Disability reform provides catalyst for ‘wider change’

ONE of the nation’s biggest insurers has stepped up its calls for privatising billions of dollars in personal insurance schemes.

ONE of the nation’s biggest insurers has stepped up calls for privatising billions of dollars in personal insurance schemes by arguing the rollout of the ­national disability insurance scheme should be a catalyst for further change.

Setting the scene for a showdown with unions, Suncorp is spearheading a push for the privatisation of personal injury schemes underwritten by the government that include workers’ compensation and compulsory third-party.

Opening a new front in the debate, the Queensland giant has declared the reform process for the NDIS and proposed national injury insurance scheme for dealing with catastrophic injuries should be a “key catalyst” for privatising the non-catastrophic personal injury schemes.

The proposed NIIS is supposed to complement the NDIS by relieving a big part of the cost of the scheme. The NIIS is yet to be fully formed, but the government has been working with the states on a federated model of state-based schemes for people who are catastrophically injured, building on existing schemes for motor ­vehicle and workplace accidents.

Suncorp’s executive general manager of statutory portfolio, Chris McHugh, said national disability reform meant governments were looking at their personal injury schemes and changes to dealing with catastrophic injury provided the states with the “perfect opportunity to reform your schemes, carve out the non-catastrophic injury to the private sector”.

The Suncorp Group — which owns providers such as GIO, AAMI and Suncorp Insurance — has told the government’s ­competition policy review that privatising state-owned schemes has the potential to increase ­productivity and generate billions of dollars for the economy.

Personal injury insurance schemes are a mishmash of public and private sector underwriting, with about $10 billion underwritten by the public sector.

For workers’ compensation, NSW, Queensland, Victoria and South Australia have public-­sector underwriting, though some monopoly providers outsource functions such as managing claims and administering policies to the private sector.

The Insurance Council of Australia has backed the privatisation push, a spokesman saying it “benefits governments and the taxpayer by removing huge liabilities from state balance sheets”.

The Australian Council of Trade Unions opposes the push.

“Privatising workers compensation will be a race to the bottom that will see business profits put before the health and safety of Australian workers,” ACTU president Ged Kearney said.

While the insurance sector wants the non-catastrophic schemes privatised, it says government should run the NDIS and NIIS because people who have severe disabling injuries or conditions need a lifetime of care.

Mr McHugh said the reform process was prompting governments to improve cover for catastrophic injuries. “One of the potential key arguments for maintaining their role as an insurer in personal injury was this notion of catastrophic injury and the fact that that’s a core role of government, to look after the welfare of the catastrophically injured,” Mr McHugh said.

But given the reform, “there is no longer any argument for government to maintain a monopoly insurance operation”.