Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Thursday, 27 May 1915

Senator MILLEN (New South Wales) . - It is not my intention to occupy the time of the Senate unduly, because it is the desire, I understand, of insurance companies interested in this matter to approach the Minister in charge of the Bill, and the Attorney-General, who is responsible for it, with the object of making representations to make the measure thoroughly satisfactory. It is a technical Bill, largely one requiring work in Committee, and I do not feel I should be justified in occupying the time of the Senate by discussing what may be regarded as its main provisions at any, length. But there are two points which I think require consideration. The Bill departs from the report of the recommendation of the Commission by providing for life and fire insurance. Whilst that is the custom in England, the Commission points out, rightly, that the business in Australia has developed along different lines, and it makes a strong recommendation that' we should deal with those matters in separate measures. I would, therefore, like to ask the Minister if he cangive any reason for departing from a recommendation of the Commission. We might reasonably ask that, because we are told that the Bill is largely based upon the work of the Commission, and there appears to be good reason to know why, in an important particular, the Government have ignored the recommendation of the two gentlemen who acted as that Commission.

Senatorde Largie. - They have pretty well swallowed the report, with the exception of the matter the honorable senator refers to.

Senator MILLEN - There are other matters, but that is the major objection to the Bill, though I do not urge it as a vital one. I am only inviting the Minister to give his reasons why the conclusions of the Commission have been overridden. There is another matter. I recognise the fact that this is a Bill for Committee more than anything else, and I am referring to these matters now, so that when we get into Committee, the objections having been stated, honorable senators will have had an opportunity of considering and thinking them over. In the Bill there are certain clauses dealing with fire insurance, and clause 81, and, possibly, clauses 82 and 85, make it a penal offence for a company to charge an unreasonable rate. I submit that you cannot deal with business operations of this kind, involving technical and complicated considerations, and determine by any arbitrary rule what may be an unreasonable rate. These companies base their rates on their experience of averages. In Australia the field of operations is comparatively limited, and there may be only four or five transactions of one. particular class, such as, for instance, factories in this city. Now, that number is so small that it will be almost ridiculous to determine by any arbitrary method whatis a reasonable rate. Of course, you can average five as well as 500, but you cannot get the same reliable basis upon which to determine what may be a fair rate, and, therefore, while a certain rate may be fair and entirely reasonable for one class of business it would not be so for another. For these special reasons, and owing to the small area of their liabilities, it would be unfair to be guided by the larger and more common risks which are carried. I think the Minister will see that there ought to be some machinery under which these companies can be guaranteed that there shall be a reasonable interpretation of the rate. It is a difficult matter to define. We cannot expect that a num ber of people will put their money into a business of this nature if it is liable to be destroyed by any arbitrary interpretation of what a reasonable rate should be. The Minister in his speech said it would be determined after consultation with the Commission and the representatives of the companies, and that a mutual arrangement would be arrived at to settle this matter. But there is nothing of that in the Bill. It sets out that it will be regarded as an offence if an " unreasonable " rate is charged, and if it is decided to maintain the clause - I think it ought to go out altogether - we ought to devise some expedient which will be a reasonable guarantee that these companies will have a fair interpretation of the clause.

Senator Gardiner - A licensed hotelkeeper has to sell reasonably good drink.

Senator MILLEN - I would point out to the Minister that, if he wishes to make a parallel, the companies are required to insure that a man will get what he pays for. I think I have said enough to convince the Minister that there is a possibility of some danger unless, in the interpretation of what is a "reasonable" rate, there is exercised an amount of human ingenuity which is rare in these matters. I have said all I wish to on the Bill at this stage, and, in view of the fact that representatives of the companies intend to approach the Minister in an entirely friendly spirit, recognising the desirability of legislation of this kind and with a desire to make it a practical measure, I would suggest that we should postpone consideration of the Committee stage. I understand it is impossible for the Attorney-General to receive a deputation until he returns from a neighbouring State. I would put it to the Minister that, in order to make the Bill workable, it would he desirable, after the second reading has been passed, to leave the Committee stages till the Minister has received the deputation, which, I feel sure, will offer some practical suggestions concerning the

Suggest corrections