The Government Prices Oversight Commission has proposed that MAIB premiums for Private Motor Vehicles would rise by just $14 per year, or 4.5 per cent, from December 2003, which is in line with the percentage annual change in average weekly earnings. 

Commissioner Andrew Reeves said that premiums for some classes may rise by more than this, but on average the proposed change was about six per cent.

“This change is due to two factors - accident statistics and the cost of claims and the pass-through of changes in the Commonwealth’s GST arrangements,” he said.

Mr Reeves said Tasmania had one of the most comprehensive and fair motor accident insurance schemes in Australia.

“The proposed changes will keep the charges amongst the lowest in Australia,” he said.

“This would be an excellent result considering the upheavals in the public liability insurance.

“The credit for this should go to Tasmanian motorists and their positive response to the road safety message.”

Although the frequency of road accident injury claims has reduced, these gains have been offset by a rise in the expected costs of claims. 

There have also been changes in the Commonwealth’s GST arrangements for the insurance industry. 

Prior to 1 July this year, Registered Tax Entities were not allowed to claim the normal one-eleventh Input Tax Credit for GST in MAIB insurance premiums. 

Registered Tax Entities are now entitled to the Input Tax Credit, but there is a corresponding increase of 7.4 per cent in the costs for the ‘commercial’ classes, and an increase of 1.7 per cent for other classes.  

Other proposed adjustments include increases in premiums for some high-risk groups, which include self-drive hire cars, motor cycles, taxis and four-wheel motorcycles (ATVs).

Mr Reeves said the ordinary motorist currently subsidised these high risk groups.

“The Government asked the Commission to look at these subsidies,” he said.

“The best way to reduce the subsidy would be to reduce claims for these groups by driver and rider education, but the Commission accepts that accidents do happen and experience shows that these are high-risk categories.

“The Commission has proposed increases for these classes based on the experience of the past three years so that they come closer to paying their fair share of costs.”

Motorists pay for MAIB insurance, which covers the cost of motor accident personal injury insurance, in their motor registration. 

The Commission is now seeking submissions before preparing its Final Report and recommendations to Government.

The Tasmanian Government will then set the maximum premiums that the MAIB may charge for the three years from 1 December 2003.

The Commission has released the Draft Report to seek responses from the community and from the MAIB.

Submissions should be lodged with the Commission by 15 August 2003.

More information:

> Schedule of Current Premiums and Commission’s proposals [29KB]

> Copy of Draft Report on Website: www.gpoc.tas.gov.au