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Monday, 18 November 2002
Page: 6586

Senator TCHEN (2:40 PM) —My question is to the Minister for Revenue and Assistant Treasurer, Senator Coonan. Will the minister inform the Senate what actions the federal government is taking to make public liability insurance more available and more affordable?

Senator COONAN (Minister for Revenue and Assistant Treasurer) —I thank Senator Tchen for the question and for his ongoing interest in this important issue. As senators on this side of the chamber would be aware, last Friday I convened the fourth ministerial meeting on public liability insurance, in Brisbane. The meeting was attended by ministers responsible for public liability insurance in each state and territory except, of course, for the caretaker government in Victoria, which sent an observer. I am very pleased to inform the Senate that the meeting agreed to a landmark package of national negligence reforms to make insurance more affordable and more available. All ministers at the meeting agreed with the thrust of the reforms put forward by the review of the law of negligence chaired by Justice David Ipp, and confirmed that they have already, or will shortly, move to introduce laws to implement the majority of those reforms recommended. Professional indemnity insurance was also discussed at length and there was strong agreement on the introduction of proportionate liability for economic loss, with some jurisdictions firmly committed to implementing legislation and others very close to finalising their positions.

It was also agreed that the issue of capping liability and risk management via professional standards legislation should be considered in detail as part of the ministerial forward work program. I cannot overstate the importance of this agreement. Since I began this process in March this year, the sceptics have continually been talking down the possibility of a nationally consistent response. Yet that is just what we have achieved from what was essentially a standing start less than 12 months ago.

We now have the evidence that the federal government's leadership of a national approach is on exactly the right track and will bear fruit for the community and for business. Since March the government has identified the problem and developed a concrete solution, and there is now clear evidence that this approach will work. An actuarial report by PricewaterhouseCoopers, commissioned by the ministers and presented to Friday's meeting, found that the reforms contained in the Ipp package could initially reduce public liability insurance premiums by around 13.5 per cent, with further reductions to follow once the impact of the reforms on curtailing claims cost is more readily quantifiable. Importantly, significant reductions in medical indemnity insurance premiums of between 15 per cent and 18 per cent were also estimated for most jurisdictions. Representatives of some of Australia's largest insurance companies and the Insurance Council of Australia attended the meeting and gave assurances that the reforms would positively benefit community groups and businesses that have been suffering as a result of the public liability crisis. Insurers agreed that the expected premium reductions will materialise and that the reforms will see more insurers entering liability insurance markets.

The Commonwealth has already introduced significant reforms to the federal parliament, and on Friday I announced that the Commonwealth would amend the Trade Practices Act to complement state and territory law reform. The need for an urgent solution to the crisis in public liability and medical and professional indemnity does not depend on accepting the arguments of the insurance industry; nor does it depend on comprehensively rejecting the pleas of plaintiff lawyers and those they represent. What it does depend on is governments undertaking the role they were elected to perform. Governments are compelled to act to address the very real concerns of people they purport to represent. Improvements are now being seen, as insurers re-enter the market. It is time we saw some positive action from those opposite and from the ALP, which has done nothing but bleat about price fixing since this problem began.