiums may just be a 12-month hiatus for the car-owning public. I hope the new system does work and the cost of premiums comes down and stays down. I would like to ensure that the savings have not been achieved at the overwhelming expense of those injured in motor accidents.

An early and targeted review will ensure that Parliament is informed about whether the legislation does disadvantage injured persons and whether the culture has changed and premiums have fallen. Therefore, the amendment specifies certain elements that must be considered in the review of the Act, such as the impact of the 10 per cent impairment threshold and the MAA guidelines on persons injured in motor accidents; whether the level of competition between insurers has increased; and whether the level of premiums has stabilised as a result of the initiatives in the legislation.

The amendment requires that the review be completed and tabled in Parliament within one year. That is, at the end of three years we will be in a position to assess whether the changes we are making now have made any difference to the cost of premiums. I have consulted with the Australian Plaintiff Lawyers Association and the National Roads and Motorists Association about this review. Both organisations have advised that they fully support the amendment, and I understand the Government also supports it.

The Hon. J. F. RYAN [12.47 p.m.]: There is nothing like a good review of legislation like this, and I have no doubt it will prove very interesting, particularly considering when it will be completed. The Opposition supports the amendment proposed by the Hon. R. S. L. Jones.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.48 p.m.]: For a number of reasons the Government finds the amendment proposed by the Hon. R. S. L. Jones acceptable, and applauds it.

Reverend the Hon. F. J. NILE [12.49 p.m.]: I mentioned during the second reading stage that there should be a review of the bill because, as we know, it is only by testing some of the aspects of the bill in operation that we can know their full impact. I understood that the Government was prepared to accept that, but there was also an argument advanced that in many ways legislation of this type, which affects motor accident victims, really involves assessment over a five- to 10-year period. The amount of information that can be gathered in two years is debatable, but there is no harm in having a progress report. It may be that a more extensive review should still take place at the end of the five-year period.

Amendment agreed to.

The Hon. Dr A. CHESTERFIELD-EVANS [12.50 p.m.]: I move Australian Democrats amendment No. 55:
    No. 55 Page 124. Insert after line 2:
        212 Motor Accidents Compensation Scheme Ombudsman
        (1) There is to be a Motor Accidents Compensation Scheme Ombudsman, who is to be an Assistant Ombudsman appointed under the Ombudsman Act 1974 with the approval of the Minister.
        (2) The function of the Motor Accidents Compensation Scheme Ombudsman is to receive and act on complaints in connection with the operation of the motor accidents scheme under this Act from:
          (a) injured persons or other claimants under this Act, or
          (b) health professionals providing services to those injured persons.
        (3) The Motor Accidents Compensation Scheme Ombudsman has, in relation to any such complaint, such functions as are prescribed by the regulations. The regulations may, for that purpose, apply to any such complaint any functions of the Ombudsman in respect of complaints under the Ombudsman Act 1974 (whether with or without modification).
        (4) The Motor Accidents Compensation Scheme Ombudsman is required to make an annual report about complaints dealt
Page 1714
with under this section (being complaints classified by the type of complaint, the insurer involved and the result of the complaint).
        (5) Any such report is to be made available to the Authority, the Minister and the public and is to be tabled in Parliament by the Minister. The regulations may apply to any such report any provisions of the Ombudsman Act 1974 relating to reports of the Ombudsman.
        (6) The Authority is required to pay out of the Motor Accidents Authority Fund all payments required to meet the remuneration, allowances, office accommodation and other associated costs of the Motor Accidents Compensation Scheme Ombudsman and of the staff of the Office of the Ombudsman engaged for the purposes of this section. A certificate of the Ombudsman as to the amount of those payments is conclusive.

Acceptance of this amendment would mean that part of the Ombudsman’s office would have a review role. This is basically a feedback loop for the battlers. In my opinion, WorkCover has not been very successful in providing a feedback loop to address problems in the workers compensation system. Third party victims do not have a panel to which they can go to have their problems addressed or included in a report which will eventually be discussed by a review panel.

The panel would be able to make global recommendations when the review suggested by the Hon. R. S. L. Jones takes place. Effectively, this proposed amendment will provide another feedback mechanism. I think that is quite important. Complaints can be forwarded to an existing office and will therefore not involve a great deal of extra expense.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.51 p.m.]: The Government opposes Australian Democrats amendment No. 55. I reserve my rights to speak after I know whether there will be any more contributors to debate on this clause.

The Hon. Dr B. P. V. Pezzutti: Are you going to say why you are opposing it, or not?

The Hon. J. J. DELLA BOSCA: I do not think I am obliged to explain why I oppose it. As the Hon. Dr B. P. V. Pezzutti has mentioned it, though, I will comment. I did not want to waste the time of the Committee. Briefly, I think this amendment is an example of accountability that will add a level of complexity to the scheme without providing any benefit to the public interest. The amendment duplicates a role already performed by the Motor Accidents Authority which deals with complaints about the scheme.

As I have said on countless occasions in this Parliament during debate on this issue and outside the Parliament, the purpose of the bill is to change the culture, strengthen the regulator, and give it real and serious powers. It is a primary role of the Motor Accidents Authority to address these problems and to look after the real and key stakeholders, that is, the motorists of New South Wales and the victims of motor accidents. That is the Motor Accidents Authority’s job and that is what it will do. It will exercise its new powers to issue claims-handling guidelines and will ensure compliance with those guidelines.

The Government’s proposal will actually be making the people who are experts in developing and handling the guidelines the people who are also in charge of compliance. The authority will also be the organisation that has power to impose civil penalties - up to $50,000 - on any insurer who breaches the guidelines. There are very good reasons for opposing the Australian Democrats amendment. I would elaborate further, but I would rather proceed with consideration of the rest of the provisions of the bill because I believe that most honourable members would be able to make up their minds on the basis of the available information relating to this provision.

The Hon. Dr B. P. V. PEZZUTTI [12.54 p.m.]: I am attracted to the amendment moved by the Hon. Dr A. Chesterfield-Evans because I am uncomfortable with what happens when complaints go to a committee comprising the chairman of the Motor Accidents Authority [MAA], a person from the insurance council and a person who is a friend of both, if I can paraphrase it in that way.

The Hon. J. J. Della Bosca: What happens if that person is a friend of no-one?

The Hon. Dr B. P. V. PEZZUTTI: Let me change "a friend of both" to "acceptable to both". Irrespective of which way the Minister puts it - the person could be an enemy of both, for example - the person would be acceptable to both. However, the important matter is that there should be a way in which a person who is unsatisfied with the answers - after all, it is very much an in-house, chappy process - can check whether there has been procedural fairness.

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I am aware that the Independent Commission Against Corruption [ICAC] could not inquire into the behaviour of the insurance companies, but the Australian Competition and Consumer Commission [ACCC] could. Is ICAC able to inquire into the behaviour of officers who are public sector employees of the MAA? If ICAC is able to inquire into the behaviour of the MAA, perhaps we will not need the Ombudsman. I am aware, however, that ICAC could not inquire into the behaviour of the insurance companies because they are private organisations. It was explained to me by the Hon. J. Hatzistergos that this is regulation of a private scheme, not a statutory scheme. I need to check in the first instance whether ICAC could inquire, and if it cannot, whether either ICAC or the ACCC can inquire into the regulation, proper functioning and reasonable conduct of these operations.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [12.55 p.m.]: The short answer to the Hon. Dr B. P. V. Pezzutti’s question is that, under the terms of the Independent Commission Against Corruption Act, ICAC can inquire into any allegations of corrupt conduct by officers of the MAA.

The Hon. J. F. RYAN [12.55 p.m.]: I do not want the Minister to have a new bureaucracy, but I point out that the MAA will no longer be just a regulator: it will be a player in the scheme, and it will be staffed by bureaucrats. It is normal to refer action taken by bureaucrats to the Ombudsman when complaints are made. I can probably judge the numbers in respect to voting on this amendment. However, it may not be long before people will want to complain about the MAA and the conduct of its officers - not the board or the chairman, but the people who carry out the job of complaints resolution.

