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Thursday, 5 April 2001
Page: 26588


Mr CREAN (2:38 PM) —My question is to the Minister for Financial Services and Regulation. I refer to his continued reliance on an APRA letter dated 2 April on the collapse of HIH. The letter said:

... at no point did APRA argue that the MAA—

the Motor Accidents Authority—

should not appoint an inspector because that would cause a loss of market confidence in HIH.

Wasn't the government made aware last Friday that the New South Wales Motor Accidents Authority had a very different view? APRA advised—and I quote from the MAA's memo:

... they would prefer that the MAA did not make such an appointment as APRA were working with the company and did not wish ... any pre-emptive activity that might cause further loss of market confidence.

Minister, I ask you: in making your explanation to the House yesterday, why didn't you follow up the MAA's claim rather than simply relying on APRA's version?


Mr HOCKEY (Minister for Financial Services and Regulation) —I have not seen the internal memo within the New South Wales Labor government about this matter. I understand that a number of people have, including a number of journalists, and I would appreciate the member for Hotham providing me with a copy of that memo. If he has a copy, could he please provide me with a copy of that memo? The member for Hotham is welcome to table the memo.


Mr Crean —I do not have the memo.


Mr HOCKEY —The member for Hotham is saying that he is quoting from a memo that he has not got; therefore I cannot verify the quote. When the matter in relation to the MAA was first raised with me, I asked the chief executive officer of APRA for advice. The allegations are being made about discussions between APRA and the Motor Accidents Authority in New South Wales, so I was obviously not a party to those discussions.


Mr Crean —Do your job!


Mr SPEAKER —The Deputy Leader of the Opposition is defying the chair.


Mr HOCKEY —The chief executive officer of APRA advised me in writing, advice which I tabled in the House. Just to refresh the memory of the member for Hotham, he advised me:

I confirm APRA's advice to you on that day—

that is, 29 March—

that neither the New South Wales government nor the Motor Accidents Authority in New South Wales, the MAA, advised or instructed APRA that it should appoint an inspector to the HIH Insurance group at any time.

He goes on to say:

For your further information, I have consulted APRA officers who were involved in discussions with the MAA about HIH in late October/early November 2000. Their clear recollection of those discussions is that the MAA advised it was considering its options for the appointment of an inspector to HIH with regards to its motor vehicle compulsory third party business. The APRA officers advised that APRA was working closely with HIH on various questions about its financial position and was not at that time intending to appoint an inspector. APRA officers provided the MAA with APRA's latest assessment of HIH. MAA officers did not suggest that APRA itself should appoint an inspector. At no point did APRA argue that the MAA should not appoint an inspector because that would cause a loss of market confidence in HIH.

The member for Hotham has in his possession a New South Wales Labor government internal memo making allegations about APRA. I have not seen that memo. I can get advice only from the independent regulator that is advising on this matter. The chief executive of the independent regulator has put that in writing, and I have tabled that advice in the House. If that does not satisfy the concerns of the member for Hotham, I would ask him to get a copy of the internal memo of the New South Wales Labor Party and provide me with that information so that I can further explore the matter.

Opposition members interjecting—


Mr SPEAKER —The Deputy Leader of the Opposition! The Treasurer! The member for Makin! Members on my right are denying the member for Wannon the call.