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Thursday, 17 October 1985
Page: 1413

Senator HAINES(3.26) —I had not intended to speak until I heard the comments from Senator Archer and Senator Messner on the Insurance Commissioner's annual report for 1984-85. The points they raised with regard to increasing premiums, the problem of profitability, the problems of fraud and the totally unsatisfactory nature of the compensation payments that we face, both with regard to workers' compensation and accident compensation, are things that need to be taken very seriously and with some urgency in this country.

As Senator Archer pointed out, increasingly large lump sum payments are being given to people, largely because we have a system which is based on tort. Until we get away from that tortious system we will continue to have the sorts of problems that both Senator Messner and Senator Archer raised.

Senator Button —Hear, hear!

Senator HAINES —Thank you for the interjection, Senator. For example, the whole question of pain and suffering is included in the compensation payment. Of course, the longer that one suffers pain-and very often it is not a pretence; it is an actual situation-the bigger one's lump sum payment is likely to be. So there is no encouragement and no incentive for people to take the action necessary to improve things and to rehabilitate themselves. As a consequence they often make their lives afterwards a lot harder because they have not taken action soon enough. Lawyers, of course, do not like the argument that tort should not be involved in these sorts of things because it is a lucrative activity for those in private practice and, as well, the insurance companies have teams of lawyers. I think it is time we looked, for example, at the no-fault accident compensation system which operates in New Zealand, and which allows certain--

Senator Button —The Whitlam Government did but it was destroyed by a coalition of Liberals, lawyers, social workers and insurance companies.

Senator HAINES —Senator Button may well be correct in that assessment. Certainly, last year, when I attended a conference in Canberra on that issue, the lawyers were quite vocal about the need for some element of tort to remain. It should be possible to take into account those various views and come up with a system which is better than the one we have. The one we have must be the worst of all possible worlds. It may be that we should look at the New Zealand system and adapt it to allow a tortious element in certain circumstances. But we must get away from the large lump sum compensation situation that we currently have. It is often quite inappropriate too, when we consider the short life span of some people who receive lump sum payments. In effect, often the only people who benefit from the court decision are the survivors, the relatives of the person who has been given the lump sum. Altogether, it is not satisfactory from the point of view of the insurance companies. It is not really satisfactory from the point of view of the people who suffer the injury or accident. It is not satisfactory really from the point of view of governments, which certainly have to pick up a large part of the cost in some areas. The only people, it seems to me, who benefit at all from it are the lawyers. We ought to disregard their arguments as a pure vested interest. We should look to a system which is going to be effective for the people who suffer the accident or injury and which is not a huge drain on the resources of other parts of society.

Question resolved in the affirmative.