Those people may be officers about whom people will have concerns. It would be normal for people to be able to take their complaints somewhere. At the moment, they would have to go to the MAA to complain about employees of the MAA. That does not appear to be the right thing to do. At some stage, we will have to address the issue of providing an opportunity for people to take their complaints to the Ombudsman.

Amendment negatived.

[The Chairman left the chair at 12.58 p.m. The Committee resumed at 2.30 p.m.]

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [2.30 p.m.], by leave: I move Government amendments Nos 69, 70 and 71 in globo:
    No. 69 Page 144, schedule 3 [6], lines 1-10. Omit all words on those lines.
    No. 70 Page 157, schedule 5, clause 10, line 19. Omit "or any instrument made under this Act". Insert instead "or any regulation under this Act".
    No. 71 Pages 157 and 158, schedule 5, clause 13, lines 30-33 on page 157 and lines 1 and 2 on page 158. Omit all words on those lines. Insert instead:
      13 MAA Premiums Determination Guidelines - unearned premium surplus
      (1) MAA Premiums Determination Guidelines under Part 2.3 of this Act are to ensure that any unearned premium surplus of insurers associated with policies in force at the commencement of this Act is taken into account for the purpose of subsidising the premiums payable for policies issued within 12 months after the commencement of this Act.
      (2) The MAA Premiums Determination Guidelines may make provision for or with respect to the following:
        (a) identifying unearned premium surplus,
        (b) determining how insurers are to apply the unearned premium surplus.
      (3) For the purpose of giving effect to the provisions of the MAA Premiums Determination Guidelines relating to the application of the unearned premium surplus among insurers, the Authority may, under Part 8.3 of this Act, include a special levy in the contributions of licensed insurers to the Motor Accidents Authority Fund to recoup the unearned premium surplus for payment of relevant amounts to other insurers according to the arrangements for the application of the unearned premium surplus. Any such levy may apply to an insurer that ceases to issue third-party policies.

I commend the amendments to the Committee in the expectation that they will be supported. I reserve my right to make further contributions.

The Hon. J. F. RYAN [2.32 p.m.]: These amendments are largely procedural and the Opposition supports them.

Amendments agreed to.

The Hon. J. F. RYAN [2.33 p.m.]: I move Liberal Party amendment No. 24:
    No. 24 Page 158, schedule 5, lines 3-24. Omit all words on those lines. Insert instead:

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      14 Maximum premiums that may be charged for first 30 months
      (1) This clause applies to the premium that may be charged for a third-party policy in the case of a passenger motor vehicle in a metropolitan area, being a third-party policy that is issued or taken to have been issued during the period of 30 months after the commencement of this clause.
      (2) The premium that may be charged by a licensed insurer for any such policy may be (and may only be) the premium approved by the Authority under this clause.
      (3) The Authority may approve of such a premium proposed to be charged by a licensed insurer if and only if:
        (a) the insurer has filed with the Authority the premium or set of premiums the insurer proposes to charge (whether filed before or after the commencement of this Act), and
        (b) the Authority is satisfied (after taking into account independent actuarial advice) that:
          (i) the filed premiums provide, in the case of a passenger vehicle in a metropolitan area, an average annual premium of not more than approximately $330, and
          (ii) the annual premium for any policy for such a vehicle in that area will not exceed that average annual premium by more than 20%.
      (4) The Minister is, on or before 1 October 2000 and on or before 1 October 2001, to declare, by order published in the Gazette, the amount which is to apply, as from the date specified in the order, for the purposes of this section.
      (5) The amount declared is to be the amount of $330 (or that amount as last adjusted under this section) adjusted by the percentage change in the amounts estimated by the Australian Statistician of the average weekly total earnings of full-time adults in New South Wales over the 4 quarters preceding the date of the declaration for which those estimates are, at that date, available.
      (6) An amount declared for the time being under this clause applies to the exclusion of the amount of $330 under subclause (3).
      (7) If the Australian Statistician fails or ceases to estimate the amounts referred to in subclause (5), the amount declared is to be the amount determined in accordance with the regulations.
      (8) In adjusting an amount to be declared for the purpose of this clause, the amount determined in accordance with subclause (5) is to be rounded to the nearest $1 (with the amount of 50 cents being rounded up).

This amendment seeks to amend schedule 5 by omitting lines 3 to 24 and inserting instead a series of clauses that relate to maximum premiums that may be charged during the first 30 months. The purpose of this amendment is to address Opposition concerns about claims by the Government that its package of amendments will cut green slip premiums by an average of $100. If that promise sounds a little like the one made some time ago by the Labor Party to cut hospital waiting lists by 50 per cent or to remove tolls -

The Hon. I. M. Macdonald: We did that, and a committee proved it.

The Hon. J. F. RYAN: If the Hon. I. M. Macdonald takes the Government’s idea of cutting waiting lists by 50 per cent as the benchmark to fulfil promises, clearly all the Government has done is to devalue the premium of Labor Party promises. The Government has a reputation for not delivering promises. The Opposition believes it is duty bound to hold the Government to its promises.

Reverend the Hon. F. J. Nile: You’re almost stopping them from doing that with every amendment.

The Hon. J. F. RYAN: Reverend the Hon. F. J. Nile carps in the background about us attempting to stop the Government from delivering promises. Over the last couple of days he has desperately tried to have a piece of me. He has finally put it on the record, so now we will deal with it. We are not attempting to stop the Government from achieving anything. We are simply persisting with policies the Opposition supports. It will come as no surprise to Reverend the Hon. F. J. Nile that our policies differ from those of the Government. It is legitimate that we put those different views and make the Government confront its critics. That is what this Chamber is all about.

If Reverend the Hon. F. J. Nile believes the upper House should be a rubber stamp, perhaps he should chat with the Treasurer, and suggest that perhaps we reform the upper House to make it more to the Government’s liking. It is our view that it is our job to make the Government confront its critics, to justify its case clause by clause and item by item, because that is what the people of New South Wales elected us to do.

Reverend the Hon. F. J. Nile: That is different from moving amendments.

The Hon. J. F. RYAN: Of course. If Reverend the Hon. F. J. Nile wants to carp about
Page 1717
amendments, I recall that on more than one occasion we debated the amendments moved by him, some of them long into the night and on one occasion nearly into the weekend. The Opposition is entitled to go about its business, which is no different from what he does; I have never criticised him for doing it. In fact, I remember voting on numerous occasions to allow him to continue when others moved the gag. We are doing our job and should not be carped at for doing so.

We are about keeping the Government to its promises. Its promise is that green slips are supposed to be cut by $100 not only for the immediate future but, I presume - and most people in New South Wales would take it to mean this - for a reasonable period of time, given that the scheme radically changes the level of protection people have enjoyed from green slips up until today. If the Government wants to radically reform the system, it is important that it guarantee its promises. The proposed amendment does not change the situation a great deal. However, the moment the bill is drafted this premium will survive for all of six months.

The Hon. J. J. Della Bosca: That’s what you’re doing with the GST. This is not a cold chicken; it’s an insurance premium!

The Hon. J. F. RYAN: If the Special Minister of State gives me a moment, we will come back to the GST. The final clause of the bill states in part:
    This clause ceases to apply in respect of a licensed insurer at the time (being no sooner than 6 months after the commencement of this Act)

All of this reform process will result in a benefit for only six months. The big-hearted Government says that the problem will be addressed in six months by introducing something for 12 months.

The Hon. I. M. Macdonald: What about the GST?

The Hon. J. F. RYAN: The GST will still be a problem with the Government’s amendment, as I will describe later. Insurers normally file premiums annually. So extending the level of protection from six to 12 months is no extension of protection at all. It means that we have copped all this reform, we have slashed the punters’ rights, to use expressions which have been used in the debate earlier, to achieve a $100 deduction in premiums for 12 months into the future until the next premium filing. If we are to cop this reform - and I am not quibbling with the decision of the Chamber - the Government should be kept to its promise. If crossbench members are prepared to co-operate with the Government to achieve the reform I urge them to stand up for the people of New South Wales and make sure that the reform they voted for is the reform the people get.

