The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC

Treasurer

Speeches

MOTOR VEHICLE ACCIDENTS (LIFETIME SUPPORT SCHEME) BILL

Wednesday, 1 May 2013

The Hon. R.I. LUCAS (16:25): I rise on behalf of Liberal members to express support for the second reading of the legislation. As some members will be aware, the member for Davenport has carriage of this particular bill for the Liberal Party, and his most comprehensive contribution to the second reading was made on 19 March this year. Members will be delighted that I do not intend to repeat all the detail of his contribution, but I will just address some key aspects that remain unresolved and key aspects of the Liberal Party's position on the legislation.

This legislation reforms the compulsory third-party scheme, which currently operates under the Motor Accident Commission. It sets up a lifetime care authority for those people who are catastrophically injured in motor vehicle accidents, as defined under the Motor Vehicles Act, and, as the member for Davenport indicated, it is our understanding that it meets some of the requirements from the federal Labor government in relation to the conditions for the National Disability Insurance Scheme.

As the member for Davenport outlined, the agreement the federal Labor government has with the state Labor government is that South Australia has been nominated as a trial site for the national disability scheme and that part of the COAG agreement, in relation to the setting up of the trial sites for the national disability scheme, was that the states had to have in place a process to deal with the catastrophically injured under the motor vehicle accident scheme and that, if they did not, there would be a significant financial penalty for the states. I think somewhere else in the contribution he may refer to a figure of $20 million a year, but I will stand corrected on what that penalty was.

The position the member for Davenport outlined was that the states had agreed to a process whereby they had to introduce this legislation along these lines if they were going to continue to have the costs for the trial site for the national disability scheme met by the federal government, as opposed to being a cost to be met by the state government.

The legislation sets up a new entity, a lifetime care entity, and the actuarial advice in part that has been provided to the government is that for a cost of approximately $105 a year the government claims that it will fully fund the scheme. I pick up on that issue because the Hon. Mr Brokenshire has addressed some brief comments to it, and I want to, as well.

I think it is fraught with danger that we accept the position the government has outlined in relation to the claim that this is a fully funded scheme. As the Hon. Mr Brokenshire has rightly commented, the dilemma for non-government members is that we do not have access to alternative information in relation to the claims being made by the government. We obviously do not have our own actuaries we can consult to provide either alternative or independent costing of the scheme.

The cynics amongst us and in the South Australian community would have a fair degree of evidence to back their cynicism that one should not just accept the claims made by this government in particular in relation to either the funding of their budget requirements or the funding of scheme arrangements, such as WorkCover. We see significant debt and deficit in the state's finances, we see a $1.4 billion unfunded liability in relation to WorkCover, and the government uses its eerily familiar claims in relation to WorkCover and this particular scheme. It says that it is the government's policy to fully fund WorkCover, but as we know through its own financial mismanagement over more than a decade, it has run up an unfunded liability of $1.4 billion, and the concern many of us will have is that, as well intentioned as is this scheme, the parliament is being asked to accept the claims being made by a government which has no record of competence in terms of financial management on any front.

As the Hon. Mr Brokenshire has indicated, to accept the claims by the government that the particular levy or levies that are proposed will fully fund the scheme, I have to go on the record as well and say that I certainly am cynical about the claims being made by the government and am in a similar position, I guess, to the Hon. Mr Brokenshire in indicating that the responsibility for the structure, the administration and the funding of the scheme at this stage is wholly in the hands of the government and its advisers, because they are the only ones who have access to the detailed information to make these sorts of judgment calls.

The problem of course is that this government is anxious to do politically palatable things prior to March of next year, as the federal government has been seeking to do politically palatable things prior to September of this year, and both governments are unconcerned about the long-term financial implications of the decisions they are taking. On the one hand they say, 'Well, if we are fortunate to be re-elected, then we'll address the financial problems at that particular stage, but if we are not going to be elected, too bad, it is going to be the problem of an incoming Liberal government federally or an incoming Liberal government on a state basis to sort out the mess that we suspect we will leave to them.' This would just add to the financial mess if they have not been honest with us in terms of the financial viability of the scheme under the proposed current arrangements.

