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Wednesday, 9 March 1932

Mr A GREEN (KALGOORLIE, WESTERN AUSTRALIA) .- It is clear that the bill was brought down . in haste, for there was no preliminary intimation that such a measure would be introduced. The right honorable member for Cowper (Dr. Earle Page) had an insurance measure on the stocks for a year or two, and he outlined several directions in which the interests of the public might be safeguarded. This bill provides for a maximum deposit of £50,000 by life insurance companies, and of £40,000 by fire insurance companies. It seems to me that the Government will need power to examine the balance-sheets and books of the companies, and, therefore, I consider that the present bill does not deal thoroughly with the subject. The Vice-President of the Executive Council (Senator McLachlan), when introducing the measure in another place, said that it was designed to protect the people of Australia from improper use of the deposits lodged by insurance companies, and to bring about a uniform practice. That is what I desire to see accomplished under the bill. Such a measure is long overdue, but I am afraid that the interests of depositors are not properly safeguarded under this proposal. Six or seven years ago, before Mr. Lang came into power, New South Wales was the happy hunting ground of personsinterested in making money quickly by means of life and fire insurance business. If the Commonwealth Government of the day had done its duty it would have prevented a great deal of the loss caused by the depredations of persons whose main desire was to accumulate wealth in the shortest possible time. I regret that the bill gives no power to examine the accounts of insurance companies.

The Bruce-Page Government appointed a commission representative of the Labour and anti-Labour sides in politics to investigate, the subject of national insurance. That, commission travelled throughout Australia, and presented its report exactly five years ago this mouth. National insurance was an important part of the policy of the present Assistant Treasurer (Mr. Bruce) when he was Prime Minister; but the scheme propounded by the commission was promply shelved. Although opposing political parties were represented on that body, the members endeavoured to arrive at a compromise. Senator J. D. Millen, who was chairman, did excellent work in that capacity, and it must have been heart breaking to him and to the other members of the commission to find that their labours had been of no avail. If the Government considers £50,000 to be a sufficient deposit to accept from insurance companies, I should like to know why the following sums are required from the companies by State Governments: - Victoria, £449,000; Queensland, £1,500,000; South Australia, £490,000; "Western Australia, £559,000; and Tasmania, £280,000?

Mr Paterson - No doubt there are many insurance companies in those States.

Mr A GREEN (KALGOORLIE, WESTERN AUSTRALIA) - That is probably the explanation.

Life and fire insurance companies have run wild in Australia. Any effort to prevent the immense waste caused by having 37 life insurance companies, and 42 fire insurance companies operating here should be supported by honorable members opposite who are interested in commercial economy. Of the 37 life companies operating in Australia only six are purely mutual, and only one is a government institution. The number of life policies in operation is 908,807, and the value of them is £290,313,414. The surrenders reach the surprising figure of 12 per cent, annually. The expenses of management amount to 9 per cent, of the income, and commission and other expenses to 8 per cent., making 17 per cent, in all as the cost of running the business. This rate is far higher that it should be. If we had one Commonwealth life insurance office it would be beneficial to the people. The establishment of such an office would not necessarily mean that the other companies would be swept out of existence; it would mean that a spirit of healthy competition would be evoked.

New Zealand has had a government life insurance office in successful operation for 20 or 30 years, which has been able to police the life insurance business of the sister dominion just as effectively as the Queensland Government insurance office has been able to do valuable work of a similar nature in the northern State.

There are 42 fire insurance companies operating in Australia, New Zealand and FijiThis is a matter of particular interest to primary producers, who are called upon to pay extortionate premiums to secure cover against the risk of fire. The premiums paid to these 42 companies in 1929-30 totalled £8,304,000, while the losses accounted for £4,829,000. On a percentage basis, losses accounted for 58.15 per cent, of the income, and other expenditure for 33.66 per cent.; while the trade surplus totalled 8.19 per cent. The result of the operation of the Queensland insurance office has been that premiums have steadily fallen. I have not the exact figures, but when I last made an inquiry into this subject, I ascertained that the insurance rates of Queensland were to-day very much lower than when the State office began operations. 1

Honorable members opposite must surely recognize that considerable economies could be effected by standardizing the insurance business. A multiplicity of companies cannot possibly lead to efficient activities. I regret, therefore, that the Government has not seen fit to introduce a comprehensive insurance bill. This measure has been brought forward with some desire other than the real improvement of the insurance business; but whether it is designed to bring the Premier of New South "Wales to heel or not, I am certain that nothing but good could follow the introduction of a bill designed to stabilize the whole of our insurance operations. I hope that before very long a measure of that kind will be brought down for the consideration of the House.

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