The Hon. J. J. Della Bosca: A lecture to the crossbench.

The Hon. J. F. RYAN: I am not lecturing the crossbench; I am appealing to it. The Minister and others have interjected about the GST. The GST is a Commonwealth tax. We do not have to legislate to make possible -

The Hon. J. J. Della Bosca: But it is going to affect everybody. What about the punters?

The Hon. J. F. RYAN: Of course it is going to affect the punters. The punters will be able to get a tax cut. If they work overtime they will not pay tax at 49¢ in the dollar plus the Medicare levy, but at 30¢ in the dollar. I have no problem about standing up with members of the Senate for tax reform. It is a pity that members opposite want to continue with a debate that is over.

The Hon P. T. Primrose: Point of order: I refer to -

CHAIRMAN: Order! I do not need to hear the member. Standing Order 174 provides:
    When a clause or amendment is under discussion, a Member speaking shall confine himself to the matter of the clause or amendment.

Some level of general comment is acceptable, but, particularly as the Committee has been considering this bill for four days, the Hon. J. F. Ryan should not repeat himself or discuss Federal Government policy.

The Hon. J. F. RYAN: Mr Chairman -

The Hon. I. M. Macdonald: Are you canvassing the ruling?

The Hon. J. F. RYAN: Mr Chairman, I would not want to canvass your ruling but regrettably the GST is tangential. As the Government has said, it has some impact on premiums. I will work within your ruling. The GST will, of course, affect many things. Mr Chairman, I hope that you will allow me to respond at least in so far as it is relevant. All I can say in regard to complaints opposite about the GST is that they seem to come from the lower half of the table.

Page 1718

The man who normally sits in the chair further up the table, the Treasurer, is quite happy with the outcome of the GST in so far as it will affect State income. The GST is a Commonwealth Government tax. We do not have to pass a law to make it legal to pay a Commonwealth tax that is imposed; it is simply part of the law of the land. Anything this bill does will not make it impossible for insurers to respond to the GST.

Reverend the Hon. F. J. Nile: It will change the premiums.

The Hon. J. F. RYAN: They will not need to change the premiums. They will charge what they need to charge and then a GST will be added on top. If anything, because the premium filing now is based on the fact that insurance companies pay wholesale sales tax and various forms of excise, their premium is higher than it will be after the GST. The premium will fall - I admit that the price will change - but a GST will be added on top. So the premium, which is all the bill and the amendment refer to, will stay the same or fall. The GST issue is a furphy. The Commonwealth Government’s arrangements for the GST will come into effect, and they will not affect us legislating. We do not need to legislate -

The Hon. J. J. Della Bosca: What about inflation?

The Hon. J. F. RYAN: We will deal with inflation shortly. The Opposition amendment addresses the issue of inflation; the Government amendment does not even refer to the cost of living. I am glad that the Minister referred to inflation, which is a factor that the Government will try to use to squib out of its promise later on. The Opposition amendment would amend the Government’s original proposition to make the premium cut apply not for six months but for 30 months. In other words, the people of New South Wales will enjoy the benefits of this reform, if the Opposition’s amendment is carried, not for just a very short period. It will be a long-term change. In my view the people of New South Wales are entitled, in exchange for accepting radical reform, to have long-term savings.

If the Government is serious about this reform, if it believes what it is doing will cut premiums, if it is prepared to guarantee to this Chamber that what it is doing will achieve the effect claimed, it will have no problem in agreeing to the Opposition amendment. The Opposition wants the Government to pick up the amendment to show the people of New South Wales how fair dinkum it is about cutting premiums. Secondly, the Opposition amendment raises the issue of what might happen with regard to cost of living movements. It would work for three years rather than six months. The Government’s amendment is so short term that it does not refer to the cost of living. It would be impossible to measure cost of living movements in such a short period.

The Opposition amendment would provide for insurers being able to file for higher premiums if, and only if, there is some cost of living change. What could be fairer than that? In other words, we are proposing to index premiums for the ordinary punters of New South Wales. Given that they have to take the pain of all the cuts in their benefits, they should receive the benefit of the premium cut in the long term. We do not trust the Government. We are used to it reneging on promises. We are asking Government members to pass a vote of confidence in their own package. If Government members vote against the Opposition amendment it will show that they do not have confidence in the Government’s package. All that will be achieved from the package, all this reform, three days of discussion, loads of other consultation, endless notes and so on will be a one-off cut of $100.

The Hon. I. M. Macdonald: That is good: You have admitted that we have done a lot of consultation.

The Hon. J. F. RYAN: I accept that there has been a lot of consultation. The Standing Committee on Law and Justice has been working on this question for three or four years.

The Hon. I. M. Macdonald: That is not what you said at the beginning of the debate.

The Hon. J. F. RYAN: I have never denied that there has been consultation.

The Hon. I. M. Macdonald: Oh, you have changed it now.

The Hon. J. F. RYAN: Not at all. I said that there has been a lack of consultation in the specific context of the bill but I would not suggest that there has been a lack of consultation on the scheme. The Government need not divert the issue. Does it believe that what it is doing will work? If it believes that it will work it should vote for the Opposition amendment. If the Government votes against the amendment the Opposition will tell the people of New South Wales - we will not need to say it any louder; the Government will say it with its vote - that it does not believe its scheme will work.

Page 1719

That is step one of welshing on its promise. The Government welshed on its promise on waiting lists. It fiddled the lists and mucked around and made sure the waiting lists were counted in December when nobody wanted to go to hospital, transferred people on the list if they were not available to go to hospital, if they were not available to go to surgery on a particular day, and artificially reduced the waiting lists. That was its benchmark. We expect that there are all sorts of fudges and tricks in this scheme. The Government amendment says that the authority "may"; it does not say that it must.

The Government’s amendment says "may". I am not a lawyer but I understand there is a big difference between "the authority may" and "the authority must". If an insurer provides a good reason for filing a premium without the $100 reduction the authority may approve it. That means that the Government will have achieved nothing. The Opposition intends to put the wood on the Government at the next election if the people of New South Wales are not still enjoying a $100 reduction in their premiums, minus the amount of the cost of living index, at that time.

The Government’s reforms will have failed and the Opposition will tell the people of New South Wales that the Government has failed. It is important to do that. The Opposition is asking the Committee to agree to its amendment. If members opposite believe in the measures they voted for they will have no trouble accepting the amendment.

The Hon. Dr B. P. V. PEZZUTTI [2.50 p.m.]: My concern - and it has been covered partly by the Hon. J. F. Ryan; I will not repeat what he said - is that we are trying to achieve an element of openness and fairness. The Committee has already debated clause 27. Importantly, in clause 27 the Government proposes that the premium must fully fund a liability. Although insurers are compensated for taking risk, this is a no-risk arrangement for them because clause 27 provides that a premium will fully fund a liability if the premium is sufficient to pay all acquisition and policy administration expenses, including 4 per cent profit for anyone who sells the policies; to provide a sum of money for anticipated investment income; and to provide a profit margin in excess of all claims, costs and expenses that represents an adequate return on capital invested and compensation for the risk taken. There are no risks in this proposal; insurance companies will be able to apply to the Motor Accidents Authority to jack up their prices. I have a number of motor vehicles.

Reverend the Hon. F. J. Nile: Rolls Royces?

The Hon. Dr B. P. V. PEZZUTTI: Reverend the Hon. F. J. Nile will be sad to hear that I do not have a Rolls Royce, because of the dangers on country roads. I certainly would not want to be injured under this arrangement. I should like a Rolls Royce because it might protect me from the need to claim under this arrangement. If I were involved in a motor vehicle accident I would be all right but the person I hit might not be all right. Interestingly, the comprehensive insurance rate for a car garaged in the country is substantially lower than the comprehensive insurance rate for a car garaged in the city, but the opposite is true for green slips.

