Third-Party Insurance Reform

The Road Transport (Third-Party Insurance) Amendment Bill 2011 (the CTP Bill) has two main objectives:

·               better health outcomes for those injured in road crashes; and

·               reduced cost to the community of CTP premiums.

The changes proposed to awards for non‑economic losses are designed to meet those objectives by encouraging those suffering relatively minor injuries to seek early treatment and rehabilitation.

The Bill builds on the previous reforms established under the 2008 CTP Act to encourage early treatment and provide more rigour around award payments.

There is overwhelming evidence that early access to treatment after accidents improves health outcomes, with quicker recovery.

Quality of life is improved, and it is improved more quickly – I think we can all agree this is a worthy outcome.

Early treatment benefits individuals and the community, through lower medical costs and increased productivity.

These are highly desirable policy objectives in their own right. 

And motorists will benefit though reduced insurance costs.

The current system unfortunately provides incentives towards maximizing lump sum payments and away from rehabilitation.

At its most basic, the current scheme trades money for quality of life –the Government wants this to change.

Injured Canberrans deserve better than a system that prolongs their waiting.

They deserve a system that emphasizes the rehabilitation and restored quality of life, and appropriate compensation.

And ACT households and businesses deserve better than a system that practically guarantees the highest insurance premiums in the country.  They deserve relief from these cost pressures. 

Thoughts on the 2011 Tax Forum

Federal Treasurer Wayne Swan told the Parliament last month “the Tax Forum provides the perfect opportunity for state governments to take responsibility for the taxes they impose, engage with ideas for reform, and build momentum for their reform efforts.”

I agree that the forum provides an opportunity to continue the ACT Labor Government’s reform agenda.  Reform is never really “finished” anyway and tax-reform, in particular, is an ongoing process. In my experience, delaying reform only makes the task harder in the long run.  So we plan to continue a sensible and measured reform agenda.

We know the challenges we face. The Intergenerational Report projects that health spending will more than double by mid century, hitting 7 per cent of GDP, up from less than 3 per cent in 2001.  Age pensions will rise from 2 per cent to 3.5 per cent of GDP.  The report also notes that school spending is rising at a rate of 6 per cent a year.

We have heard the warnings at weekend from the Business Council of Australia that without an overhaul to taxation, the nation faces a $70bn fiscal black hole.

The ACT is certainly not immune to these challenges.  So what is to be done?  And who should do the heavy lifting? 

In my view, the states and territories do have a role to play in improving the efficiency of Australia’s tax system.  However, any wholesale abolition of state and territory taxes will have to be funded from alternative revenue sources.

To scrap existing taxes quickly, the states and territories would need access to extra revenue from the commonwealth. Short of that, any tax reform will have to be incremental and undertaken as there is budget capacity.   This is not all bad though, as the Henry tax review said, "it is neither possible nor desirable to make all of these changes too quickly."

The ACT Government will examine any sensible reform proposals that are put forward at the forum and would particularly support proposals that:

• address the mismatch between the territory’s revenue and spending responsibilities;
• increase control of our revenue base; and
• increase budget certainty.

For example, the Government could examine proposals to broaden our land and payroll tax base to fund cuts to other more volatile territory taxes.

The Government is interested in a sensible debate about how to raise tax as a share of GDP to meet the intergenerational report challenges. Sooner or later it will have to happen, so we may as well start thinking about the most efficient way to do it.

One way or another, our budgets have to be put on a more sustainable footing.

High Speed Rail – Canberra’s ‘intellectual silk road’

The idea of an east coast high-speed rail link has been around a while. The first serious Very Fast Train (VFT) study was conducted in the late 1980s by a BHP-led consortium that investigated a possible Sydney-Canberra-Melbourne network.   Following this, the ACT was a participant in the very high-speed train study in the late 1990s - looking at the Speedrail proposal between Canberra and Sydney. 

The ACT Government was then, and remains, a strong supporter of the proposal. 

