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Thursday, 9 December 1971
Page: 4460


Mr CREAN (Melbourne Ports) - The Opposition welcomes the intent of this legislation which at least spells out for the future a code of behaviour as far as what is described as general insurance is concerned. I think that the Treasurer (Mr Snedden) described it as a large and important business. I do not think it is always realised that in aggregate the premiums of what are described as general insurance - covering such things as fire, marine, workers compensation and housing insurance - amount to over $ 1,000m annually. The amount of premiums is getting pretty close to the amount which the Government spends annually on defence.


Mr Snedden - lt is half that amount.


Mr CREAN - Government defence expenditure is about $l,200m. It is not half. The Treasurer will have to learn his arithmetic a little bit better than that. This amount is getting close to the magnitude of defence expenditure, but nevertheless up to date it has not been subject to any overall regulation. 1 shall quote section 51 of the Constitution, that great section which delineates the fields in which the Commonwealth may make laws for the peace, order and good government of the Commonwealth. Placitum (xiv.) states:

Insurance, other than State insurance; also State insurance extending beyond the limits of the State concerned:

At least we entered into the field of life assurance and were quite successful in carrying out that responsibility. Many years ago when the Treasurer was in a less distinguished position - I think that he may just have emerged as the Attorney-General - I asked why the Government did not appoint a Commissioner to be responsible for this type of insurance. If he looks back in the Hansard I think he will find that in the early 1960s or the late 1950s I asked why the Government did not appoint in the field of insurance other than life assurance a commissioner similar to the one who operates in the life assurance field, and I think the Treasurer suggested to me in reply that he did not think it was necessary. At least he has now acknowledged this need. I pay tribute also to one of my colleagues, one of the new members, the honourable member for Hawker (Mr Jacobi), who has had some experience in this field. He has raised this kind of matter also. As recently as the last debate on the Treasury Estimates only a few weeks ago I suggested - I appreciate the difficulties in legislating in this field - that we have somebody to examine general insurance; that the Government should appoint a Commissioner who could at least explore the field in advance and indicate the scope of the legislation required. It seems to me that the Treasurer has at least now indicated a code.

The need for this kind of legislation has been brought home to us recently by the experience of the sort of straw companies that have operated particularly in the field of motor insurance. I think it is a terrible thing in the community when literally anybody with virtually no capital, and not having even to indicate any provision in relation to the policies he writes or in relation to the risk that may be incurred, does not have to spell out any kind of ratio. At least the Treasurer has now indicated that legislative action will be taken in this field and 1 commend him for it. Again I thank him for indicating in advance the nature of the proposed legislation. I think we appreciate the difficulties that are involved in bringing this legislation forward, but I hope it will be introduced early in the next session. When the honourable member for Berowra (Mr Hughes), who was in the chamber at the beginning of the debate but who is not here now, was AttorneyGeneral I asked him a question at least 12 months ago about whether certain straw companies were using the facilities of registration in Canberra when in fact they were operating in other States. I must say that I was assailed by all sorts of telegrams the day after I raised this matter with the Treasurer's colleague. AH the companies that protested their innocence have since gone broke. At least it was indicative that there was at least a smell in that field.

Motor insurance is one type of general insurance. In this country something like 500,000 new motor cars are bought each year. Apart from America and Canada we have almost the highest ratio of motor cars to population of any place in the world. So motor insurance is an important field of insurance. Other types are workers' compensation and fire insurance. Premiums for all these types of insurance add up to something like $ 1,000m annually. At least J welcome the proposition that now, belatedly, the Commonwealth is moving into the general insurance field. The Government having acknowledged the need to go into this field I hope that it will move as quickly as is possible, and I would hope that when we come back, discounting for the moment all the talk about an election later next year, we will be able to consider this legislation on insurance with some degree of tranquillity and some degree of detail. I hope that the Treasurer and his advisers will press on in the next 2 or 3 months and have the Bill ready for us when we resume next year.

I hope that the Treasurer will lay the Bill on the table for a few weeks so that those who are involved can give us the benefit of their expertise. I had to take part in a broadcast today, and someone said: There is a lack of expertise on the Opposition side'. I said: ' "Expertise" is an awful word'. I think there is a place for expertise, but once we start talking about expertise it gets a bit tedious. But at least the expert can tell the not-so-well advised in a field what he thinks should be done, but ultimately it is up to the Ministers to determine the code of operation. At least the Treasurer tonight has spelt out a code in some detail, and I thank him for it. My only regret is that the Commonwealth did not decide to enter into this field much earlier. I am directing my remarks not so much to the Treasurer as to his predecessors.

I hope that when we come back here in February ari*d early March this will be one of the first Bills placed before us and that we will have time to look at it in detail and have a proper committee debate on it. Committee debates where we can get down to details are lacking in this House. I would hope that the Treasurer will not think that the only expertise or the only expert information available is on the Government side and that he will give kindly consideration to sympathetic amendments moved from the Opposition side in this field.

Debate (on motion by Mr Giles) adjourned.







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