31 May 2016

2nd Reading Speech

The Hon. ADAM SEARLE ( 18:45 ): I lead for the Opposition in debate on the Emergency Services Levy Insurance Monitor Bill 2016. As Labor members did in the other place, we will propose a number of amendments to this bill. As members are aware, in December 2015 the Government announced that it would seek to introduce an emergency services levy added to council rates to fund fire and emergency services. These services are currently funded through a levy on insurance companies that then include them in premiums. The Government has claimed that by introducing the levy insurance prices will drop. To guarantee insurance companies pass on the price difference in full it is intended that the monitor and the deputy monitor will operate from proclamation of this legislation until 31 December 2018. 

It is perhaps no accident that this price monitoring mechanism is due to cut out just short of the next State election. That is a somewhat cynical if not short-sighted approach by the Government. The Government has not introduced or released any legislative details about the specifics of the new levy. As the shadow Treasurer in the other place indicated, the Labor Opposition remains very sceptical about the emergency services levy that the Government intends to introduce. However, the Emergency Services Levy Insurance Monitor Bill 2016 now before this House is designed for consumer protection should that levy proceed. 

Notwithstanding what sounds like good intentions, the short-term nature of the bill deprives it of much of its potential efficacy. As Labor members did in the lower House, we will put forward a number of amendments to improve the legislation and provide real consumer protection rather than a pale shadow thereof. The first amendment will be to make the emergency services monitor a permanent position and not one that conveniently ends a few months before the next election. We want to ensure that the Emergency Services Levy Insurance Monitor is put in place on a permanent basis. We think everyone in the community should have a high degree of scepticism in relation to the market power of insurance companies and the ability of regular people to navigate that maze when exposed to very high increases in insurance premiums. 

Labor members in the other place have had many representations made to them about severe increases in insurance premiums as a result of fire and flood risk and the like. The fact is that those threats have translated into significant increases in insurance premiums that people pay every year to insure their residences. 

This is a good opportunity to make sure that this bill sends a clear message to insurance companies that no gouging of customers will be permitted. A further amendment would require the Treasurer of the day to report the findings of the monitor to the Parliament within one month of receiving a report. This is about transparency for all members of Parliament who represent communities across New South Wales. Each member should be confident that when the Treasurer of the day receives a report from the monitor or deputy monitor it will be made public and tabled so that all members of Parliament and the wider community are informed. That is why we want to put this safeguard in place.

The Opposition also believes, as was recommended in the 2011 Lambert report, that a full public consultation and education campaign should be conducted before the transition to any levy commences. That report comprehensively looked at a range of challenges within the State’s finances and broader revenue and expenditure regimes. It recommended that public consultation be carried out before the implementation of any change to the levy is conducted. We are concerned that we are starting the process not really knowing where it will end up or with a very clear idea about where we will end up. The Government could have avoided that by coming forward with its levy proposal ahead of this monitoring legislation. 

The Labor Opposition amendments are designed to improve transparency. Indeed, they go a bit further than the bill to make sure that we have a permanent cop on the beat to ensure that insurance premiums are kept at affordable and reasonable levels. We also want to make sure that the Parliament is informed about what is happening in relation to insurance premiums across the State. I am sure that all members of Parliament would appreciate being kept informed, given the impact and cost of insurance premiums on families in our respective communities. Our reforms, which are contained in the amendments currently with the Clerks, will increase protections for consumers. We invite the Government to reconsider its intransigent position of rejecting our amendments out of hand in the other place and to contemplate the sensible and appropriate amendments we advance. The fact that we have constructively engaged with this bill does not indicate support for any future bill to be introduced about the levy. The shadow Treasurer in the other place has indicated, as sensible legislators and responsible alternative government, that we will reserve our opinion until we see the text of any bill. Having said that, if our amendments are not accepted we will not be supporting this bill.