The situation may well be, in relation to the funding of these schemes, that you can fully fund the scheme, but you will just have to increase the premium or levy rate. Again, that will be an issue where the government will say that if it is re-elected it will address it, but if it is not re-elected that will be an issue that an incoming government will have to address when there are potentially very significant increases in levy rates to fully fund the scheme.

We all would wish to do wonderful things right across all portfolio areas, and there is no doubting that the NDIS and the management of catastrophic injuries are laudable goals and targets, but ultimately someone has to pay for all of them. We can only hope that, in terms of the financial projections that this government has undertaken for this particular scheme, they are more accurate and more competent than their financial performance in virtually every other area of financial management of the state.

The member for Davenport went on in his contribution to talk about the number of individuals who potentially might be covered by the scheme. He has used figures of potentially 20 to 30, based on advice from the government. He has talked about the 20 or so persons who suffer catastrophic injuries in incidents that will not be covered by the NDIS, WorkCover or medical insurance arrangements. I certainly seek, having looked at the debate in the House of Assembly from the government, some sort of clarification from the government as to their understanding of the arrangements in the future for persons who are injured in those general circumstances, such as falling off a horse, a skateboard or something like that and being catastrophically injured and not being covered.

Towards the end of the member for Davenport's contribution he does indicate that his understanding is that, at some stage in the future, the NDIS will cover persons catastrophically injured through examples such as the falling off a horse example and that at that stage, if the states do not have an alternative scheme to cover those particular individuals, then the state will be responsible for the costs within the NDIS of covering those 20 or so individuals.

The member for Davenport hastened to say in his contribution that he too was seeking clarification and, having looked at the debate, I would like a clarification from the government as to what their understanding is of the current agreements that they have with the commonwealth in terms of the future handling of individuals who are catastrophically injured through circumstances such as falling off a horse.

One other aspect of this scheme I wanted to take up was this issue of the establishment of a second lifetime care authority. In essence, as we understand it, we are going to have the Motor Accident Commission, which will continue in an altered fashion obviously as a result of this legislation, with its separate board and separate staff and will report either to the Treasurer or, currently, the Minister for Finance. As I understand it, and I stand to be corrected, this new lifetime care authority will again be a separate individual board and I seek some guidance from the government as to the size of the board, any board fees that might be paid to the board and the staffing arrangements.

It will have its own separate staffing arrangements from the MAC and will also report to a different minister, but I seek guidance from the minister as to whether that is correct or not. Does the lifetime care authority report to a different minister? If it does, one of the concerns that has been raised with me is that, in essence, what we are going to have are two parallel and separate structures—two separate boards, two separate staff reporting to two separate ministers—which raises the issue of the potential for both demarcation issues and differing interpretation issues in relation to how that is managed.

I am interested to know what the experience is in other states. The minister for Davenport referred to the fact that our system is modelled on the New South Wales system; that is two separate authorities. Can I ask the minister whether that is still the case and whether there has been any suggestion in New South Wales that, because of any demarcation problems, New South Wales might be looking at merging the two authorities? Secondly, can the minister advise what are the circumstances in the other states?

I am told that in some other states there have been concerns about having the two authorities and, as a result of that, the MAC equivalent in those states has been given the responsibility for managing the total scheme; that is, in some other jurisdictions they have decided not to proceed with a second board and a separate second set of staff reporting to different ministers. I seek from the minister, prior to our proceeding to the committee stages, some detail on the structure arrangements.

