Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 6 October 1971
Page: 1981

Mr CREAN (Melbourne Ports) - There are one or two things I should like to say about the Treasury estimates in the 10 minutes allotted to me. I want to say something about several matters that the Government claims it has under attention and about which nothing has yet been done. The first one I wish to refer to is insurance other than life assurance. I point out that in terms of section 51 (XIV.) of the Constitution the Commonwealth has power to make laws with respect to insurance, other than State insurance, and also State insurance extending beyond the limits of the State concerned. As my colleague the right honourable member for Melbourne (Mr Calwell) indicated in a question this afternoon the Commonwealth legislated in 1949 in regard to life assurance but there is no comprehensive legislation dealing with insurance other than life assurance. When it is pointed out that such premiums aggregate annually a sum of the magnitude of $900m it seems that insurance has reached a level where it is too significant to be allowed to run in the haphazard fashion in which it is now running.

We all know that recently there have been quite a number of scandals in the field of motor car insurance where members of the public have unwittingly paid premiums to companies that have proved to be little better than swindlers. This matter has been raised over a considerable period. I asked a question myself last year of the then Attorney-General, the honourable member for Berowra (Mr Hughes), pointing out that the ability of companies to register in Canberra was being used to float these straw companies. The Prime Minister (Mr McMahon) this afternoon indicated that it was a very long business to draw up a comprehensive insurance Act. I would agree with that but I suggest that he should begin by appointing a commissioner in this field just as there is an Insurance Commissioner in the life assurance field.

One of the first things, that needs to be done is to increase the amount of deposit that has to be lodged before any company can undertake business. What happens is that these companies are formed and then shrewd salesmen go round concerned only to get premiums and not being concerned whether if a certain number of accidents happen the insurance claims ' could be fulfilled. Nobody ought to be able to start an insurance company in Australia under such flimsy conditions. I submit that it is not necessary to wait until a comprehensive Act is written that will cover every branch of insurance in Australia other than life assurance. The Government should begin by appointing someone who at least can begin to co-ordinate this business. We spend not very much less on insurance other than life assurance than we do on defence expenditure and I think this is too large a sum to be allowed to run in the haphazard fashion in which it has been allowed to continue.

The other matter that I think is highly significant as far as the Treasury is concerned is the question of doing something about what are called fringe finance institutions - institutions that in many respects are more like banks than they are not, but unlike banks are not subject to any overriding control of their ability to extend credit. In the current report of the Reserve Bank tabled in this House only a few weeks ago the Bank indicated- I am afraid I do not have the exact -quotation - that these non-bank undertakings were creating difficulties with important implications as far as policy is concerned. The Reserve Bank made no attempt to spell out what these important implications were and I suggest again that it is time that the Government began to give us some indication as to what these important implications are.

My Party has always believed that what ought to have been done here is to treat these fringe institutions as though they were banks and to legislate accordingly and if the legislation was challenged in the High Court then the Government could proceed to seek powers by way of referendum. Despite all the brilliant constitutional lawyers who suggested that it was not competent for the Commonwealth to legislate, apparently the High Court in the recent trade practices decision indicated that the coast was quite clear for any government in Australia to legislate in this field and I hope at last that that field will be entered fairly quickly and we will not again have to await protracted examination before some sort of skeleton attempt is made to grapple with it.

The other matter that the Government has also claimed it has been going to do something about is the introduction of what have been described as forward estimates. In the previous Budget the former Treasurer, my friend the honourable member for Wentworth (Mr Bury), indicated that the mechanism was set up and he hoped, had he been doing the Budget this year, for the first time to bring forward not just a series of estimates for one year but a series of estimates for 5 years. I think that was the period, but I am not sure that it was not later modified to 3 years. This has been practice now in the House of Commons for several years, lt was done originally in the form of what is described as a Green Paper as distinct from a White Paper and that, as I understand it, is simply a document that is available for discussion purposes to enable people inside and outside the Parliament, who are concerned about the problem to look at what is proposed and to suggest improvements and so on. I hope that that at least will be done here.

The honourable member for Isaacs (Mr Hamer) earlier in the debate on the estimates for the Parliament referred to the inadequacy of the mechanism for judging the effects of financial expenditure. After all, when we are spending an aggregate sum of about $9,000ni - over $2,000m 0f which goes directly through the Treasury, the Department that is now under consideration - we should know more about it, although by far the major part is the grants that are paid directly by the Treasury to the States. Nevertheless the sums are vast and the existing mechanism is quite inadequate to evaluate the effects of expenditure. As we all know, an actual item that appears in the estimate for any department this year might be merely the continuance of a programme from the year before or the beginning of a programme that may extend over some years. I think that governments in the past have not been game to estimate in advance because they would have to make allowance for this dubious factor of inflation which has been with us but which we always like to keep, like somebody we do not want to be seen in public, behind the scenes. We certainly would have difficulties in estimating forward revenue if we had to admit: 'Well, we are providing for a continuance of inflation of 2i or 3 per cent for the next 5 years'. If it is a fact of life, it is time we recognised the fact of life. I simply put these matters forward as ones that in my view call for early action on the part of this Government. I think this Government is rapidly being written off as a government of inaction in what are highly critical public and private spheres.

Suggest corrections