I acknowledge that there is car theft and vandalism in the country and in the city. One would think that if there was a car accident causing damage to the vehicle there would also be damage to the occupants or other people, regardless of whether the accident occurred in the country or in the city. Interestingly, in this bill the Government is committed to ensuring that the average premium in metropolitan areas is not more than approximately $330.

The Hon. R. S. L. Jones: What does Country Labor say about that?

The Hon. Dr B. P. V. PEZZUTTI: Country Labor has said absolutely nothing. My colleagues in the National Party and Liberal members representing country areas are concerned that the Government has made a legislative commitment to metropolitan Sydney, not to country New South Wales. As a member representing a country area the Hon. R. S. L. Jones will be interested in that. It is important that the clause be amended; I think my colleague the Hon. D. F. Moppett has an appropriate amendment to cover this matter. I do not know why green slips are so expensive in the country and comprehensive insurance is relatively cheap.

The Hon. I. M. Macdonald: They are not; they are substantially below the city rate.

The Hon. Dr B. P. V. PEZZUTTI: They are not. The country premium I paid last time -

The Hon. J. J. Della Bosca: The average country premium is 80 per cent of the average metropolitan premium.

The Hon. Dr B. P. V. PEZZUTTI: I may be dealing with two different insurance companies in relation to my two cars. I tend to stick with an
Page 1720
insurance company that does the right thing. I noticed that the premiums for the two cars were different.

The Hon. J. J. Della Bosca: They are ripping you off. I’d change my insurance company.

The Hon. Dr B. P. V. PEZZUTTI: The Minister said I have been ripped off. That is what I have been trying to tell him the whole time. The Government is concentrating on price; I am concentrating on overall value. I might be happier to pay extra to an insurance company such as the NRMA, which I trust and know and have dealt with for years, rather than pay a cheaper premium to a fly-by-night company which the Minister has permitted to enter the insurance market. That fly-by-night company may go belly up, although it offered a cheaper premium. I am talking about value for money. I might well pay a bit more to one insurance company as opposed to another company.

The Minister said that I have been ripped off. That is exactly what the Government is doing to people who are potential victims of a motor vehicle accident in New South Wales. They will be short-changed and ripped off. Their arms will be ripped off with no money coming back; their legs will be ripped off with no money coming back.

The Hon. J. J. Della Bosca: That’s not true. You are scaremongering.

The Hon. Dr B. P. V. PEZZUTTI: Is that 10 per cent, ripping off one arm?

The Hon. J. J. Della Bosca: You are the doctor, you tell me.

The Hon. Dr B. P. V. PEZZUTTI: I have not seen the schedule of maims. Have honourable members had access to the guidelines for assessment? As far as I am aware honourable members have not seen the American Medical Association guidelines for assessment. I have not seen them.

The Hon. I. M. Macdonald: Point of order: I refer to Standing Order 81 relating to relevance. The Hon. Dr B. P. V. Pezzutti is straying far from the amendment. He has tried at least 31 times on every clause of the bill to put his arguments. The Committee is dealing with the level of premiums; the honourable member is talking about a table of maims for workers compensation.

The Hon. Dr B. P. V. PEZZUTTI: To the point of order: Mr Chairman, if the Hon. I. M. Macdonald can refer to a specific standing order and you can understand what the honourable member babbled on about I will be more than happy to abide by your ruling.

CHAIRMAN: Order! I repeat my earlier reminder about Standing Order 174. The Committee is considering the maximum premiums that may be charged in the first 30 months of the operation of the Act. Medical guidelines and schedules of limbs are not relevant to that matter. The Hon. Dr B. P. V. Pezzutti should confine himself to the clause under consideration.

The Hon. Dr B. P. V. PEZZUTTI: I was distracted by the Special Minister of State, but I will return to the clause under consideration. I am concerned that these premiums will be artificial. As my colleague the Hon. J. F. Ryan said, the Government has recognised that premiums will be artificial for six months. That means that the Government will be able to claim that it has dropped the price of green slips by $100 on average for metropolitan New South Wales. I am convinced that in the bill the Government should make a commitment to all the people of New South Wales, and the Opposition has an amendment to that effect. My colleague the Hon. D. F. Moppett has a further amendment and I shall speak on that matter later.

With regard to the amendment moved by the Hon. J. F. Ryan, I am concerned that we should adopt, and the Government should be happy to take on board, a mechanism by which the premium can escalate on the basis of a reasonable assessment - done by the Hon. J. F. Ryan and moved by him - over 30 months as to how premiums may be charged. We believe that the Government should vet this legislation for 30 months, and not just a miserable six months. If the Minister were convinced of that and had told the people that, he would be more than happy to accept an assessment period of 30 months. It is my belief - one that I understand is shared by other members of the House - that this will be a huge windfall for the insurers and a huge detriment to claimants.

Few costings have been provided. I can assure honourable members that it is perfectly clear that the Government started with a premium that it wanted to charge and the insurance companies came along and said, "This is what you can include if you want to have a premium of that amount." The Minister keeps talking about the stakeholders, the insurance companies and the motorists, and last of all he mentions the victims. This morning the Minister talked about the stakeholders, and he also referred to the insurance companies, the motorists -

Page 1721

The Hon. J. J. Della Bosca: In my terms, they are not stakeholders.

The Hon. Dr B. P. V. PEZZUTTI: I can now quote the Minister as saying that the insurance companies are not stakeholders in this matter. This entire bill has been written on the advice of the insurance companies -

[Interruption]

I had better ignore that interjection, otherwise I will be distracted from the bill. I am concerned that, in establishing the average annual premium only for metropolitan areas - and I presume "metropolitan area" means Newcastle, Sydney and Wollongong; the usual old NSW - at not more than $330, the bill does not spell out how the Government intends to perform risk assessment and risk adjustment. In his public statements the Minister commented about younger drivers who are more prone to accidents in various demographics, and said that perhaps older people may have to pay more than the average person. But no-one on behalf of the Government says that people will pay more than they are paying at the moment.

Honourable members have suggested to the Minister that the fee may be as high as $570. Does that mean that no-one will be paying more than $570 for a green slip? What figure has the Minister chosen as the maximum that people will pay? At present the figure is only an average, alleged to be $430. We have not been assured by the Minister in his public comments that people will not pay more than they are paying now. We have seen the huge variation of how much is being paid now. I ask the Minister to advise what the breadth of this will be.

If we are to have an average premium across the board for metropolitan New South Wales, what is the range? In other words, will I, as a very responsible person who does not have any accidents and who is in the right demographic band, pay $220, or will I pay $150? What is the maximum premium that people will pay? Again I ask what are the likely impacts of this legislation if it is applied to the whole of New South Wales. I hope that the Minister is able to answer that question before we debate the very good amendments to be moved by my colleague the Hon. D. F. Moppett .

I express my support for the amendment moved by the Hon. J. F. Ryan. I am concerned about what will happen in regional and rural New South Wales, and about how high and how low the premium could be. But my principal concern relates to the fact that the premium will only apply for six months. The Government will then say that it brought the premium down, that the costs blew out, or that something blew out, or that the dog ate its homework, and that the premium is now $550. We will then never find out how the Government did it and why it did it.

The Hon. Dr A. CHESTERFIELD-EVANS [3.04 p.m.]: I do not support this amendment. I believe that the Government has done a lot of bad for the injured people of New South Wales, and in return it has made extremely modest promises about the premium for six months. It will be seen that, as the Government has made those modest promises and it may be able to hold to them, it should not then have to hold to the Liberal Party’s promises.

The Government has not given us any costings at all. It is a disgrace that the Government has asked us to make these decisions without costings. I believe it is very big brotherish for the Government to say, "We have got the figures, and you do not. So you can engage in some rhetoric, and we will say that all of your amendments are expensive, without the slightest effort to cost either ours or yours." That is what the Government has said. It has not answered my questions about Shelley Miller and about how the legislation was crafted -

The Hon. I. M. Macdonald: Shelley is a great person.