Can I also ask the minister: has the government has received any concerns from any of the stakeholders in relation to the two separate bodies? In particular, I ask: what is MAC's current position in relation to this notion of two separate bodies? Has MAC put a view to the government that it makes no sense to have two separate authorities, with the increased costs of two separate authorities, and that the model ought to be one body and one set of staff that manages the scheme? If MAC has put that view to the government, can the minister indicate why the government has rejected the expert advice of MAC, if it was given, in relation to this particular issue?

It is my understanding that the impetus for this legislation started with MAC. Two or three years ago, they initiated the discussions, based on concerns about legal costs exploding and premiums rising at a significant rate, and it was on their initiative that this general issue was first raised. The government, after a period of time of consideration and consultation, decided to proceed with a version of the legislation. I am interested to know what MAC's view is on the two separate bodies, the two separate sets of staff and, potentially, two separate ministers, and what problems MAC might envisage in relation to that sort of structure.

As members are aware, the government, having introduced its proposed scheme, engaged in a period of confidential discussion or negotiation with a number of legal groups in South Australia after which a number of significant changes were made to the government's proposed scheme. My first questions to the minister are these. After the government negotiated the deal with the legal groups such as the Law Society and the Lawyers Alliance (or whatever it is called), etc., they, as we understand it, withdrew their opposition to the bill.

After that deal was negotiated, I asked the minister whether MAC expressed concern to the government in relation to the deal that had just been done with the legal groups in South Australia. If MAC did express concern to the government about the deal, can the minister indicate what was the nature of the concerns that MAC raised with the government about the deal that had been done with the legal groups in South Australia? In particular, did they express any concerns about the impact of the deal that had been done on claims that the government was making in relation to the financial viability of the scheme and claims the government was making about the level of legal costs under the government scheme, or about claims the government was making about the level of premiums that would sustain the funding of the scheme?

I am interested to know, given that MAC is the repository of expert advice to the government on this particular scheme. They have had many years of experience in terms of managing the scheme. As the Hon. Mr Brokenshire said, and I reflect that view, we in the parliament have to listen to what the government claims in relation to this, but I believe that we are entitled to know what the expert advisers to the government—an independent board such as MAC and its staff—have said in relation to the deal the government has done with the legal groups in South Australia.

If the experts within MAC have expressed concerns about that deal, have raised concerns with ministers or the Premier, for example, or senior departmental officers or Treasury officers in relation to the scheme, surely this chamber (the Legislative Council) and the parliament are entitled to know what the experts' concerns are. It is certainly the prerogative of the government to indicate why they believed they should ignore the advice and why we should ignore the advice of the experts in relation to this particular area. Of course, if MAC has not expressed any concerns, then everything is hunky-dory in relation to that particular aspect of the scheme and we will not need to unduly delay that particular aspect of the committee stage of the debate.

So that we give the government and the minister plenty of warning, I want to indicate at the second reading that we see MAC's current position on the deal the government has done as being crucial to a proper understanding of the implications of the scheme. Therefore, we want to give the minister fair warning that we would like to see a comprehensive reply at the second reading and then some opportunity between the reply at the second reading and the committee stage of the debate to consult further with stakeholders to more properly inform members of this chamber in relation to potential amendments that are to be moved.

I think that could be assisted if, given that this is the first day that we have had the opportunity to debate the second reading of this bill, the minister's advisers were able to provide written responses to members sometime tomorrow. Certainly, that would then enable at least some hurried consultation overnight before commencing some committee debate on Thursday of this week. That really is, I think, a very fair invitation to the government and their advisers to assist members in this chamber in relation to the debate. If they want to proceed expeditiously with the consideration of the bill, then, to do so, early responses to the questions that members raise today would certainly, I think, assist the committee stage. Otherwise, as I said, if a response is read at the start of the committee stage and then the government wishes to proceed with the committee stage, it provides no opportunity for the consideration of the government's response or, indeed, any consultation with stakeholders in relation to that.

