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Wednesday, 25 June 2003
Page: 17429


Mr HARTSUYKER (9:52 AM) —I rise today to speak on the Trade Practices Amendment (Personal Injuries and Death) Bill 2003. One of the biggest issues presented to me very early in my term as a new member following the November 2001 federal election was the issue of public liability. Coming from an electorate with a heavy reliance on the tourism industry and on small business and where community groups are an absolutely vital part of our social fabric, the issue of the skyrocketing cost of public liability insurance premiums and the skyrocketing level of claims was something that was brought to my attention time and time again. Out in regional Australia, many of the services which may be provided on a commercial basis in the city are provided by community groups and not-for-profit organisations because of the small population. Deputy Prime Minister John Anderson came to my electorate and talked to members of the tourism industry very early in the term of this parliament about the very grave problems that they were experiencing. Fine attractions such as the Big Banana were seeing insurance premiums rise—in their case, from $39,000 to almost $140,000. There was a huge escalation in premiums but, for these businesses, because tourism is a very competitive industry, there was no ability to increase prices. What were businesses to do? In many cases, businesses were just unable to find any sort of insurance cover at all. People in the horse riding industry—we had a number of companies which operated various trail rides—were forced to cease operation. It was tragic to see the loss of employment and businesses being effectively closed down purely because of a lack of insurance cover.

I am pleased to say that the federal government acted to assist in this situation with a range of measures, which I will come to in a moment. I must also say that the states, to their credit, have cooperated in the process. This was always going to be a problem that needed to be addressed at both the federal and state level. If we had had the degree of cooperation in delivering drought relief for farmers that we have had with the states in relation to public liability insurance—and I see the Minister for Agriculture, Fisheries and Forestry at the table—we would have had a much better package for farmers.


Mr Truss —You are dead right.


Mr HARTSUYKER —Yes. I would like to talk for a moment about what the federal government has done in concert with the states on public liability. The government has introduced a number of pieces of legislation. First there was the Taxation Laws Amendment (Structured Settlements and Structured Orders) Act 2002, the aim of which was to remove the barriers to structured settlements to encourage people to take an annuity rather than a lump sum. This was to avoid the problem that many who are seriously injured experience when they receive a major lump sum payout, where perhaps that lump sum is not invested wisely and ultimately they do not have enough to meet their increased medical needs and to support them during an extended period of disability. The structured settlements changes aimed to eliminate the prejudice within the tax system which favoured a lump sum rather than an annuity which would provide over the long term for the wellbeing of an injured person.

Then there was the Commonwealth Volunteers Protection Act 2003. In the electorate of Cowper we are very dependent on a lot of good work by a lot of volunteer groups. The act exempts Commonwealth volunteers from liability. It was another important step. The third piece of legislation introduced by the government was the Trade Practices Amendment (Liability for Recreational Services) Act 2002, which focused on a very important principle: enabling people to take a higher degree of personal responsibility for their own actions. Where people are participating in an inherently dangerous activity—perhaps bungee jumping, skydiving or white water rafting—it is reasonable that people accept that there is a degree of risk involved and that, despite the best practices in the world, accidents and injuries can occur in those very risky activities. This act amended the Trade Practices Act to allow people to sign waivers to accept a degree of personal responsibility in participating in those activities. That was very vital in my electorate because we have a very heavily patronised white water rafting industry. Anyone who has ever been on a white water rafting tour would know that, whilst it is a very exhilarating experience, it is also quite risky, with a very real risk of incurring some form of injury. I have participated on a number of white water rafting expeditions and found the work force involved to be highly trained and professional. Despite that, there is an element of risk, and those amendments to the Trade Practices Act were a way that the federal government could assist in addressing those issues of risk—allowing people to still participate in those activities, but helping to solve the insurance problems which were being generated as a result of unrealistic expectations from some of the community that, when someone is injured, someone else has to pay. That was a very good move.

In my electorate, places such as the Pet Porpoise Pool were experiencing difficulties in getting public liability insurance. They had a very interactive show where people were able to pat the seals and dolphins. The problem was that insurers were running scared that people may be injured during an interaction with the wildlife. As a result of the reforms that have flowed through the system, the progression of reforms from the federal government and the reforms that have been put in place through cooperation with our state governments, the Pet Porpoise Pool—which was realistically looking at the possibility of closure—has been able to secure insurance cover and has been able to continue providing a lot of entertainment for people who visit Coffs Harbour. There are very good employment prospects for the people who work there. So this is the government acting in concert with the states to keep small businesses open.


Mr Cox —Dolphins do bite!


Mr HARTSUYKER —Indeed they do bite, and it is a very real risk if you interact with animals.


Mr Cox —I have been bitten by one!


Mr HARTSUYKER —The member opposite has been bitten by a dolphin. The Trade Practices Amendment (Personal Injuries and Death) Bill 2003, which is before us today, is another plank in the government's reforms of public liability insurance. The bill proposes to remove the right to recover damages for injury or death caused by a breach of part V, division 1 of the Trade Practices Act, which deals with misleading and deceptive conduct, false and misleading representations, bait advertising, harassment, coercion and pyramid selling. This bill provides reinforcement and is another step in our program of reforms to improve the public liability insurance situation. It is part of our program to make sure that small businesses are still able to operate by being able to access insurance at a reasonable price in the marketplace.

To her credit, Minister Coonan has been very proactive in this field. As part of the program, Minister Coonan in October 2002 released the review of the laws relating to negligence. It covered a range of issues, such as professional negligence, reform of the Trade Practices Act, limitation periods and reforms to assist not-for-profit organisations, limiting liability of public authorities, self-assumption of risk to override common law principles—which I spoke about earlier—proposals to restrict the circumstances in which a person must guard against the negligence of others, and the replacement of joint and several liability with proportionate liability. Minister Coonan has been very active in this area and, to her credit, we are seeing some real results on the ground. Justice Ipp had a number of things to say about the insurance problem and negligence laws. He said:

The fact is that insurance companies are not prepared to provide necessary insurance (or are only prepared to provide it at unaffordable rates) because of the unpredictability of the law, the ease with which plaintiffs succeed and the generosity of the courts in awarding damages.

I am pleased to say that the laws that this government has put in place and acted on are moving in the right direction, and I believe that we are starting to get on top of the problem. There are other factors relating to this issue—such as the disaster of September 11, the collapse of HIH and the fall in investment returns being received by many insurance companies. So it is not just about the issue of claims; there are also other factors within the insurance market: a fall in the capacity of the insurance market and a number of disasters, such as September 11, which previously were not costed into insurance premiums. They all absorb capacity for insurance in the market, making insurance more scarce and, as a result, forcing insurance premiums up.

The Minister for Small Business and Tourism, Joe Hockey, has also been a very keen champion for small business and the tourism industry. He has been very proactive in those areas. Recently he came to my electorate and toured the coast. He called into a number of tourist attractions. I am pleased to say that, if it were not for the reforms that the government have put in place, I think those tourist attractions may not be operating today. I commend the actions of the government in introducing a range of reforms in public liability insurance. This latest amendment to the Trade Practices Act is another step down that road. I am pleased that we have been able to achieve a degree of cooperation with the states. My only sadness is that we have not been able to achieve the same degree of cooperation with respect to drought reform. If we could achieve that, we would be able to achieve a lot more in that area. We would be able to tailor packages to meet farmers' needs in a much more expeditious way. I think the impact of drought is a very vital issue in regional and rural Australia. A large part of the problem is being generated by the failure of the states to cooperate with the minister for agriculture, Warren Truss. I certainly commend this bill, and I certainly commend the work that the government has done in the area of public liability.