In fact we were the only jurisdiction to list high-speed rail as a priority for consideration by Infrastructure Australia in 2008.  We are heartened that the project has now been brought forward by the federal government. 

I don’t think anyone underestimates the magnitude of the project though.  At a current estimated price tag of over $100 billion this is obvious.  I don’t think anyone is under any illusion that this proposal will happen overnight.

It is, by any measure, a massive project.

It will have far-reaching economic impacts – not dissimilar from those of the snowy scheme or the National Broadband Network (NBN).

Importantly – this project – this time – is not being examined in a flurry of promises.

In fact what the federal government has sensibly done is to recognise it’s a project requiring long-term thinking and a number of steps if it is to become a reality.

And the first step is to examine, choose and preserve the route.

That is the process we’re in now.  This recognises that a project like this requires forward planning so that when the time comes – the track can be laid. 

This is a project of national significance.

Rail is without question the most energy efficient form of land transport. As such it will better link Canberra into the national low-energy future. 

Whilst the infrastructure will have a role in freight transport – our main game in the ACT is knowledge. 

By providing very fast links between Canberra, Sydney, Melbourne and even Brisbane - it will be the ‘intellectual silk road’ by which Canberra- based knowledge businesses trade with Australia’s major population and commercial centres. 

It will have an important role in supporting the ACT’s $1.5 billion tourism industry – and the 13,500 Canberrans who work in it. 

It will do so directly – and indirectly.  High-speed rail will provide yet another convenient and cost-competitive way for visitors to come here.   

The labour impacts of the high-speed rail for Canberra would be significant also. 

There will be a significant boost to job creation and our local economy during the construction phase.  

This initial spike in activity would be replaced over the longer-term with new jobs created to maintain and operate the new high-speed rail network. 

For example – I can’t see why the ongoing control and management of this national rail network would not be based in Canberra – creating ongoing, highly skilled jobs. 

High-speed rail would also open the door to a larger pool of labour – increasing labour mobility. 

This would make it easier for local businesses to be able to draw on a larger skilled labor force, lifting productivity and allowing for greater job creation in the ACT and region.  

This employment growth will in turn encourage greater consumer spending. 

This will permeate through all sectors of the ACT economy, encouraging further economic activity and job creation. 

In summary – the economic and environmental benefits of this project in the long-term are obvious – as are the costs. 

That’s why I am heartened that the vision of an east coast high-speed rail network is being examined in a measured way. 

I am heartened that a stepped approach – starting with the identification of the route – is being taken – and that a largely bi-partisan and long-term approach is being taken. 

As we move to a clean energy economy the conditions for this project to become a reality are materialising. 

It’s a project whose time – if not already here – is just around the corner. 

And when it does it will be good news for the ACT and our region. 

That’s why the ACT Government remains committed to doing whatever we can to ensure the high-speed rail becomes a reality – and that the Canberra community can take best advantage of it. 

ACT Economic Statement

Given the events of recent weeks and months, I would like to take this opportunity to provide an update on the outlook for the Territory economy. 

The fundamentals of our economy remain strong.

Seasonally adjusted State Final Demand  - or SFD - grew by 3.3 per cent in the March quarter 2011 - this was the strongest growth rate in the country.

In the nine months to March 2011, SFD grew by a solid 6 per cent – the strongest three-quarter growth rate since the June quarter 2007 - and the strongest growth compared to other jurisdictions.

We experienced the equal-lowest consumer price inflation of the capital cities in 2010-11 at 2.7 per cent.

The ACT labour market performs well compared with other jurisdictions. 

We have the lowest unemployment rate in Australia.

It was 4 per cent in July 2011, well below the national average, and we have the highest participation rate at 72.5 per cent. 

Our housing market also continues to perform well. 

Current housing indicators point to stabilising growth, after the peaks which occurred following the Commonwealth Government’s stimulus measures. 

The trend of housing finance commitments for owner occupiers in the ACT remained above its five-year average in June 2011.

The value of housing finance commitments for individual investors for new and existing dwellings increased again in June 2011 for the third consecutive month.