The Hon. Dr A. CHESTERFIELD-EVANS: Does that bear any relation to whether you answer the questions? Is it looking after a mate, or are we getting the benefit of wisely invested taxpayers’ dollars achieving prescient conclusions? The Government should not be hoist on the Opposition’s petard on this issue; it should be hoist on its own. That is why I do not support the amendment.

Reverend the Hon. F. J. NILE [3.06 p.m.]: I wish to clarify the intention of the Opposition’s amendment. Opposition amendment No. 24 inserts new clause 14 (3) (b) (ii) in schedule 5 as follows:
    the annual premium for any policy for such a vehicle in that area will not exceed that average annual premium by more than 20%.

On my calculation, that means that the premium could be $396. The paragraph we are amending simply provides that the average annual premium will not be more than $330. Of course, the premium would be higher in certain circumstances. The Opposition’s amendment appears to lock in the premium for every vehicle. I note that the Government’s amendment provides that the majority of policies relating to passenger motor vehicles in
Page 1722
metropolitan areas will attract a premium of not more than approximately $330.

The Hon. Dr B. P. V. Pezzutti: They don’t say "majority". Where do they say that?

Reverend the Hon. F. J. NILE: That is contained in the Government’s amendment. I simply say that the Opposition is saying that every vehicle -

The Hon. Dr B. P. V. Pezzutti: But you are saying "majority". That is not true.

Reverend the Hon. F. J. NILE: The Government’s amendment says "majority".

The Hon. Dr B. P. V. Pezzutti: Where?

Reverend the Hon. F. J. NILE: It is Government amendment No. 72. The impact of the Opposition’s amendment is to say that every vehicle will attract a premium of $330, which is not possible. We have already seen the increased premium charges that result when people do not take out comprehensive insurance, and so on. That is one reason why we have problems with the Opposition’s amendment.

The Hon. M. J. GALLACHER (Leader of the Opposition) [3.08 p.m.]: I have listened to this debate over the past few days, and it would be remiss of me as Leader of the Opposition not to contribute to this debate in a small but, I would suggest, significant way. This Opposition amendment endeavours to correct an attempt by the Government to create one of the biggest fraudulent acts ever committed by an elected government on its own people. The hyperbole surrounding this bill was all about the Government reducing the price of green slips by $100. The Minister was right when, in relation to an earlier contribution - or rather, I should say, an interjection by me - he stated that the Government’s amendments were not as a result of mistakes. Let us consider that for a moment.

The Minister is saying that it was no mistake that the bill in its original form provided for the reduction to be in place for only six months. But, within a period of a week, the Government realised that it had made a mistake. As foreshadowed in relation to a further amendment it intends to put forward, it now wants to increase the period to 12 months.

This is not a mistake. The Government realised that it was seen to be committing a fraudulent act in relation to the six months and thought that increasing the period to 12 months would somehow lessen the load and make it look more fair dinkum. That is a joke; it has all the hallmarks of comments made by the Premier and the former useless Minister for Health about resigning if hospital waiting lists were not halved. It is just a facade, and the six months proposition falls into the same category. As yet the Government has foreshadowed a period of 12 months, but the bill as it stands specifies six months, a period that the Government seeks to portray as locked in for ever and a day. The fine print on the last page of the bill spells out the period of only six months.

For a couple of months following the passage of this bill the Premier and the Special Minister of State will traverse the commercial media outlets, hands held high in victory like Mr Fix-it who delivered the goods once again. However, given the fine print, do not have an accident in about January or February next year or you will be up the creek without a paddle. That is the reality. This is a hollow victory and the Opposition intends to expose that.

The Government is trying to raise the stakes to 12 months but the Minister has said that is a mistake. It is not a mistake; it is the result of consultation. It is disgraceful that the Government has tried to portray itself as being committed to looking after all the people of New South Wales, because this bill deals only with people living in the metropolitan area. The Special Minister of State hails from the Central Coast but his first piece of fraudulent legislation gives absolutely nothing for the people there. Most commuters on the Central Coast have very little confidence that their rail network will get them to work on time, and they are forced to drive every day on the F3.

The Hon. I. M. Macdonald: Point of order: Standing Order 81 states that "No Member shall digress from the subject matter of any Question under discussion". The Leader of the Opposition’s comments about travelling time from the Central Coast are irrelevant to the debate on this amendment.

The Hon. M. J. GALLACHER: To the point of order: If the Hon. I. M. Macdonald had taken time to actually disengage his mouth for a minute, he would have heard me say that they are forced to drive. That involves a motor vehicle.

The CHAIRMAN: Order! There is no point of order. The honourable member is dangerously close to infringing the relevance rule but at this stage I will allow him to continue.

Page 1723

The Hon. M. J. GALLACHER: I have always been in the habit of skating close to the edge. Central Coast commuters drive down the F3 and run the daily risk of the F3 grand prix, but the Minister has done nothing for them. The Opposition amendment is in the best interests of a wider group of people and the process being examined for a longer period. I have tried to gain a better understanding of where the Minister is going with the six months provision. One minute he criticises the Victorian Government and in the same breath he says that the American Medical Association guidelines are being applied in Victoria and are the way to go. The Minister is confused about this legislation.

Last week I intentionally interjected on the Minister, and his interesting response was that this would only be used on an interim basis. If the measure is that good and if the Minister is prepared to assert that it should be the model for New South Wales because it is so fair, it should be put in place to stand in perpetuity instead of only for six months. The Opposition proposes 30 months.

The Hon. I. M. Macdonald: Point of order: I have listened with great interest to what has been the equivalent of a second reading speech by the Leader of the Opposition. The Committee is dealing with a specific Opposition amendment about tying the $330 to average weekly earnings, yet the honourable member is canvassing every other clause of the bill. Mr Chairman, I ask you to confine him to that, rather than filibustering.

The Hon. M. J. GALLACHER: To the point of order: The first part of the amendment states succinctly that the period should be 30 months. I am examining the impact of the 30 months to gain an understanding of what the Minister is hoping to achieve by proposing only six months. Then I will have a greater understanding of the benefit of the Opposition’s proposal for 30 months. I have listened to what the Minister has said and I intend to clarify the position.

The CHAIRMAN: Order! There is no point of order. The member was referring to 30 months, but it would expedite matters if honourable members confined themselves to the subject matter under discussion.

The Hon. M. J. GALLACHER: It is important that the Government understand that the Opposition is trying to get a handle on the origin of the six months and why the period is not longer, such as the 30 months suggested by the Opposition. The Government is hell-bent on preventing the Opposition from examining the value of 30 months and gaining a greater understanding, because the Government is scared that the Opposition is correct. The Hon. I. M. Macdonald would do far better by listening to what the Opposition has put forward and considering it not in isolation but in its totality.

In his second reading speech the Minister referred to my maiden speech as Leader of the Opposition and used that as a basis to determine where he thought I was going. I have used the very same concept to understand where he is going. As the bill stands, the six months provision is a hotchpotch of ideas from all over the place, not only from this jurisdiction but from speaking to Shelley Miller, who I believe is a consultant from Canada, and from Victoria and the American Medical Association. The Opposition believes that those ideas should not be considered in isolation but that the Minister should have briefed the Opposition fully. This hotchpotch caused me to try to determine where the Minister wants to go with this legislation.

[Interruption]

I ask the Hon. I. M. Macdonald to sit tight for a few minutes and to listen to what I have to say. I have only a few more pages to deal with. I ask him to give me an opportunity -

The Hon. J. J Della Bosca: Consistent with the standing orders though?

The Hon. M. J. GALLACHER: Most certainly consistent. The Minister collected his thoughts from a number of jurisdictions and individuals, and he has an interesting history. As I said earlier, in order for me to obtain an understanding of where he is going and the way in which he is applying this legislation, I looked at his inaugural speech and the way in which he applied an historical context to the drug crisis. I will not labour the point about the drug crisis but I want honourable members to understand where we are coming from. In his inaugural speech the Minister referred to the Black Death and said:
    The great scientists concluded that on that day a triple conjunction of Saturn, Jupiter and Mars had occurred in the fortieth degree of Aquarius.

