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Thursday, 17 December 1992
Page: 5312

Senator PANIZZA (12.31 p.m.) —I thank the Minister for that assurance. I seek leave to move both amendments and deal with them together.

  Leave granted.

Senator PANIZZA —I move:

1.Clause 97, page 63, subclause (1), line 33, omit "exceeds $1,000,000", substitute "is prescribed".

2.Clause 97, page 63, after subclause (1), insert the following subclause:

"(1A) Before an amount is prescribed in accordance with this section, the Minister must consult with the Fund, the Australian National Maritime Association and the Australian Minerals and Metals Association as to the amount.".

The reason for moving that we take out the figure of $1m and insert a prescribed figure is as I stated in my speech at the second reading stage. I believe that $1m is not so great an amount for this sort of industry with the combination of various people and companies. I will give honourable senators an example of a catastrophe event. Let us say trainees are being taken to a training session. Suppose a coach carrying the trainees is involved in a serious collision and there are five dead and 10 totally incapacitated. The lump sum payout would be approximately 5 times $250,000 under common law, to the dependents of the dead; plus 10 times $100,000 under section 39(9) to the injured. A total lump sum of $2.25m spread over 2,000 berths in the industry at large is $1,012 per berth.

  Compared with the total wage-salary bill of around $120,000 per berth, the risk of the industry being unable to meet such an immediate call to meet the liability is negligible. Of course, if there is a case of ongoing weekly payouts it would be much less per berth per year and the industry may well decide it could bear the immediate risk of lump sum pay-outs of around $2m but insure any excess. That, however, would be the commercial decision of the industry.

  That is the reason we have moved these two amendments, and I thank the Australian Democrats for their intended support. The union representative told us at the inquiry that, after all, insuring in excess of $1m is cheap. But that may not be the case in five years time. I believe that if an industry can carry its own risk by its own cash reserves then it should not be forced into insurance in the lower figures.

  By having a prescribed figure, which is covered in the amendments and added to in the second amendment, the Minister can, with consultation, move it either upwards or downwards. If the Minister or a particular government thinks that taking a risk of a million dollars is too high, in consultation they can bring the amount down. Of course, they would be doing so, as it says in the amendment, in consultation with the fund, the Australian National Maritime Association and the Australian Minerals and Metals Association. That is the reason that we have moved those amendments.