In relation to this deal that has been dudded—and as I said, I have raised questions about MAC—I have to say that whilst enjoying, as I do, time at the local football, at a South Australian National Football League football game recently I was approached by a senior member of the legal fraternity who had some close interest in this particular legislation and the deal that had been done with the government. This particular member of the legal fraternity said to me in most un-legal terms that he had—and I will not use the terms he used but I will paraphrase it—grave concerns that they had been dudded by the government in relation to the deal.

When I asked—in between watching the football—'Prey tell, what exactly do you mean by being "dudded by this government"? I can't imagine that this government would dud lawyers such as yourself.' He said that the deal that had been done with the government on this had been based on certain assurances in the legislation, but their concern was specifically in relation to the schedules and the regulations that they had only just seen a draft of and that the assurances that they had been given in the legislation were subverted or significantly amended by the schedules and the—perhaps let me put it this way—regulations that they had seen, and they were outraged at some of the provisions in the regulations which they believed were contrary to the terms of the deal that they had done with the government. I said to my lawyer friend, 'Well, get in a long line of people who think they have been dudded by this government and its ministers'—

The Hon. K.J. Maher: Who won the footy?

The Hon. R.I. LUCAS: Westies won. It was a very good win. I am delighted that you asked the question. I said, 'Get in line. There's a long list of people who have been dudded and believe that they have been dudded by this government on a whole range of issues. If you are concerned then clearly you need to raise those concerns with the government, but at some stage you are going to need to raise those concerns publicly.'

One of my colleagues tells me that there are ongoing negotiations between representatives of the legal fraternity and the government about this particular issue as we speak. I think that is intriguing, because we are being asked to process this bill, as I am told, before the end of the week. I am sure that if it is not done by the end of the week, the ministers will be jumping up and down and saying, 'This is an outrage. We gave the Legislative Council three sitting days to process this bill and it hasn't been processed.' Yet I am being told that negotiations are still going on in relation to key aspects of the bill from the legal fraternity's viewpoint relating to a deal which they believe they did with the government which meant that they were silenced; that is, they withdrew their public opposition to the bill and indicated that the bill could proceed with their support.

I think there are some significant concerns from both ends of the argument, if I can put it that way. I have raised questions in relation to any concerns that MAC may have expressed and, clearly, there are some members of the legal fraternity who believe this government has dudded them, or is in the process of dudding them, in the deal through specific provisions in the draft regulations—which, evidently, they have seen.

The other aspect which the member for Davenport outlined, and which I need to outline at this stage, was in an amendment he moved on behalf of the Liberal Party in the House of Assembly which, unsurprisingly, was defeated by the government. I will move the same amendment during the committee stage of this legislation. The member for Davenport outlined the simple rationale for it in his second reading contribution. He said:

The opposition is going to support this legislation, but we are also going to move amendments to bring forward the catastrophic care component so that it starts on 1 October this year. We accept the government's argument that the catastrophic care scheme needs to be improved. We accept the government's argument that there are 20 to 40 people a year who fall through the cracks and are catastrophically injured in motor vehicle accidents that would be better served under this lifetime care model.

We accept that argument, but we see no reason at all why those catastrophically injured should not have this scheme as early as possible. We see no reason to delay the scheme. The government is setting up an independent commission against corruption within six months. We see no reason why they cannot set up this authority within six months. They have been over to New South Wales numerous times. It is essentially a photocopy of the New South Wales model. They have extensively negotiated with New South Wales about a whole range of procedures and how this works. It is not that difficult to set up this authority.

The Liberal Party will be moving an amendment that the Lifetime Care Authority, the catastrophic care component, is brought forward nine months to 1 October 2013 so that the care that is going to be given to the catastrophically injured under this particular provision is brought in as early as possible. Our amendment actually says that it be no later than 1 October, which means if the government can get it ready earlier, then let's bring it on earlier.

Further on in his contribution the member for Davenport says:

The opposition knows exactly what catastrophic care we are talking about in relation to the faults with the CTP scheme and that is why we are genuine and sincere in bringing forward the date for the operation of this scheme; there is simply no argument as to why the scheme should wait until 1 July 2014. Why should another 10, 15 or 20 people fall through the cracks when we all know that if the government really wants to it could have this scheme running a lot earlier than 1 July 2014?