He went on to say:
    The physicians admitted also that there may be causes "hidden from even the most highly trained intellects . . .

He then said:
    . . . the pamphlet produced from the meeting of Parisian physicians was translated from Latin into the various
Page 1724
vernacular languages and widely distributed. Eventually it was adopted by the great Arabic scholars of Cordoba and Grenada . . .

I think honourable members would agree that they are deep and compelling words. This Minister is a thinker - someone who has put aside -

The Hon. Helen Sham-Ho: Point of order: My point of order relates to Standing Order 85. The Leader of the Opposition has continued to make irrelevant statements in debate on this amendment. I ask you to call him to order as he has spent more than two minutes talking about the Black Death.

The Hon. M. J. GALLACHER: To the point of order: As I said earlier, I am trying to obtain an understanding of where the Minister is going. I will take just another few minutes to try to develop an understanding of where the Minister is going in relation to the application of the six-month rule.

[Interruption]

The Hon. Helen Sham-Ho, who has had her say, should sit down. I am simply trying to obtain an understanding of where the Minister is going by referring to what he said in his inaugural speech.

The Hon. Helen Sham-Ho: Further to the point of order: I will not sit down. I say again that what the Leader of the Opposition is saying has nothing to do with the amendment. He is talking about the Black Death.

The CHAIRMAN: Order! I uphold the point of order. The Leader of the Opposition is straying a long way from the clause. Reference to the Minister’s inaugural speech is interesting, but I ask him to return to, and to conclude, his comments on the clause.

The Hon. M. J. GALLACHER: I will give honourable members a few examples so they have an understanding of where I am going. One of the things I alluded to earlier was the Opposition’s concern that this legislation is being portrayed as something that it is not - that somehow it is in the best interests of the community. Referring to the Minister’s speech, I said earlier that the Minister is not the only person who has ideas in relation to the application of this third party legislation. Take, for example, an author by the name of Barbara Tuchman, who once wrote:
    The doctors ascribed it to a triple conjunction of Saturn, Jupiter and Mars in the 40th degree of Aquarius.
    They acknowledged however, effects whose cause is hidden from even the most highly trained intellects.

She then said:
    Borrowed, copied by scribes, carried abroad, translated from Latin into various vernaculars, it was everywhere accepted, even by the Arab physicians of Cordoba and Grenada.

Is it not fascinating that both the Minister in his inaugural speech, and the author Barbara Tuchman in her book entitled A Distant Mirror, can be so in tune? It is a synergy; it is as though their thought processes were as one. The only difference is that the book was written over 20 years ago. The Government’s proposition, which is a fraud, is somehow being portrayed as being in the best interests of the people of New South Wales. It is as far removed from the best interests of the people of New South Wales as one could imagine.

The application of a 12-month security of premium, added to the other unfair components of this bill, will force individuals to look for alternatives - to look at ways in which they can get out of paying this tax. Is it any wonder that in 1995 an article in the Sydney Morning Herald referred to the Minister as "Cupid gone to seed"? Is that not evident in this legislation? This legislation has most certainly passed its use-by date. It has done so even before it has been passed in this Chamber. Let me put to the Minister a proposition that he should consider - one that has not been raised in the context of this legislation but which is most certainly relevant.

Once this legislation comes into effect, what is to stop police officers, for example, attending the scene of a serious motor vehicle accident and taking action under the Crimes Act rather than the motor traffic Act? They can charge a driver with a serious criminal offence, thereby allowing a victim access to up to $50,000 compensation under the Victims Compensation Act. There is no provision in this legislation that will prevent that from happening. The Opposition is opposed to the Government restricting this clause to 12 months, as amended. We seek to extend that to 30 months. Anything less is a fraud on the people of New South Wales. The Opposition calls this clause, as it currently stands, the Helen Demidenko clause: something that is made up and is simply nothing other than a fraud.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [3.27 p.m.]: Mr Chairman -

The Hon. Dr B. P. V. Pezzutti: You have got to explain that.

The Hon. J. J. DELLA BOSCA: I do not have to explain anything. I will get back to the
Page 1725
substantial point concerning the amendment, but I hope the Chair will, for a few minutes, give me the same sort of tolerance that, in their wisdom, they gave to the Leader of the Opposition.

[Interruption]

I wish to make some lengthy remarks. I have always taken the view that I should carry out to the best of my ability any job I am given. The Premier gave me the job of reforming green slips and I have done that job to the best of my ability. I will refer later to the substantive public interest points after I respond to some of the points made by the Leader of the Opposition. Earlier, the Hon. Jennifer Gardiner asked me a question about briefings that I may or may not have had about my ethical stance in Parliament. I believe that ethics are based on the integrity of where one starts and not on the external actions that one takes. That is really what is most important. I thought long and hard about that matter.

It would come as a surprise to people who see me as an honest broker that I have a reputation as a political strategist. Even the Hon. Jennifer Gardiner was not able to conceal the fact that what I said was an attempt at the old soccer ball. It did not take me long to work out that Opposition members must think they know something - and it would come as a bit of a surprise to them that they think they know something - that I have done that somehow offends against the ethics of the House. I racked my brain to establish what that could possibly be.

The Hon. Dr B. P. V. Pezzutti: Do you have a clear conscience?

The Hon. J. J. DELLA BOSCA: Absolutely, I have a clear conscience. The Hon. Dr B. P. V. Pezzutti -

The Hon. Dr B. P. V. Pezzutti: Why would you worry?

The Hon. J. J. DELLA BOSCA: I did not worry. Because of my inexperience as a member of Parliament I wanted to ensure that I could adequately answer any future questions that might lead on from the question asked by the Hon. Jennifer Gardiner. I was concerned about that matter, so I did a bit of research around the edges in the media and in the press gallery. I found that members of the Liberal Party went to the press gallery -

The Hon. Dr B. P. V. Pezzutti: Not me.

The Hon. J. J. DELLA BOSCA: The Hon. Dr B. P. V. Pezzutti is a man of integrity. He was not there, but someone - and it is now pretty obvious who it was - told members of the press gallery and members of the media that I had plagiarised my inaugural speech. I was a bit surprised about that allegation. I read the occasional book, and I am sure the Leader of the Opposition does not have to admit to that error.

A number of books have inspired me over the years. Recently I read a book called The Calendar by David Ewing Duncan. That book traces the development of our modern day calendar and illustrates the way in which people’s experiences are fashioned by their conception of time. The Opposition has shown that it is very good at wasting time. It has ensured that the Government cannot hold a press conference this afternoon to inform the public that the Government, the crossbenchers and all those who are involved in the process have come to the table to deliver a better green slip system at a cheaper price. Not only is the system cheaper, but it is in the public interest to deliver a sustainable price that is lower than the high-price system that the Opposition tried to impose. Members of the Liberal Party and the National Party are the only members who have not contributed to that process.

I have been advised by members of the press gallery that a member of the Opposition accused me of plagiarising a book written by Barbara Tuchman entitled A Distant Mirror: the calamitous 14th century. It is now obvious who that member was; the Leader of the Opposition is nodding and shaking his head. Actually, it would have been one of his researchers because I do not think the Leader of the Opposition would be able to use the Dewey decimal system in the library to research books. I was going to refer to the Leader of the Opposition as Oliver Cromwell, but that is not right yet; he is still waiting in the wings for that.

I am familiar with the works of Barbara Tuchman, who is a great author, Pulitzer Prize winner and self-taught historiographer; she is not a formal academic. It is unfortunate that the Hon. Patricia Forsythe is not in the Chamber as she is the only Opposition member who could explain what a historiographer is. It is likely that many honourable members are familiar with Barbara Tuchman’s most famous work, The Guns of August, which I have read. It is brilliant narrated history about the First World War.

Regrettably I have never read A Distant Mirror: the calamitous 14th century. However, I
Page 1726
have read a book that the Leader of the Opposition in this House and Mrs Kerry Chikarovski and a few others should read: The March of Folly by Barbara Tuchman. Members of the Liberal Party and the National Party should seriously study that book, which relates to the pursuit of groups or associations of policies contrary to their own interests.

