(Continued from 4 April 2019.) Second Reading
I thank the member for his indication that the opposition will be supporting the bill and that it will not be necessary, as per his advice, for there to be any committee. On that basis, I indicate that the government will not be proposing any amendment and that therefore we will not seek to go into committee either.
There was one matter that was again raised by the opposition in this house, and it had been traversed in the other place during the debate of first instance on this bill, that is, the basis upon which there had been opposition to their opposition's proposal for an inducement model to be incorporated in regulations. It was presented to the other place as a measure that would add to the transparency of the model being proposed.
Again today we hear from the member, the speaker for the opposition, of their disquiet at the rejection of that in the other place. I put this to the house as some assurance: in other privately underwritten CTP schemes—in New South Wales, Queensland and the ACT—the types of inducements are not prescribed in law. The bill being presented by the government adds an additional requirement of controlling inducements by requiring the minister to approve the class or type of inducement allowed to be offered by the CTP insurers. This additional protection for the motoring community does not appear in other jurisdictions.
The minister-approved class of inducements will be publicly available on the CTP regulator's website. That was noted in the contribution from the opposition to be an indication by Ms Kim Birch, the regulator—who is present here today—and I am puzzled at the suggestion by the member that in some way this suggests there might be some failing on behalf of the regulator to do just that.
The imputation by the member in respect of the benefit of this disclosure on the website, or indeed the bona fides of the CTP regulator to both assume that responsibility and undertake the indication she has made, is, I think, quite disturbing. Nevertheless, as has been identified, this is a measure in the bill which does not apply even in other jurisdictions and which is an extra protection for consumers, in particular the motoring community.
Prescribing in regulation would remove the intended flexibility and is inconsistent with the intention of how a privately underwritten competitive scheme would operate. Direct policy holder inducements offered by one or some of the CTP insurers will be a lever used to win and hold market share and should be able to be released to market as soon as possible. The model outlined in this bill will enable the minister to approve within days any new class of inducement that becomes available. It also enables responsiveness to withdraw approval by the minister, should it become apparent that the inducement is not appropriate.
Examples of class of inducements are discounts off other insurance products, reward programs, gift cards, roadside services and crash and injury reduction products. The regulator, who, as I have indicated, is present here today, will be responsible to monitor the types of inducements being offered by insurers and to notify all insurers written into insurer contracts of changes to all classes of inducement.
I commend the honourable Treasurer of the government in another place for the presentation of this bill to ensure that there is an additional requirement in the model for controlling of inducements, and I also thank the CTP Insurance Regulator for both her current role and anticipated further responsibility in this important area.
I would hope that members would therefore appreciate the significance of the benefits of this legislation, the reason for it and the additional basis, relative to other jurisdictions, upon which it is offered. I am also mindful that there have been some considerable findings in the recent national royal commission and the highlighting in that commission of misconduct in the banking/superannuation/financial services industry surrounding the issue of commissions and inducements that impact on customer outcomes.
Recommendation 4.4 of that royal commission's final report proposed that there should be a cap on the amount of commissions that may be paid to vehicle dealers in relation to sale or add-on insurance products, and that is something of which this government is mindful. It may be that other jurisdictions that currently have these models, when they review the royal commission reports in detail, may make some advance in this area as well, but we have had the benefit of the opportunity to review the commission's recommendations before this bill was presented to the house.
A final point I would like to place on the record relates to the time frame and the significance of the timeliness of this legislation. The previous government some years ago now introduced the proposal to privatise compulsory third-party insurance in this state. That is a matter they determined back in 2015 in announcing a market-based model for the private sector to provide compulsory third party, and they set a number of parameters.
The first thing they did was enter into the whole process by contract. That came under severe criticism, both publicly and from our side of politics, because we felt that it was important, as happened in other jurisdictions, that this sale, the privatisation of this product, should be within the parameters of a statute, not a secret contract. As we know, the repeated conduct of the previous government, a standard they set themselves, was to enter into contracts, whether for the sale and privatisation of the lands titles services or other such—
Mr Cregan: Gillman.
The Hon. V.A. CHAPMAN: Yes, well, let's not even start on Gillman; that could really keep me here for days. It was a standard they set themselves, which, frankly, is a standard or threshold with which we do not agree. We take the view that, in respect of this whole exercise, it should have been under statute and it should have been something this parliament could scrutinise. However, having not done that and having announced that some years ago, whilst there was the establishment of the insurance regulator as an independent statutory authority—which we welcome, and I commend the regulator for her work to date and her continued commitment to this role—it is a model which was born within a contract.
Whilst this government embraces the establishment of the regulator and their obligations, we very clearly feel that it is important to add the extra protection in this legislation. The time frame we were given to deal with this was set by the former government. They are the ones who set 1 July 2019 as the commencement date for the new regime. So, please, spare us the suggestion in this parliament today that in some way the delay or obligation to deal with this matter expeditiously is the fault of the Treasurer or the government. The former government set the time frame for this.
The process was identified and taken through cabinet, which, as the member well knows, is the proper process. It was brought to the attention of the house in adequate time, complying with the rules in the other place, and earlier this month it was introduced to this place and available for consultation, briefings and debate in the parliament. It is fair to say that the opposition indicated, and maintain today, their support for the legislation. We welcome that, but please do not come in here with crocodile tears about being expected to in some way expeditiously deal with this matter as we are approaching 1 July 2019, given that the parameters of the implementation of this policy was set by the former government. With those words, I endorse the passage of the bill.