TAX OFFSETS INCREASE IN MOTORCYCLE PREMIUMS

Transcription

1 CTP Green Paper The Insurance Commission of Western Australia C/0 Commission Secretary GPO Box U1908 Perth WA 6842 CTP GREEN PAPER SUBMISSION BY THE COUNCIL OF MOTORING CLUBS The Council of Motoring Clubs (CMC) is the umbrella body for WA s historic motor vehicle clubs. It includes 111 different clubs (see attached list) with a total membership of about 8,000. Collectively these members own in the order of 8,000 cars and 2,200 motorcycles. Of these about 3,800 cars and 1,100 motorcycles are concessionally registered under Code 404 concession for historic vehicles. The proposal to add no-fault catastrophic injury cover to the existing compulsory third party insurance scheme has raised a number of questions among these clubs. CODE 404 CONCESSIONALLY REGISTERED VEHICLES. The current Code 404 concession for historic vehicles recognises the very low usage and low accident rate of this type of vehicle, and the case has already been accepted for a reduced third party insurance premium for this class. The CMC is seeking assurance that the $109/yr additional premium will not be applied to these vehicles. STAGED INTRODUCTION OF THE PREMIUM INCREASE According to the Green Paper there will be an estimated 44additional claimants under the new scheme. The average cost per person to fund and manage the necessary support will be $4 million over the life of the claimant. Compensation will be paid with regular payments, rather than lump sums and the scheme will not be retrospective. The income from the premium increase will be $223 million in the first year and rising by 4% pa reflecting increases in vehicle numbers. Assuming a life expectancy of 30 years each claimant will receive an average of $133,000 per year. This is a total payment in the first year of $5.85 million against an income of $223 million PO Box 742, Subiaco, Western Australia, 6904

2 Using 2014 dollars for simplicity and allowing for a 4% increase in vehicle and accident numbers, this will rise to $12 million against an income of $232 million in the second year, $18.3 million against $241 million in the third year and so on. In the first three years alone this is a total payout of some $36 million, against a total income of about $700 million. The CMC recognises that it does not have sufficient information or expertise to make an accurate cash flow estimate for the scheme, but it is apparent that this simple example that the Government will be expecting large windfall profits at least in the introductory years of the scheme. The CMC believes that no justification has been presented to warrant an increase in premiums by $109 pa from the introduction of the scheme. The premium increase should start at about $3 to $5/yr to meet the first year s demand, and then increase annually at this rate to match the expected increase in payouts. TAX OFFSETS Currently people catastrophically injured and not covered by the existing third party insurance scheme are to some extent supported by the existing social service providers such as the Disability Services Commission. Will the budgets of these services be reduced to account for the funds provided through the new no fault scheme? Will these savings be passed on to the WA taxpayer through reduced taxes? INCREASE IN MOTORCYCLE PREMIUMS On page 17 of the Green Paper is states that it is proposed that premium rates (for motorcycles) would be set at the same rate as a family car. In discussion, the representatives of the Insurance Commission of WA (ICWA) stated that this only applied to the $109 increase. The CMC is seeking confirmation that premiums for motorcycles will not be raised from the current rate of about $140/yr to the full family car rate of $400/yr. The motorcyclists represented by the CMC do have concerns about the proposed increases in motorcycle premiums, even at $109/yr. The rationale for this increase is the higher injury rate among motorcyclists than car drivers. The Green Paper states that motorcycles comprise 5.6% of total registered vehicles and account for 33% of catastrophically injured claimants. The information provided by the Office of Road Safety however states that motorcyclist make up 14% of vehicle driver s license holders, and motorcycles make up about 6% of licensed vehicles. Crucially, motorcyclists constitute 16% of serious injuries. There appears to be a significant difference between this number, which is in line with the percentage of license holders, and the 33% quoted in the Green Paper. Notwithstanding this apparent discrepancy in the statistics, the CMC agrees that motorcycle death and injury rates in WA are too high, and is concerned that the Government is taking no apparent steps to reduce this accident rate. When a cyclist was killed recently, plans for a summit on bicycle safety was announced. Boating fatalities in WA are in the order of 3 to 4 a year and yet there are whole Departments and volunteer services established and funded to improve and manage boating

3 safety. While these initiatives are supported by the CMC, the Council is very concerned that similar attention and funding is not provided to improve motorcycle safety. In a recent report in the West Australian newspaper, the Minister for Police responded to the reportedly high death and injury rate amongst motorcyclist by announcing that the government was looking into ways to fit front number plates to motorcycles (becoming the only jurisdiction in the world to required front plates on motorcycles). This same response was given by Michelle Roberts a number of years ago when she was Minister for Police. This response to the deaths of 35 to 45 West Australians per year is nothing short of disgraceful. A one week motorcycle awareness campaign that nobody heard of and a booklet from the Department of Transport that nobody has seen do not constitute effective safety strategies. There are a number of motorcycle safety strategies that could be implemented and should be funded, for example: * free rider training, particularly for older riders returning to motorcycling (this is now one of the highest accident rate groups); * media campaigns aimed at educating drivers about motorcycle capacity and limitations; * media campaigns aimed at improving rider skills and awareness of road dangers; * media campaigns highlighting the value of protective clothing and helmets; * removal of state taxations on protective clothing; * recognition that young men, in particular, will continue to take risks and providing both rider training and opportunities to develop rider risk assessment skills; * Modifying road design to account for the different needs of motorcycle. The CMC is of the view that increasing the insurance premium for motorcycles without significant investment in safety strategies does not in any way address the serious problem of motorcycle accidents. Accordingly, the CMC does not support a $109/yr increase in insurance for motorcycles. ALTERNATIVE CONCESSION SCHEMES The CMC negotiated the Code 404 licensing concession scheme for older vehicles with Government, and continues to support this scheme. However, the Council is aware that there are a number of other concession options being promoted by clubs and individuals including third party insurance concessions for vehicles because they are old or the owner has multiple vehicles, permit systems, putting CTP insurance on driver s licences, decreasing premiums as vehicles get older, license fees calculated on mileage and so on.