It too remains above its five-year monthly average.

 

The Government’s policies and programs are working to keep our economy strong. 

Year-on-year to the March quarter 2011, dwelling investment increased by 26.1 per cent - and dwelling investment was the second largest contributor to SFD growth.

Data shows residential investment remains strong, with residential building approvals in the ACT increasing to a record level in June 2011. 

This was the ninth consecutive monthly increase, and approvals remain significantly above their five-year monthly average. 

The number of ACT residential building approvals rose by 28.7 per cent year-on-year to June 2011. 

Nationally, it decreased by 5.1 per cent. 

Through a range of initiatives in the 2011-12 Budget, the Government continues to release more residential land. 

Over the next four years, the Land Release Program aims to deliver 18,500 residential dwelling sites.

Strong population growth in the Territory is also supporting our economy. 

The ACT’s residential population increased by 2 per cent in the year ending 31 December 2010. 

This is the highest annual growth in two decades.

Compared to other jurisdictions, it was the second strongest population growth after the mining state of Western Australia.  

As Members would be aware, the degree of uncertainty surrounding the global economic situation has increased. 

Global financial markets are experiencing extraordinary financial instability flowing from a deepening of Europe’s sovereign debt crisis and the United States’ growth and sovereign debt woes.

The volatility in the currency, equity and interest rate markets has been severe. 

International equities have fallen substantially since the beginning of July and market volatility has affected Australian equities and interest rates.

We must be clear: the volatility in markets experienced in recent days is not solely a function of the recent downgrade of the US’ credit rating.  Global share markets have been deteriorating since July.

This is due to Euro sovereign debt concerns, caused by the risk of a default by Greece and challenges for Portugal and Ireland. 

More recently, possible defaults on Italian and Spanish debt - and the continuing poor economic conditions in the United States - have further increased uncertainty.

Global financial markets are being affected by this intense uncertainty, and as a result - share markets are fluctuating wildly. 

We can expect continuing volatility, a continued focus on excessive global public debt and continued weakness in consumer spending in developed economies.

We can expect this to continue until market concerns and uncertainty can be appeased with clear policy responses from governments and from central banks.

Experts consider that there is little change in the economic fundamentals underscoring the global and national economies. 

In a recent statement, the International Monetary Fund (IMF) projected that Australia’s real Gross Domestic Product (GDP) will grow by 2 per cent for calendar year 2011 and by 3 per cent in 2012.

This is expected to be on the back of strong demand for commodities, and private investment in mining and liquefied natural gas (LNG). 

While there are some questions over the strength of the ‘developed economies’ - particularly the United States and Europe - the outlook for ‘developing economies’ such as China and India - remains positive. 

If the international outlook worsens significantly, short-term domestic impacts are likely to come from a further loss in business and consumer confidence.

This in turn would impact on private sector investment and employment, household consumption and the housing market. 

Consumer confidence in Australia is currently at a relatively low level. 

The Westpac-Melbourne Institute Survey of Consumer Sentiment shows in its Consumer Sentiment Index that confidence is 24.8 per cent below its level a year ago. 

This was the situation prior to the events of the last few weeks. 

And we can expect to see more. 

Financial market turmoil undermines consumer confidence and in turn - falling consumer confidence is often associated with a slowdown in household consumption.

Household consumption is likely to remain weak for some time as households focus on protecting their balance sheets by saving or paying down debt.

The prospects of the Reserve Bank using its monetary policy levers in the short-term is now less likely.

This should provide a stabilising effect on the national and domestic economy. 

Market volatility and some recent softer-than-expected domestic economic data could mean the RBA might not increase the cash rate in the near future as many commentators previously expected.  There is, in fact, some prospect that the next movement will be downwards.

This would provide some temporary relief to consumers, home owners with a mortgage and businesses.

While the ACT economy continues to perform strongly, there is no doubt that downside risks to the budget in particular have increased. 

It is unclear at this stage whether the risks will transpire. 

