Mr TANNER (11:18 AM) —In considering the Trade Practices Amendment (Personal Injuries and Death) Bill (No. 2) 2004 it is extremely important that our starting point be a genuine awareness and understanding of the circumstances that face people who have suffered serious injuries. One of the things that often gets lost in the debate on these issues is the reality that far too many Australians suffer very serious injuries at work, in car accidents, in public places and in other circumstances that in some cases cripple them and in many cases affect them for the remainder of their lives.

There are many Australians who have suffered injuries in employment or other circumstances where it is not an exaggeration to say that their lives have been all but destroyed. Serious back injuries that lead to operations that lead to chronic pain can lead to an inability to perform a whole range of very basic human activities and functions. Many people are no longer able to work in the areas that they have traditionally been involved in; people suffer lives of continual misery, loss of opportunity and in some cases a marriage breakdown or loss of amenity of life. There are all sorts of quite often very tragic consequences for people who suffer injuries.

It is important to make the point that often in this type of debate the people who are central to the debate are overlooked. So in this debate everybody is worried about insurance premiums and everybody is worried about legal interpretations, but many tend to overlook the people that these issues concern; that is, the injured workers, injured citizens and others whose lives have been blighted by accidents that were not their fault.

The core question under this legislative proposal and some of the others that we have considered in recent times is: how should our society deal with people who suffer such injuries; how should we make provision for those people? It is essential that we remember that our primary objective has to be to ensure not only that we minimise the incidence of such injuries but also that we as a society make provision for people who suffer these injuries to live as fulfilling and worthwhile lives as possible, in spite of the fact that their lives have been changed by the injuries that they have incurred. The existing systems that we have throughout Australia do not do this; they do not achieve that objective. They could be a great deal better.

It is unfortunate that these issues only come into the public domain—only attract media attention—when there are concerns about insurance premiums. We have had thousands upon thousands of Australians who have been injured, suffered very serious loss, both economic loss and personal or social loss, yet the only time that these issues get much public attention is when insurance premiums go up and people paying the premiums complain about it. It is an indictment on our society that we all too often overlook the interests of people who have suffered serious injuries and we all too often neglect them. We all too often fail to understand that their lives have been either totally wrecked or very severely impaired and that we as a society have a responsibility to ameliorate their suffering.

The legislation before us today relates to the Trade Practices Act and the capacity of individuals to make statutory claims against those who have caused or contributed to their injuries as well as common law claims. One of the standard things that occurs in the legal process is that if there is a cause of action between a plaintiff and a defendant then those representing the plaintiff will always look for alternative means of pursuing that claim. It is quite common to plead a cause of action in the alternative where different themes, different legal foundations, are provided for a particular claim. Obviously, a person cannot be compensated twice for the same loss, so the magnitude of the outcome is generally not affected by this approach, but the capacity for the individual plaintiff to succeed is clearly affected. That is really at the heart of the legislation before the House today.

It is one thing to cap the available damages. Labor governments throughout Australia have been doing this bit by bit in recent times, restricting the capacity of individuals to succeed in common law claims arising from personal injuries. I have substantial reservations about that, but it is understandable why governments have to act to restrict those damages, to restrict the quantum of what is available to a person who successfully sues for personal injuries under common law. It is an entirely different thing to reduce the chances of that person succeeding in a common law claim by taking away an alternative basis for a statutory claim. Rather than restricting the magnitude of a financial payout, the government is proposing to diminish the ability of a plaintiff to succeed in establishing liability—to succeed in prosecuting and winning their case. That is an entirely different thing, and it is of much greater concern.

The question of capping damages payouts is a legitimate matter, a legitimate concern. Although I have some differences of view with the various state governments over some of the things that they done, I understand why they have acted in that way. In many cases a fairly respectable argument can be advanced that there is a need to impose some of the limitations that have been opposed. But it is a very different thing to take away a right of action and thereby diminish the chances of a plaintiff succeeding. That is something of a more serious magnitude, in my view.