The member for Davenport is putting a pretty simple point; that is, in essence, the government wants—for whatever reason, and I invite the minister to try to explain why—to have two separate starting points. The government wants, this year, to be able to make adjustments to the CTP premiums from 1 July 2013. Cynics in the parliament may well think that has something to do with the fact that the government has an election coming up in March 2014—

The Hon. A. Bressington interjecting:

The Hon. R.I. LUCAS: The Hon. Ann Bressington says no. There are cynics in this chamber, I am sure—and I would probably count myself as one of those—but the government probably thinks that, as a result of 11 years of financial mismanagement, the people of South Australia are concerned about that financial mismanagement and its impact on their cost of living, so the government is desperate to see that aspect of the scheme start prior to the election. However, it is quite comfortable for the real purpose of this scheme, which is to assist the catastrophically injured, to be left until after the election, until 1 July.

The government wants the bill jammed through this week because it wants to be able to make the adjustments to the premiums for 1 July this year so that it can send out a note saying, 'What good people we are in relation to CTP premiums,' pre the election. They are desperate to do all that very quickly this week, and they will jump up and down if it does not happen this week. But, as for the purpose of the scheme, which is to assist the catastrophically injured, they are quite comfortable about putting that off to 1 July next year, until after the election.

The government is not even interested in talking about an amendment that the member for Davenport has floated. They did not even come back and say, 'Hey, if you gave us another two months to 1 December, we think we could get it up by then, or by 1 January.' They were not even interested in talking about whether they might introduce the scheme earlier than 1 July next year; they are not worried about that.

As the member for Davenport points out, if you accept the government's position, another 10, 15, or 20 people will be catastrophically injured between now and 1 July next year. But, that is not the major issue for this government. They do not want to look at an amendment from the member for Davenport or from the Liberal Party that might bring forward the operation of this scheme that everyone is supporting.

That might actually put a cattle prod up the backside of some bureaucrats to say, 'Hey, if you can get an ICAC up and going in six months, surely to goodness you can get a lifetime care authority up and going in six months.' So, why not put a cattle prod up the backside of a couple of bureaucrats, ministerial advisers and maybe a couple of ministers as well, and get the thing up and going earlier, rather than leaving it until 1 July and after the state election?

I am disappointed that the members of the Labor caucus would so willingly be party to such a blatant politicisation of the exercise. Why not genuinely look at the amendment from the member for Davenport—the amendment that I will move in this chamber—and bring forward the date of the operation of the scheme?

I am sure the minor parties and Independents are going to be belted by the government, its advisers and bureaucrats saying, 'Woe is we; this is impossible, we can't do it, it's all too hard, it is administratively difficult. Some of us might actually have to work after 5 o'clock on an afternoon. Some of us might actually have to work over a weekend. Some of us ministers might have to stop politicking and actually do something in relation to implementing a policy reform. This is all too hard. Please, Independents and minor parties, don't impose this awful load on us in relation to the operating date of the scheme.'

I can see it now—I can hear the line that the government will be running in relation to that. I will certainly be arguing passionately in the committee stage for this particular amendment. From our viewpoint, as I said, even if the government came back to us or the Independents and said, 'Hey, give us another month or two months,' or whatever it is—surely to goodness, we should be able to get this scheme up and operating much, much earlier than the projected 1 July 2014.

I could raise a number of other issues, but I will leave those to the detailed debate during the committee stage. I note that the government has tabled three or four pages of amendments, the Hon. Tammy Franks has tabled three pages of amendments, and I have tabled half a page of amendments, so we are going to have a considerable debate in committee. We will reserve our consideration of other members' amendments until we have heard their explanations during the committee stage and will indicate our position in relation to those amendments during that stage.
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