4 The CMC does see the benefits that these suggestions have for the old vehicle movement, but concedes that none of these proposals have been developed in WA to a stage where they can be seriously debated and at this point the Council has not had the opportunity to consider any of them detail. While the CMC does not necessarily oppose any such schemes, it would not support a proposal that adversely affects the existing Code 404 concession scheme. PREMIUMS FOR OLDER DRIVERS Many of the individual members of the CMC affiliated clubs are elderly and currently enjoy reduced vehicle licensing costs. How will the additional insurance cost be applied to the vehicles of these drivers? FUTURE CHANGES IN CTP INSURANCE. Does the Government intend to expand the no-fault insurance provisions to include all accident claims and if so what will be in increased cost to Western Australian motorists? Peter Boreham Secretary Council Of Motoring Clubs WA

5 Member Clubs of the Council of Motoring Clubs of WA as at August Ford V8 Club of WA inc Indian Motorcycle Club of WA Inc 55/56/57 Chevrolet Club Jaguar Car Club of WA A Series Car Club Jeep Owners Club WA Inc Ace Ford Club Jensen Motor Association of WA Albany Vintage & Classis M/C Club Land Rover Mob (The) Alfa Romeo Owners Club Leyland P76 Owners Club All Ford Club WA Mazda MX-5 Club of WA American Car Club of WA Mercedes Benz Car Club of W.A. Assn of Citroen Enthusiasts MG Car Club of WA Aston Martin Owners Club MG Owners Club Austin Healy Club of W.A. MGTC Owners Club (The) Austin Motor Vehicle Club Mini Car Club of WA Austin Seven Club of WA Mini Owners Club Avon Valley Vintage Vehicle Assoc Model A Restorers Club Bashers Club of WA Monaro Car Club of WA Inc.(The) Batavia Coast Vet. & Classic Morris Car Club of WA Bentley Drivers Club of W.A. Motor Museum of W.A. BMW Club of WA Motoring Historians of WA Bolwell Car Club of Aust. Mustang Owners Club of Aust. British M/C Enthusiasts Club of WA National Corvette Restorers Soc' (WA) Buick Owners Club of W.A. Nickeltown Flounders Inc Bus Preservation Society of W.A. On The Road Again Tours Cadillac LaSalle Club of Aust. Perth Falcons Charger Club of WA Peugeot Car Club of WA Chevrolet Car Club of WA Porsche Club of WA Classic English Ford Club of WA Pre-War Sports Car Club Classic Motorcycle Riders Club WA Quairading Vintage Club Inc ClubMINI (WA) Inc. R&S Series Valient Car Club Cobra Car Club of WA Rambler Car Club. Combined Torana Car Club of WA Riley Motor Club of WA Commodore Car Club of WA Inc Rolls Royce OCA (WA) COMVAS Rover Owners Club WA Inc Corvettes Western Australia Inc Saab Car Club of Australia Daimler & Lanchester Owners Club South West Veteran Car Club Datsun 240Z & 260Z Register of WA Southern District Mini Club DonnyBrook Classic Auto Club Inc Special Interest Vehicle Assoc. Ducati Owners Club of WA Inc Sportscar Builders Club of WA Inc Early American Motorcycle Club Studebaker Car Club Early Falcon Car Club WA Suzuki Four Wheel Drive Club

6 EH Holden Car Club of WA Esperance Mech' Restoration Group Falcon GT Club of WA FB-EK Holden Club of WA FE-FC Holden Car Club of WA Inc Ferrari Register Australia WA Fiat Lancia Car Club of WA Ford Fairlane Club of WA Ford Rallye Sport Club Inc FPV Tickford Owners Club of WA French & Fantastic Automobile Club Inc FX-FJ Holden Club of WA GTR Torana XU1 Historic Commercial Vehicle Club Holden Car Club of WA HSV Owners Club of WA Indian Harley Club (Bunbury) Inc Team W4 TECCWA Toploaders Cruise Club (Inc) Tractor Museum of WA Triumph Car Club of W.A. Triumph Sports Owners Assoc. Vauxhall Owners Club of Aust. Veteran Car Club OF W.A. Vintage Automobile Association Vintage Motor Cycle Club of WA Vintage Sports Car Club Vintage Tractor & Mach (Tracmach) Volkswagen Club of WA WA Historical Cycle Club WA Omnibus Group Inc West Coast Commodores Inc