Why are these things happening? In part, there is an understandable overreaction to the perceived crisis in insurance, which in many respects is of the insurance industry's making and largely reflects the substantial reduction in the stock market, particularly internationally, that has occurred since 2000. Insurance companies tend to make their money on investments, turnover and cash flow, so a downturn in the stock market will affect their financial position. It also reflects a period of unsustainably low premiums on many insurance products and loss-leading competition by companies like HIH and various segments of the insurance market.

We have a crisis to some degree, but in part it reflects both the normal dynamics of the insurance industry and an element of irresponsible behaviour. The tragedy is that it will be injured people, including injured workers, who will have to pay the price for these problems. They will suffer the double whammy of seeing insurance company profits return to pretty rude health in the very near future, if they have not already, at the same time as these changes are being made to restrict the magnitude of payouts.

One of the problems with the insurance approach to injuries and the individualised approach to injuries is that deep down there really is not much of an incentive for insurance companies to reduce the incidence of injuries, because that is their business. Their business is to insure against injury and death, and liability on the part of individuals whose actions contribute to or cause those injuries or death. Although the insurance industry can point to many programs and activities that they undertake and premium structures that purportedly are designed to diminish the range of injuries, in reality there is no strong driving vested interest inherent in the system pushing for a reduction in injuries, death and accidents, because ultimately, were we hypothetically to have no injuries, there would be no insurance industry covering this area and nobody would be employed or earn profits insuring against these kinds of things. In the system there are drivers for reductions to a degree, but there is not a very strong inherent driver of economic self-interest pushing for substantial reductions in injuries and accidents.

The fundamental weakness of the system is that it is based on 19th century British tort law and concepts of individual rights that emerged from the Manchester school and the Industrial Revolution and which really are antiquated and out of date in modern society. These rights entail the notion that your entitlement to compensation should be based not on need, not on the magnitude of your injuries, so much as on the circumstances in which you were injured.

Rather than the society saying to an individual, `You've suffered loss. You've suffered an injury that has affected your capacity to earn income and has affected the quality and amenity of your life. We will compensate for that in a particular way and we will judge you in the same way we would judge anybody in the same circumstances,' the society effectively says, `Tell us how the accident happened. If we can attribute blame to somebody and they are insured then you are in luck. If not, if the circumstances of the accident are different, sorry, you lose out.' That is the effect of the current system.

If you have a common law claim—if you were injured at work and you can demonstrate negligence on the part of your employer—things are not too bad. If you were injured at work but there was no negligence, you still have the workers compensation entitlements. They are not as good as common-law claims in net overall terms, but they are still significant. If you fall off your roof at home on a Sunday afternoon while you are trying to fix the tiles, all you have is the social security system. You cannot sue anybody, but you are in precisely the same position as somebody who has suffered the same injuries and who has a workers compensation entitlement or a common-law claim to pursue.

So there is an inherent inequity in the system—an inherent inability to focus on need and on our society's obligation and responsibility to individuals to ensure that they have the capacity to live full, decent lives. If they suffer injuries that are no fault of their own or where society does not impose criminal blame upon them, in some way, by some mechanism, we should compensate at least partially for that.

There have been recent instances that illustrate the downside of the common law system, but this is nothing new. I can remember being a lawyer doing common law 20 years ago. At that time I was getting settlements of $5,000, $7,000 and $10,000 for people who had suffered a bit of neck pain and headaches for a few weeks when somebody had run into the back of their car—no permanent injuries, no serious disabilities, a bit of time off work and you get them $5,000, $7,000 or $10,000. Twenty years ago that was quite a significant amount of money. That was all based on the common law system as it then was.

That opportunity has, thankfully, been removed, but still with public liability you have similar kinds of situations. The problem is that you are seeing compensation going to some where it is less important and many others missing out altogether. That is the inherent problem with a system that is based on a notion of individual rights and fault and blame. It is also important to recognise that, in the United States in particular and increasingly in our society, the capacity of an individual to sue is becoming a de facto means of regulating the behaviour of major companies. It is clearly a means of redistributing power, influence and wealth in the United States—not all of it good given the role that certain kinds of lawyers tend to play. Nonetheless it has become an important de facto regulatory mechanism to restrain the power and activities of major corporations. It is not the best way of doing that but, nonetheless, that is how it has evolved.