In comparison to many countries, Australia is well positioned to meet the challenges to our economy.

This is also the case for the ACT. 

Economic Policy makers here and nationally have ample scope to react to any negative external shocks should that be required.

Because of its current monetary policy stance and sound fiscal position, Australia has options in both monetary and fiscal policy to respond to a global downturn. 

Although some sectors such as tourism and education currently face challenges from a high Australian dollar, overall the ACT economy is well placed to face any adverse impacts. 

But as I indicated earlier the budget now faces noticeable risks.

There is a risk of slower growth in the GST pool due to the lower household consumption.

If this eventuates, it will have implications for the ACT Budget. 

There could also be direct impacts if the financial environment changes substantially. 

These include lower investment returns for both our superannuation investments and the Territory’s cash balances, and higher superannuation liability and expenses. 

There could be revenue impacts as well, as uncertainty may restrict private investment, which would affect revenue such as conveyance duty and payroll tax. 

All these impacts could be partially offset by lower borrowing costs. 

However, as I indicated earlier, international and domestic economic fundamentals remain strong and the situation is unclear. 

The risks remain just that - risks only.   

The ACT Government stands ready to deal with any negative shocks to our economy. 

We have a track record of sound and sustainable economic and financial management. 

We will maintain a close watch on events abroad, in Australia, and in the Territory. 

And if necessary, we will act.

The underlying budget structure is sound as a result of prudent financial management.

If a negative economic scenario unfolds, we will adjust our policy settings to maintain the Territory’s strong financial position.

The ACT economy continues to perform well and we benefit from a strong demographic base and an economic structure that will substantially shield us from negative global economic shocks. 

The Territory’s high-income demographic and our young and well-educated population contributes to a strong workforce-participation rate – currently the highest of the jurisdictions.

Public sector employment is a solid and stable driver of skilled employment in the ACT, delivering job security and a stable income source. 

It is also a driver of population growth and reduces uncertainty, allowing local businesses to invest with confidence and contribute to employment growth.

Existing ACT Government policy settings will also provide some buffer.  

Through our record levels of investment in education and training and our Skilled and Business Migration program, the ACT Government is working hard to enhance our already skilled workforce. 

We are ensuring housing demand is met and we work actively with the private sector over the timing of our comprehensive public works program. 

And we are working to ensure our tertiary institutions are positioned for growth in the changing times ahead. 

Of course the Commonwealth Government’s presence will remain important to the ACT economy. 

We continue to engage with our Commonwealth colleagues so that they are aware of the impact of their decisions on our economy. 

We known that global uncertainties and soft domestic economic data might put the Commonwealth budget position under pressure which could have an adverse impact on the ACT economy.

While the Commonwealth Public Service is a buttress to the ACT economy – it is also the source of considerable economic risk.

The Federal Liberal Party has made it clear that on forming office they will cut 12,000 public servants – most of them Canberrans.

This is the same populist Canberra-bashing policy John Howard implemented in 1996.

It smashed our economy – it put Canberrans out of work.

It saw the ACT become the only jurisdiction to go into recession in that year.

While there are many risks to the ACT economy – this is one of the most significant that we face in the next few years.

The Government is well aware that some groups in our community may be particularly susceptible to tough economic circumstances. 

These include self-funded retirees who rely on their investments and savings, part-time and casual workers who are vulnerable to changes in working hours and less skilled workers. 

The Government provides a range of financial assistance in areas including energy, water and sewerage, public transport, motor vehicle registration, drivers’ licences and spectacles. 

The ACT Government Concessions Portal is designed to make it easier for low income households to access information on concessions. 

The Government increased the utilities concessions by $131 from 1 July 2011 bringing it to $346 per annum and we are undertaking work to target concessions to those most in need. 

Global economic and financial uncertainty will be with us for some time. 

The national economic fundamentals and those of the Territory are strong.

But we are not immune from international economic events. 

We will continue to monitor developments closely as and stand ready to respond should that be required. 

