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Wednesday, 9 May 1984
Page: 1812

Senator ARCHER(12.20) —The Opposition will put forward an amendment seeking the deletion of the clause, because it is the opinion of the Opposition that there is no such thing as minimal or insignificant fraud. Fraud is a deliberate act. It does not cover, for instance, the sort of example that the Attorney-General (Senator Gareth Evans) gave. The example he gave is a matter of inadvertence, of somebody making a mistake and claims for something that was not in the house at the time it was destroyed. But the actions of somebody who, in the course of taking out a policy, deliberately, wantonly and knowingly makes a 'mistake' that is to his advantage and to the disadvantage of the insurer, should not be permitted at any stage of the game. I do not think there is any way that we can view fraud, true fraud, as minimal or insignificant. I cannot see how the treatment of people who commit fraud can be taken as being harsh or unfair. I am perfectly happy to admit that the example that the Attorney-General gave is not fraud; it should not be called fraud and it should not be treated as fraud.

Senator Gareth Evans —We are talking about a situation in which it is deliberate , not inadvertent.

Senator ARCHER —If it is deliberate, the penalty should be appropriate. But I do not believe any comfort should be given to people who are involved in a misdescription or a failure to disclose generally. I do not see how we can have a condition where fraud on the one hand can be minimal, insignificant and tolerated and, on the other, it can be criminal. If it is fraud, it is fraud. I see no reason why the insurance industry should be the pace-setter for other classes of business in the community. If we allow minimal fraud in the insurance industry, we will by implication allow minimal fraud in every other business operation in the community. I certainly would not wish to see our creating that sort of precedent.

I urge the Attorney-General to reconsider this amendment, accept the Opposition 's amendment and give us an opportunity to see whether there are cases which can be specifically listed. But the Government should not say: 'Let us have open fraud', so that the insurers then have to cover this in a universal premium rating and method of operation. It does not happen anywhere else that I know of. I do not think it should happen in this regard. One of the major matters in regard to insurance is good will. We cannot have good will if we allow one side of an agreement to incur small or minimal fraud. What opportunity does it give the insurer to indulge in a little fraud? In a contract of indemnity, I cannot see how we can have insurance which is applicable only to one side of the argument. I ask the Attorney-General to tell me what the insurers will be able to do to incur their little bit of fraud to equalise the matter.

The CHAIRMAN —Senator Archer, you would not be in order in moving the amendment you have foreshadowed to delete the clause. You can achieve that result by voting against the clause. No amendment of that nature would be in order.