There are certain elements of that in Australia and I suspect that those elements are increasing. In my view it is not the best way to go about regulating large corporations and protecting the rights of individual consumers and citizens, but we should be very wary about abandoning such mechanisms that already exist without compensating for that abandonment by developing alternative mechanisms for protecting the rights of the ordinary citizen in our society. The problem with the approach the government is taking to this is that it is trying to have it both ways. It is trying to maintain an individual rights based system where substantial numbers of people miss out—where some win the lottery, where some can establish negligence, where some have got claims—but at the same time reduce the entitlements of those who are fortunate enough to have a claim to pursue. In other words, it is robbing from Peter but it is not giving to Paul.

I would be very happy to support curtailing the common law system. In fact, personally—not making a statement on behalf of the Labor Party but personally—I would abolish it. I am a strong supporter of the New Zealand national compensation scheme. I was very pleased to see the Minister for Small Business and Tourism float the proposition some time ago. Unfortunately, he scuttled away from it very quickly. But I am a strong supporter of that model. I think it is the most just, fair and appropriate way of providing compensation for all people who are injured in our country—to ensure that need is the basis for compensation, not the arbitrary serendipity of individual circumstances where, if you can establish negligence or if your job is involved, you actually have got some entitlement to compensation but, if not, you are out of luck.

We should move to a needs based system. Unfortunately, there are very powerful vested interests on both sides of the political fence that do not support this proposition and it is unlikely to become the law in the foreseeable future. I have not given up on it, though. It is something that I believe would be a very important reform for our society and it is pleasing to see that not all members on the other side are absolutely opposed to this kind of idea either. To me it is a commonsense thing that would be a fairer, more just and ultimately less costly way of dealing with injuries in our society.

The primary argument that is put against this kind of proposal is the threat of governments using direct budgetary control of this kind of system to cut back entitlements, so that when you have a statutory system there is always a fear that government budgetary constraints will lead to compensation payments being diminished, whereas when you have independent courts making decisions about these payments you will have a greater degree of sympathy for the rights of individual victims of injuries and therefore the risk of cutbacks in entitlements is lower. The legislation that we have seen from the government on these issues, and indeed from state governments, suggests that, although this argument probably once held some merit, it does not any more, because we are seeing precisely the same thing occurring via government legislation anyway with the existing system built on common law individual rights—hence my observations that the government is trying to have it both ways.

I think it is time we return to the proposition of the possibility of a national compensation scheme built on need not fault. Broadly speaking, although it has had problems from time to time, the New Zealand system has worked, and in my view that approach, with appropriate modifications—you would not adopt it identically—is right for Australia. I would like to see us pursue an interest and pursue the development of those models and that kind of approach, and ensure that we can eventually get to a point in this country where all people who suffer injuries and therefore suffer loss of income, loss of future opportunity both economic and social and loss of amenity of life can be compensated appropriately for their injuries and loss based on their need—based on the magnitude of the loss, not on whether or not they have the good fortune to be able to demonstrate negligence on the part of another party who happens to have insurance.

That is a major reform agenda that I would like to see us pursue. I suspect it is unlikely to eventuate in the near future but, nonetheless, it is an important component of this debate. What is unacceptable is to retain a system built on individual rights where some do miss out—and many miss out in very unfortunate circumstances—and at the same time chip away at the magnitude of entitlements that those individual rights lead to. There is a need for reform, but sweeping reform not piecemeal reform. I look forward to the day when our parliament will be debating that kind of sweeping reform and we will move beyond the 19th century and look at a comprehensive scheme for ensuring that our society is genuinely inclusive and that injured workers and injured people generally get decently compensated on an equal basis.