Bradley report on the future of CIT and UC released

I have released a report by Emeritus Professor Denise Bradley AC, on options for the future of the University of Canberra (UC) and the Canberra Institute of Technology (CIT).

Professor Bradley's report finds that given the significant changes in national tertiary education, it is not an option for Canberra's CIT and UC to continue to operate in their current form.

The report recommends the ACT Government establish a new dual sector institution formed from an amalgamation of CIT and UC.

Professor Bradley recommends an amalgamation should proceed underpinned by the following:

• Respect and value accorded to the unique characteristics of each partner 
• Respect and value accorded to the values, culture and traditions of each sector and 
• Understanding of and respect for the strengths each will bring to the new institution. 

Professor Bradley also recommends that if the ACT Government elects not to establish a new institution, it provides the CIT with greater independence.

Professor Bradley recommends that the new institution commence operations on 1 January 2012. The establishment of a new institution or greater autonomy for CIT would require legislative changes that would need to be considered by the ACT Legislative Assembly.

I will establish a Government strategy group to consider how these options would be implemented and make a final recommendation to Government in November 2011. This group will consult with the management of both institutions, representatives of unions and student representatives as well as other stakeholders as appropriate.

Professor Bradley’s report can be viewed at here and feedback can be provided until 23 September 2011. A report on the feedback received will be provided to the Government strategy group.

The ACT Tertiary Taskforce and the Hawke Review both recommended respectively closer collaboration between and amalgamation of UC and CIT. The ACT Government commissioned Professor Bradley to report on future options for the institutions.

In preparing her report, Professor Bradley met with senior executives and staff of both CIT and UC and considered extensive information provided by the institutions. Her report also draws on her extensive professional knowledge of the reform of the national tertiary sector.

Professor Bradley will brief the Canberra Liberals and ACT Greens Party on her report today.

Education and Training Speech to 2011 ACT ALP Conference

Education is central to a strong community – so it is central to what ACT Labor is about.

When it comes to education our greatest obligation is to Canberrans who rely on us to help them gain the skills they need for happy and productive lives.

We meet this obligation in education above all others - and we do so unapologetically.

That’s why this Labor Government has – and continues to – invest more than any other in education and training.

To put this ACT commitment in context, Federal Labor’s Building the Education Revolution program invested $150 million in ACT public schools.

In 2011-2012, this ACT Labor Government is investing more than $834 million in education and training.

We are upgrading every school – and building new schools where they are most needed.

As a result our schools are great places to learn – and great places to work.

Delegates, we have worked hard to ensure our schools move with the times – to give students the education they need.

And we will continue to do so.

I recently released a document called Excellence and Enterprise: Advancing public schools of distinction.

This document - outlining our next steps in school reform - was developed after extensive consultation with the community – and with education stakeholders.

The framework is a long-term approach to improving public secondary schooling in the ACT.

Under this plan ACT Public High Schools and Colleges will be able to specialise in certain subjects to meet the changing needs of students into the future.

Principals – our educational experts - will have a greater say in how they run their school to better meet the needs of their community.

They will have more say in who teaches at their school.

And because Labor understands that a great education requires great teachers we seek the ability to better reward teachers.

We want to make it possible for a great classroom teacher to stay in the classroom teaching and still be eligible for promotion and a six-figure salary.

We want to see these teachers continue to share their enthusiasm and knowledge with their students – and with their colleagues as mentors.

We want to make teaching once again a profession of choice and prestige.

The aim is simple - to ensure every Canberra can get the best education possible.

We will continue to work with schools and with teachers to deliver on our goal.

Delegates, education and training does not stop at year 12 – nor does the need to ensure our education system is meeting the needs of students – and employers.

Federal Labor has set about the process of completely overhauling post-school education. This began with a review conducted by an independent expert panel, led by Emeritus Professor Denise Bradley.

Following this review Federal Labor committed an additional $5.4 billion to support higher education and research.

This is a quantum leap in funding is designed to support high quality teaching and learning. It’s designed to improve access and outcomes for students from low socio economic backgrounds and build new links between universities and disadvantaged schools.

