Buried in the fine print of last week’s
Victorian state budget was the news that the Transport Accident
Commission, Victoria’s compulsory third party insurer, will be paying
even bigger amounts into the state budget – about $1 billion over the
two years to June 2006.
This means the that the Kennett and
Bracks government will have together ripped almost $6 billion out of
the TAC since 1993 when the law was changed so it was no longer illegal
to siphon out money generated from compulsory premiums paid by
Shouldn’t this latest $1 billion raid
actually be passed on to motorists in the form of lower premiums? After
all that’s what happened with Victoria’s WorkCover scheme last week – a
10% cut in premiums for Victoria’s 250,000 employers.
Mackenzie, the chairman of TAC and WorkCover, kindly agreed to discuss
this issue on Jon Faine’s morning program on Friday and he pointed out
how different the two schemes are and that the TAC has a very long tail
because it must pay benefits for life.
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He never really answered
the following question: “When both schemes are travelling so well, why
do employers get a benefit in the form of lower premiums, when the
windfall TAC profits are passed on to the state government?”
reality, it partly reflects the lobbying power of employers – they
would never allow the government to turn WorkCover into a de facto tax
that creates profits for the budget. It seems Victorian motorists need
to get organised and start demanding the government stop taking their
money out of the TAC – $6 billion and counting since 1992.
money in the Transport Accident Commission is not the government’s
money. It is money for the protection of the future interests of people
injured or maimed on our roads”, then opposition Treasury spokesman
Alan Stockdale told Parliament in 1990, before he then changed the law
as Kennett’s treasurer in 1993 and started raiding.
have risen from $267 in 1990 to $339 today, but they are only the
second lowest in the country. However, the benefits are certainly more
comprehensive than elsewhere, which might explain why Victorian
motorists aren’t complaining. Being insured by the Victorian government
through the TAC was certainly better than having HIH look after you as
occurred in NSW and Queensland, something which cost their respective
taxpayers a total of $1 billion.
There are four different ways
the TAC has been milked – a $1.2 billion capital return in 1993, annual
dividends, annual tax equivalent payments and stamp duties which run at
about $120 million a year. None of this applies to employers and
WorkCover. The Kennett government took about $3.5 billion in seven
years from the TAC and now, including the figures in the budget, the
Bracks government will have raided more than $2 billion by the end of
June next year.
The plunging road toll is the biggest factor
that has enabled the $6 billion heist to be pulled off. Deaths on
Victoria’s roads under the Bracks government have been as follows:
20,000 new TAC claims are lodged a year and there are currently about
43,000 people on benefits. As at 30 June last year, the TAC had $6.78
billion in assets and only $5.566 billion, so this represented a tasty
$1.2 billion surplus which is one of the juiciest hollow logs available
to any government in Australia.
TAC premiums usually rise in
line with inflation on 1 July each year but surely the government can
afford to freeze them this year. The TAC’s premium revenue rises by
about $50 million a year and hit $917 million in 2003-04, when it paid
out $617 million to claimants.