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Tuesday, 22 October 2002
Page: 5618

Senator WEBBER (4:43 PM) —I would also like to add some comments on the tabling of this report on public liability and professional indemnity insurance. In the first instance, I would like to say that this is actually the first Senate Economics References Committee inquiry that I, as a new member in this place, have been involved in, and I would like to place on record my thanks to the committee secretariat and all of those who provided both written submissions and oral evidence to members of the committee in an effort to make us better informed on this matter.

In opening my remarks I would like to pick up where Senator Collins left off. It became apparent to me, in considering the evidence that was given by those who appeared before the committee, that the constant theme was the government's inability to respond to a problem that has been confronting Australia since the increases in public and professional insurance premiums began to bite in early 2001. The problems caused by these increases have seriously impacted on community groups, small businesses and many professions.

In attending the committee hearings, I heard evidence from many of these groups and individuals throughout the inquiry. The one factor that was clear to me was that the increases in insurance premiums were so excessive that, for many groups and individuals, the only option was to stop doing what they did. This process has had a profound impact, as I am sure everyone here is aware, on the activities of all of our fellow citizens. Whether this is related to community events or to the withdrawal of medical or allied health services, these events directly affected the quality of life of our people.

Through this crisis, what has been the response of government? The answer—it became clear in considering the evidence— was: not much. As Albert Einstein once said:

Problems cannot be solved by the same level of thinking that created them.

In the situation where there was an insurance crisis in this country, the government's main course of action was to talk: talk and then talk more; talk and then apportion blame— blame the lawyers, blame the litigants, blame the insurance companies and blame the state and territory governments. At no time did the government say, `This is a national problem and we will work to find a national solution.' That would have required work rather than talk. That would have required thought. That would have actually required a new approach to insurance.

After all this time, what do we have? We have proposals to limit liability, limit the amounts of claims and limit the periods of time in which claims can be made. We have seen states, particularly New South Wales, move to tort law reform as a means of making insurance more affordable. But underpinning these moves is the expectation that insurance companies will move to reduce the cost of premiums. We can only trust that this will be the case, because the bottom line is that very little new thinking—and from this government, almost none—has been applied to this issue.

This problem should have presented to all of us an opportunity for reviewing whether we needed a new system. In New Zealand there is a very different system of insurance. Their approach has been in operation for over 25 years and has been modified over time. The committee heard extensive evidence about the operation of that system. Whether that model is appropriate in an Australian context is not the issue here; the issue is government inaction. If the New Zealanders can have a different system of insurance that keeps premiums low yet delivers fair outcomes to those injured and allows the capacity to litigate for negligence, then why was the Australian government so keen to do nothing? How can it be that when community groups were cancelling shows and events, and even Anzac Day marches were at risk, the Commonwealth took no lead? The answer, it would seem to me, is ideological: insurance, after all, is just a market—a market that should operate like any other market, apparently; therefore, the government will just let market forces operate.

It was only when that market demonstrated that people might not be able to go to the doctor that the government reluctantly stepped in. The government was forced to intervene, but did it come up with any lasting solutions? No. What it did was guarantee UMP for a defined period of time. When this bandaid solution started to run out, what did it do then? It stuck another bandaid on. Without the good work of state and territory governments in this matter, we would still be in crisis. This is a government that has shown that it is quite happy to fiddle while Rome burns. And the Rome that burns down is probably now uninsured because of the high premiums—an issue that this government just hopes will go away.

The reality is that this government are the most reactive, poll driven administration in our history. If the polls do not register something as an issue, they will just sit back and do nothing. As Woodrow Wilson once observed:

A conservative is a man who just sits and thinks, mostly sits.

It is only when the polls begin to show a negative that the government actually get up and do something. That something is mostly to rush around and engage in the blame game—all blame and no responsibility. For a few months they sit back and do nothing. The recommendations from this Senate committee will no doubt be ignored by this government, because now that the states have taken the lead the Commonwealth is quite happy to go back to sitting and talking. This all means that the insurance issue is not solved; it is merely no longer an issue that is showing up in the polls.