ACT Labor embraces this reform.

We do so because it’s about making sure our intuitions deliver for students and for the entire community. But it will mean change in the way we do things here in the ACT.

In the wake of her national review I asked Professor Bradley to examine the way forward for the Canberra Institute of Technology and the University of Canberra.  Professor Bradley’s report will be released on Wednesday. The report finds that the status quo in ACT higher education is not sustainable.

Neither CIT or UC have the sufficient scale or mass to effectively compete in the new higher education environment. 

We can’t afford to let these institutions wither on the vine because what they deliver is so important to ensuring Canberra is a community skilled to succeed in the 21^st century.

Delegates - we have a road of reform ahead of us.

But in this area of education – as in others in the past – this Labor Government will not shirk the responsibility for ensuring our education system moves with the times and meets the needs of our community.

Marriage Equality

We all define ourselves in some way by who we chose to share our lives with.  Love, trust, intimacy and commitment are found at the heart of all good relationships.

I am very proud to live in a community like Canberra that encourages, empowers and protects couples who want to make their relationships loving, who want to make them long-term, stable and committed.  Our civil partnerships legislation has allowed this.

I am left wondering though why it is that same sex partners are not able to stand up in front of their family and friends and to receive the formal blessing of the Commonwealth for their union through marriage.

Gays and lesbians are part of our community, we are not nameless, faceless people, we deserve respect and the same dignity that is afforded to others, and we deserve equality.

Marriage equality is not only functional and practical, it is highly symbolic.  It allows us to hold our heads up high as equal members of the community and to celebrate our relationships.

I can see no good argument for allowing only opposite sex couples to formalise and celebrate their relationships through marriage and then to deny that right to same sex couples.

I often hear those who oppose equal marriage talk about its alleged dire effect on families. This ignores the fact that gay men and women have families too. We are sons and daughters, we are brothers and sisters, we are cousins, we are aunts, we are uncles and we are parents.

So let me say how pleased I am that the ACT Branch will seize the opportunity today to support equal marriage and to plainly say that no one deserves to be excluded from this institution simply because of his or her sexual orientation.

This is about drawing a line in the sand. It is about standing up for your principles.

Marriage equality is about giving every Australian citizen the same rights. At the moment gay and lesbian people have lesser rights. Most of you in this room, if not all of you, would know a gay or lesbian person. You might work with them, they could be a family member, they could be a neighbour. Gays and lesbians are members of our community just like everyone else.  

We are public servants, police officers, nurses, cleaners, mechanics, bus drivers, truck drivers, construction workers, small business owners, electricians, ambulance officers, lawyers, defence force personnel and, yes, we are RETAIL workers.

We are interested in the same issues as everyone else -- job opportunities; a well resourced health system; quality education; good effective public transport and roads; action on climate change and a strong economy.

Marriage equality is about giving us the same rights as everyone else.  State and Territory, or even national, civil union schemes don't achieve that.  They have been a welcome advance on what stood before - no legal recognition at all - but they do continue to see us as second-class citizens.   

Not really equal and certainly very separate.

By saying yes to marriage equality, you are saying yes to the many sons and daughters, parents, uncles and aunts, nephews and nieces, cousins and friends having the same rights as you.

Supporting marriage equality is supporting equal rights for all Australians.

Delegates, marriage equality is not only a human rights issue; but follows in a long line of important social justice reforms made by Labor Governments throughout Australian history.

Reforms brought about by collective action from the Labor Party.

We are at our best as a political party when we work together to make our country a fairer and more inclusive place.

In closing, I would like to thank delegates who are supporting this motion today. 

Every vote counts, every message of support counts in this national debate.

Support for this motion today represents another step towards the removal of discrimination that is intensely felt by Australians who have been living in long-term, loving, same-sex relationships and those who aspire to such relationships.

It will help ensure that all Australians, regardless of their sexual orientation, are shown the dignity and respect to which they are entitled.