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Thursday, 19 March 1987
Page: 1204


Mr GEAR(10.21) —I would like to bring to the attention of the House tonight a situation where consumers are likely to be denied their right to compensation by major insurance companies. The case concerns a constituent who had the master cylinder for his car's braking system topped up at the local garage. However the wrong oil was used and it was contaminated. As a result the complete braking system had to be replaced. My constituent asked the mechanic to differentiate between work carried out that could be considered normal wear and tear and damage caused by oil. I would point out that the majority of the costs involved were for parts and not labour. Indeed it was a relatively new car and the brakes were in near new condition.

The garage admitted liability and passed the account on to its insurers, the City Mutual General Insurance Co. I wrote to City Mutual requesting it to take a responsible position as insurers. However I regret to say that the company refused its obligations and I quote from its letter which states:

The matter of the damage to the third party vehicle was investigated thoroughly by competent external assessors and we believe our decision to be correct. In view of this we are not prepare to change our attitude and we now leave it up to . . . as to whether he wishes to take further action.

There was no doubt that these competent external assessors were wrong and I advised my constituent to take the matter to the Small Claims Tribunal. The Tribunal found in my constituent's favour and ordered the payment of $1,129. Before the Tribunal the insurance company said it was not responsible because only a small amount of oil was analysed-by the Castrol Oil Co. which confirmed contaminants were present in the oil-and that the effects would have been visible in 24 to 48 hours whereas the brakes failed 10 days after the oil was introduced.

I am concerned that my constituent had to wait seven months and go to the trouble he did to get his just compensation in such a straightforward case and would suggest that consumers are being ripped off by actions such as this. Consumers deserve better treatment and insurance companies that eagerly accept premium payments should not try to frustrate their customers.

It appears to me that in this case the City Mutual General Insurance Co. has placed a premium on dodging its obligations rather than honouring them. I am informed that it has recently changed its name to Capita and expended a considerable sum of money on corporate advertising. All I can say is that if the company treats its customers like it has my constituent, then it is no wonder it has changed its name. I trust its name change will be matched by a policy change, that of putting the consumer first.

While I am talking about consumers, I would like to draw the attention of the House to an article that appeared in this morning's Sydney Morning Herald on page 15. The title of the article is `How price awareness can pay off'. Ever since the Prime Minister (Mr Hawke) announced the initiative on prices and appointed the Minister for Science and Minister Assisting the Treasurer on Prices (Mr Barry Jones), who is at the table, to undertake that task on behalf of the Government there has been a lot of cynicism around about what the Government can do about prices. We all know that the Government's powers in relation to prices are very limited indeed. But I believe this article gets it right, because it shows that even without enacting legislation there is a lot that we can do to help people shop more efficiently. The article goes on to point out that a number of supermarkets in Sydney were compared on 10 basic items, with the cheapest coming in with a price of $18.61 compared with the dearest of $28.33. So honourable members can see that just on 10 basic items there is about $10 difference. I would just like to point out to the House some of the differences that occurred in that survey. Sugar is something that Queenslanders know a lot about and have a lot of compassion for and it is a basic necessity-


Mr Andrew —The compassion is for the growers.


Mr GEAR —Well, they are very compassionate about the growers up there; that is what I meant to say. The lowest price was 77c and the highest price was $1.84, a difference of 239 per cent. So honourable members can see that what the prices task force is doing is pointing out to consumers that in actual fact if they shop at these supermarkets that do offer lower prices they can, through their purchases, force the higher priced supermarkets to put their prices down.


Mr Beale —Tell us about biscuits.


Mr GEAR —I ask the shadow Minister for prices matters, who is interjecting, just to have a look. There is an article on biscuits in here if the honourable member would like to have a look at it. I say to the honourable gentleman: `Have a look at that article and then you might understand what the Government is doing to try to help people shop more efficiently'. It helps consumers. It helps our constituents and it shows that the Government can do something.


MADAM SPEAKER —Order! The honourable member's time has expired.