The Hon. Dr B. P. V. Pezzutti: You are plagiarising again.

The Hon. J. J. DELLA BOSCA: I am quite happy to give Barbara Tuchman the credit for this. The Hon. Dr B. P. V. Pezzutti should read the criteria that Barbara Tuchman specified for The March of Folly. The group must pursue something that is counterproductive in its own time, not merely in hindsight. The Opposition pursues a policy that is counterproductive not only in hindsight but is counterproductive now. The Independents and the crossbenchers can see just how counterproductive the Opposition has been with this massive waste of time.

The Liberal Party and the National Party should have individual policies, not merely a group policy. A reasonable course of alternative action should have been available. The Liberal Party and the National Party are again pursuing the course of the march of folly. When allegations are made one has the right to reply, especially when those allegations were made outside the standing orders and purely with the tolerance of our progressive Chairman of Committees.

The Hon. Dr B. P. V. Pezzutti: You are, too.

The Hon. J. J. DELLA BOSCA: I asked members of the House if they objected. This provision is a transitional provision. The march of folly on motor accidents began with the Greiner Coalition Government. The Greiner Government made a decision to introduce private insurers into a public interest scheme. This Government has persisted with that decision because it is consistent with the expectations and culture of the people of New South Wales. There is an overwhelming indication that it is the type of scheme that the people want. They want a balance between access to common law and the advantages that real price competition would give.

But the Coalition, which is supposed to be in charge of the free enterprise approach, was not able to deliver a system that allowed for real price competition between private providers. It could not do it, it messed it up, and it continues to mess it up right along the line. This Government has done its best to fix the system. The Government has talked to all the service providers, it has dealt with the government agency, and it has worked its way through its own culture change process in order to deliver a better set of approaches.

The Government has had discussions with the crossbenchers about the concerns of various people of New South Wales. The Government has worked with all those who would work with it on this matter to produce what it believes is the best balance between price competition, which will deliver a better market place and cheaper green slips overall, and a system that develops timely treatment for victims of motor accidents.

The Hon. Dr B. P. V. Pezzutti: Heavily regulated!

The Hon. J. J. DELLA BOSCA: It is so heavily regulated that the Coalition wants to change the transitional arrangement into some kind of Damoclean threat. The Coalition is not stupid; it knows that if this House adopted its amendment, every insurer would walk out of the scheme tomorrow. The only reason it accepts the Government’s provision is that it is a transitional arrangement designed to settle down the decreases in the scheme that the Government knows will occur as a result of proper price competition.

The Government has changed the reference to ensuring that the majority of metropolitan class-one vehicles are at or below the $330 rate, as that can be more closely vetted by the Australian Medical Association. In relation to a number of points raised by the Hon. Dr B. P. V. Pezzutti, the average cost of premiums outside the Sydney metropolitan area is 80 per cent below that which applies in the city. I do not know who has provided the Hon. Dr B. P. V. Pezzutti with green slips.

The Hon. J. H. Jobling: Eighty per cent below?

The Hon. J. J. DELLA BOSCA: I stand corrected; the average cost of premiums outside the Sydney metropolitan area is 80 per cent of that which applies in the metropolitan area. Honourable members know that the metropolitan average is an accepted benchmark in the industry. I commend the Government’s amendment to the House.

The Hon. Dr B. P. V. Pezzutti: You have not moved the amendment yet.

The Hon. J. J. DELLA BOSCA: I will do so and I will wait to speak on Government amendment No. 72.

Page 1727

The Hon. D. F. MOPPETT [3.37 p.m.]: I know it shows some temerity to enter into such a restrained and focused debate as we have had on this amendment. But there is one matter that my colleagues, with all the fastidiousness with which they have examined these proposals, have possibly missed. That is, that there is a lack of congruence in the proposal advocated by Reverend the Hon. F. J. Nile, who initially sought a review of this legislation in three years, but has settled for a review in two years. The Minister has explained the restraint that is being applied as a short-term brake that would suppress insurance companies from charging excessive amounts in this area of insurance. In my view Reverend the Hon. F. J. Nile is reluctant to have that brake extended to the period when a review would take place.

In other words, insurance companies might be restrained for six months, and it is foreshadowed that it might be 12 months, but they will be able to get out from under before the review takes place. If people are sincere about wanting the review to be meaningful and to have some teeth, then they should be willing to see this period of restraint extended for a very modest period of time.

The Minister would have us believe that at the first sight of any challenge these mendicant insurance companies will disappear from the industry. They certainly do not sound like the companies that I have purchased compulsory third party insurance from. This amendment will not be considered by the Government; it appears to have a closed mind on the subject. However, I urge the crossbenchers to favourably consider this amendment to bring into line the proposal for a review as well as the period of restraint.

The Hon. J. F. RYAN [3.39 p.m.]: Since we are being literary this afternoon, I will borrow the words of Polonius in Hamlet: "Brevity is the soul of wit." I will be brief. The Government did not give any guarantee at all that its $100 cut in premiums would last for longer than six or 12 months. That is all we need to know. This is a vote of confidence in the scheme. Just watch the Government members; they will walk away as soon as the bells ring.

The Hon. J. S. TINGLE [3.40 p.m.]: I will be even more brief. As someone who has enjoyed the occasional clash with the Leader of the Opposition in this House, I listened to his contribution with a great deal of interest. I cannot let it pass without comment in that it occasionally touched on the amendment. My comment is: One for substance, five for style and 10 for acting.

Question - That the amendment be agreed to - put.

The Committee divided.
Ayes, 11

Mr Bull Mr Lynn
Mrs Forsythe Dr Pezzutti
Mr Gallacher Mr Ryan
Miss Gardiner Tellers,
Mr Hannaford Mr Jobling
Mr Harwin Mr Moppett
Noes, 25

Mr Breen Mrs Nile
Dr Burgmann Rev. Nile
Dr Chesterfield-Evans Mr Obeid
Mr Cohen Ms Rhiannon
Mr Corbett Mrs Sham-Ho
Mr Della Bosca Mr Shaw
Mr Dyer Ms Tebbutt
Mr Egan Mr Tingle
Mr Hatzistergos Mr Tsang
Mr Johnson Dr Wong
Mr M. I. Jones Tellers,
Mr R. S. L. Jones Mr Manson
Mr Macdonald Mr Primrose
Pairs

Mr Gay Ms Burnswoods
Mr Samios Ms Saffin

Question resolved in the negative.

Amendment negatived.

The Hon. J. J. DELLA BOSCA (Special Minister of State, and Assistant Treasurer) [3.47 p.m.]: I move Government amendment No. 72:
    No. 72 Page 158, schedule 5, clause 14, lines 3-24. Omit all words on those lines. Insert instead:
      14 Initial premiums for third-party policies
      (1) This clause applies to third-party policies issued or taken to have been issued during the period of 12 months after the commencement of this Act.
      (2) The grounds on which the Authority may, under Part 2.3 of this Act, reject a premium or set of premiums filed under that Part for any such policy include that the Authority is not satisfied (after taking into account independent actuarial advice) that the majority of policies relating to passenger motor vehicles in metropolitan areas will attract a premium of not more than approximately $330.

Page 1728
      (3) This clause does not prevent a change in the initial premium or set of premiums filed under Part 2.3 of this Act if:
        (a) the change results in a reduction in the premium or set of premiums, or
        (b) the change is to take account of a change in the taxation treatment of relevant third-party policies or any other matter that could not have been reasonably anticipated at the time the premium or set of premiums was filed.

As the essential matters in relation to this amendment have already been put before the House in the previous debate I will be very brief, but I will reserve my right to speak further if any members’ contributions require an explanation. The Government amendment proposes a new clause 14 of schedule 5 to the bill to ensure that there is consistency with the remainder of the legislation, because the Motor Accidents Authority does not approve premiums, it merely has the power to reject them.

