Unfair bureaucracy weighing NSW CTP scheme down

21st Jan 2013

Endless and unfair bureaucratic processes foisted on vulnerable accident victims were the biggest factors in the NSW third party insurance scheme’s inefficiency, the Australian Lawyers Alliance said today.

The ALA was responding to comments by Finance Minister, Greg Pearce, in a Daily Telegraph article that he needed to raise scheme premiums by around $50 to prevent insurers from pulling out of the scheme as threatened.

But Australian Lawyers Alliance NSW President, Jnana Gumbert, said the NSW scheme was actually still very affordable and any erosion of viability in the scheme could be attributed to bureaucratic processes such as the ‘medical assessment service’ which was not only time consuming, costly and inefficient, but often meted out unfair determinations on victims.

“Our scheme is still very inexpensive. To quote from the latest Motor Accidents Authority Annual Report: ‘The weighted average best price has dropped from 50 per cent of one week's average weekly earnings in 1999, to 33 per cent as at June 2012, and this has remained stable over the last twelve months, indicating that the recent price increases across the market have been broadly in line with wage growth’," Ms Gumbert restated.

She said the reason our CTP scheme was relatively more expensive than other states was because the former government kept adding extras that other states did not provide.

These included: lifetime care and support for catastrophically injured people, no-fault benefits for children, "blameless" accident coverage, up to $5,000 payments for all accident victims regardless of fault, and refunding of the public hospital system for treatment of motor accident injuries.

Ms Gumbert said the Australian Lawyers Alliance had been campaigning for more than 10 years to abolish unnecessary scheme bureaucracy, yet this seemed to have fallen on deaf ears.

“In 2005, the Legislative Council General Purpose Standing Committee No. 1 unanimously recommended that the Medical Assessment Service be abolished. Now nearly eight years later, there has been no action in this regard,” Ms Gumbert said.

“The cases referred to in The Daily Telegraph are not indicative of most situations and it is disingenuous of the government to suggest that they are. Most resolve within a much shorter space of time with the lion's share of compensation going to the injured person,” she said.

Ms Gumbert said if the government was serious about trying to improve the scheme, reduce delay, and reduce administrative and legal costs, it should listen to what stakeholders and the Standing Committee have been saying for years - that the best, fairest way to reduce cost is to prune unnecessary bureaucratic obstructions.

“Hopefully, this time around, the government will properly engage with stakeholders before attempting to modify this scheme. We don’t want another debacle like last year when workers compensation legislation changes reduced and removed the rights of thousands of injured workers.

"The ALA has always been, and remains, very willing to assist the government with trying to improve the motor accidents scheme in a way that will ensure that costs are kept down and injured people are no worse off than they currently are,” Ms Gumbert said.

Tags: NSW Transport accidents CTP