Shadow Treasurer Rob Lucas said today evidence from a former Chairman of the Motor Accident Commission (MAC) Roger Cook had confirmed motorists were paying $30 more in CTP premiums as a result of the Government’s decision to privatise MAC.
Mr.Cook told the Statutory Authorities Review Committee that documents existed in Treasury from MAC officers confirming that CTP premiums should have been reduced by $23 this year rather than the Government’s decision to increase them by $7.
The Weatherill Government made the decision in December 2014 to amend MAC’s Charter forcing a reduction of MAC’s rate of return from 6% to 4.25%. The Government was told if MAC was allowed to continue to earn 6% on its investments then the Third Party Premiums Committee would have had to recommend a $23 cut in premiums. Because the Government forced the change on MAC this resulted in the Third Party Premiums Committee having to recommend the $7 increase in premiums.
When asked why the Government had made this decision Mr.Cook suggested one explanation might be a ‘Machiavellian’ attempt to increase the CTP cost.
Clearly the privatisation prospects would be improved by the level of CTP premiums being set $30 higher than they should be set at.
This is especially so as the Government wants to say only ‘CPI like’ increases will be allowed for the first three years under the privatization proposal.
Mr.Cook confirmed the MAC Board opposed the privatisation proposal and had offered an alternative of a one off payment of between $1b and $1.2b to the Government and annual payments of between $75m and $150m to the Government.
In other evidence Mr.Cook stated:
• the Government would receive up to $2b from the MAC privatization not the original estimate of $500m;
• he and some members of the Board considered resigning until they received Govt/Crown Law assurances about their legal position; and,
• Treasury officers had been directing MAC officers in relation to some specific investments this year.
“It is clear that motorists are being forced to pay higher CTP premiums to help the Weatherill Government to ‘fatten the MAC calf for sale’!” said Shadow Treasurer Rob Lucas.