Further, the amendment proposes that if the Motor Accidents Authority rejects a premium under this provision and the insurer disputes the rejection, the matter is referred to the Independent Pricing and Regulatory Tribunal for arbitration. The amendment also allows insurers to further reduce premiums during the 12-month period after this legislation commences. Finally, the amendment allows insurers to adjust premiums to take into account the impact of the Howard Government’s goods and services tax.

The Hon. Dr B. P. V. Pezzutti: Where does it say that?

The Hon. J. J. DELLA BOSCA: Those are my remarks on this particular section. I commend the amendment to the Committee.

The Hon. J. F. RYAN [3.50 p.m.]: I move Opposition amendment No. 26:
    No. 26 Omit "the Authority may" from proposed clause 14 (2) in amendment No. 72. Insert instead "the Authority must".

This is an amendment of the amendment just moved by the Minister. It seeks to substitute for the words "the Authority may" the words "the Authority must". At the moment, the way the Government’s amendment is drafted, the authority might have a discretion in the matter. The Opposition is of the view that the authority must arrange for the provision of training and information. The Opposition amendment is about ensuring that the Government honours its commitment. The authority ought not have discretion about a matter such as this, particularly given that the provision of the Government’s amendment is meant to last for only a short period of time. The Opposition believes that the deal should be sealed to ensure that the authority must arrange for the provision of training and information.

The Hon. Dr B. P. V. PEZZUTTI [3.51 p.m.]: Now I understand what Reverend the Hon. F. J. Nile was talking about. He did not speak about the bill; he was talking about an amendment that had been discussed with him relating to the word "majority". I ask the Minister to supply me with an answer and to make that answer simple. What does "majority" mean? Does it mean more than 50 per cent, the overwhelming majority, or just a bare 50 per cent? One can have an average of $330 or a median of $330. I would hope it would be a median figure rather than an average figure.

The Hon. J. J. Della Bosca: It is a median figure. There is a statistical difference.

The Hon. Dr B. P. V. PEZZUTTI: If it is a median figure, that means there will be far fewer than 50 per cent more or less than it. It is quite an important consideration. That is why it does not provide for 50 per cent more; it simply says "the majority". I have another concern. Why does the Government’s commitment in the bill relate to only metropolitan areas? I would appreciate an answer from the Minister on those two questions.

The Hon. J. F. RYAN [3.52 p.m.]: In addition to the amendment that I have just moved, I seek to move Opposition amendment No. 27, relating to average policy, and Opposition amendment No. 29, to insert a new number with regard to policies. By leave, I also move amendments Nos 27 and 29 in globo:
    No. 27 Omit "majority of policies" from proposed clause 14 (2) in amendment No. 72. Insert instead "average policy".
    No. 29 Insert ", and that no policy will attract a premium of more than $422" after "$330" in proposed clause 14 (2) in amendment No. 72.

The purpose of Opposition amendment No. 27 is to omit "the majority of policies" and insert instead "average policy". The Opposition’s purpose in doing that is to ensure that the Government will guarantee all motorists a $100 cut in premiums. As the Government legislation is currently structured, only people in metropolitan areas, and only a number of those people, will have a $100 cut. I emphasise that the benefits of the cuts ought to apply to every
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single motorist, whether that motorist is driving in the city or in the country. Everyone suffers a cut to their potential benefit. Every person, whether living in the city or in the country, will suffer a cut to their potential earning capacities if they become horrifically injured in a motor vehicle accident.

The scheme applies to every motorist. The Opposition believes that the benefit of the $100 cut should apply to every single motorist. Opposition amendment No. 27 refers to average policy and seeks to ensure that the average premium is $330. As the provision is currently written, 50.1 per cent of premiums might be $330, and 49 per cent of premiums might range as high as $700. Current premiums for third party insurance can be as high as $700.

Opposition amendment No. 29 seeks to ensure that all motorists share in the premium cuts, not just some of them. If most motorists pay $330, none should have to pay more than the existing average of $422. The purpose of the amendments is that all motorists, whether high-risk or city or country motorists, have their potential risk as motorists reduced. The Opposition believes that everyone should share in the benefit that the Government has in mind. My colleague the Hon. D. F. Moppett has a further Opposition amendment to move.

The CHAIRMAN: Order! Before calling upon the Hon. D. F. Moppett to move the further Opposition amendment I would seek to clarify matters for the benefit of the Committee. It seems that a number of sheets of amendments have been circulated. On one of those Opposition sheets, which contains a number of amendments to Government amendment No. 72, the amendments are numbered 1, 2, 3 and 4. On another sheet those same amendments have been altered by hand as numbers 26, 27, 28 and 29. I did not hear the Hon. J. F. Ryan move either Opposition amendment No. 3 or Opposition amendment No. 28. If I am wrong and the honourable member has moved those amendments, I suggest he should notify the nature of the change - unless that is what the Hon. D. F. Moppett is about to do.

The Hon. J. F. Ryan: That is what my colleague will do.

The Hon. D. F. MOPPETT [3.55 p.m.]: I move Opposition amendment No. 28:
    No. 28 Omit "metropolitan areas" from proposed clause 14 (2) in amendment No. 72. Insert instead "New South Wales".

I want to refer to a misprint in the amendment in that, in the copy that I have, the amendment refers to clause 14 (2). The correct reference is 14 (3) (b). That is the clause and subclause to which the amendment applies.

The Hon. Dr B. P. V. Pezzutti: If you are amending the Government amendment, it would be clause 14 (2). Is that right?

The Hon. J. F. Ryan: That is right.

The Hon. D. F. MOPPETT: I stand corrected; I was referring to the original bill. Perhaps, for the benefit of honourable members who are listening, it might be worthwhile, if they are looking at the original bill, to note that the effect of the original bill is in clause 14 (3) (b). But, apparently, as far as it affects the Government amendment, it will be renumbered 14 (2).

There is no doubt that the very pedestal upon which the Government has placed its goal, and indeed the plinth on which it has built the wall of its argument about this whole bill, has been the reduction of compulsory third party insurance premiums. It is rather a paradox that the mechanism by which the actual reductions will be brought into effect is contained in the last page of the bill, in schedule 5. I think it is true to say that if the object of the bill is solely to reduce insurance premiums in this area, all of the arguments that have been adduced by the Special Minister of State, and Assistant Treasurer about improved delivery of benefits are rather cynical - if in fact the prime motivation of the bill is to reduce all premiums.

If, on the other hand, one were to listen to the course of the Minister’s argument that in actual fact the aim of the bill is to produce benefits more speedily and efficiently to victims, then indeed this part of the bill is an exercise in cynicism in trying to dress it up in the robes of a way of reducing compulsory third party insurances and introducing a mechanism whereby, under these provisions, they are reduced in the metropolitan area to $330. If there is one area of appalling cynicism it is that the reduction, according to this legislation, will apply only to metropolitan areas. It will not apply to the whole of New South Wales. By deduction, that means the people of country New South Wales will be left exposed to unregulated rises.

It could be inferred from the bill, without straying at all into fancy, that what will happen is that as the cap is put on the companies to which reference has been made - companies that have such a tenuous hold in the market that they are likely to
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depart at any moment, companies which, if pressure is put on them, find some sort of commercial unease - those companies will rack up the price of country slips, unless the Opposition amendment is carried. I believe this Opposition amendment is the most vital amendment that has been moved because it will give equity across the people of New South Wales. I know that the Minister, having spent so long at Sussex Street, regards the Central West as Harris Street, Ultimo. When he goes across the Iron Cove Bridge, he thinks he is in the far west of New South Wales.

A number of communities struggle to meet the tyranny of distance - we have learned of it in historical novels, which I am sure the Minister has read - that makes motoring costs in western New South Wales so great. However, the Government is prepared to stand idly by while such a provision, which could elevate the cost of compulsory third party insurance in country areas, is introduced into legislation. What a reflection that is on this new breakaway group that calls itself country Labor! When the first challenge to do something for country people -

Pursuant to sessional orders progress reported from Committee and leave granted to sit again.