18 May 2001

Doorstop Interview, Sydney



Following discussion with the insurance industry today the Commonwealth Government is now in a position to offer the States the use of the Commonwealth Government company to help to get payments out to those in hardship under State funds, as quickly as possible. This is a bona fide offer. It is a fair dinkum offer that should help those people enduring hardship get support as quickly as possible, from the States as well as the Commonwealth.

There is no political game here. We are focusing on hardship. The States may have difficulties getting their support out to particular classes that they have already announced they are going to support so what we are doing with the insurance industry is making our facilities available to help them to get payments out to those enduring hardship.

REPORTER: How will it work?

MINISTER: Well, it really is an open offer to the States. That ah, there is a claims-processing facility available. The insurance industry has indicated that there have been tax issues, but the Commonwealth Government stands prepared to fix those. We are as concerned as everyone else about how to get the hardship out. There is a movement of a lot of money from the Governments - State and Federal - to individuals in hardship, so therefore, if we can make our facilities available to help the States then it helps to get that support to those in hardship a lot quicker, then perhaps other means. Now, perhaps the States have a better way of getting their support out, and they can use those. We are just making a genuine offer to assist the States with the new process we have just set up through the non-profit company.

REPORTER: How did you meeting go with Mr Williams?

MINISTER: Mr Williams?

REPORTER: You had a meeting with Mr Williams today

MINISTER: Er, no .... Are you talking about Ray Williams?


MINISTER: I am not sure .... I have never met Mr Ray Williams.

REPORTER: [inaudible] meeting with the Prime Minister and the Attorney General.

MINISTER: We discussed .... It was an update meeting for the Prime Minister on where we were at. A discussion about the structure of the company and going forward. In particular the Commonwealth is working on the hardship packages and the qualifications for that over the weekend, with further discussion early next week in Canberra.

REPORTER: Did Mr Williams give you any more clarity over the conflict of interest over Mr Knott's [inaudible]

MINISTER: Given that ASIC, for all practical purposes, has the same powers as a Royal Commission, ah, the ASIC inquiry into any wrongdoing at HIH should proceed particularly as it is already well under way.

REPORTER: So you say a Royal Commission is off the agenda?

MINISTER: No, I've said that ASIC is undertaking a full investigation that is well under way that should be allowed to continue with it.

REPORTER: So there is no conflict of interest?

MINISTER: Well, look, I am focusing on the hardship of individuals here and that is the basis of our offer to the States. We are working for solutions. That is what I am focused on. I am working really hard trying to try and find solutions for people enduring hardship. The States have offered to help those people in the builders warranty scheme. The Commonwealth is making available whatever facilities it can to help the States to get the support out to the builders and to the victims of builders that have fallen over and that's the offer we've done today.

REPORTER: inaudible

MINISTER: Look, ah, the Prime Minister and the Attorney General and I have been speaking, I'm not in a position to speculate on that, I mean what we're doing is we're focussing on is how to get the hardship package as quickly as possible.

REPORTER: ... inquiry to include APRA?

MINISTER: Well look ASIC is undertaking a very, very broad inquiry covering all the powers of practically a Royal Commission and they are doing it with all the resources we can give them, we should allow ASIC to get on with the job.

REPORTER: Going back to your first point, the NSW Treasurer has come out an hour ago saying he disagrees with the Federal Government's establishment of guidelines to decide who's in hardship and who's not and he pointed out that the NSW Government is a blanket offer, anybody who had a HIH insurance policy can act on that policy...inaudible.

MINISTER: Well, I appreciate Mr Egan's advice. The States have legal responsibility for State run insurance schemes, being compulsory third party, workers compensation and builders warranty, which is set up under State Legislation. All other classes of insurance, and there are extensive classes of insurance covering domestic insurance, international insurance and a range of other schemes are very, very broad and very, very large. The Commonwealth is setting up a hardship package it is not and we've been very clear about this we are not bailing out every policyholder in HIH including large companies in Australia or companies overseas. We're not in that business. We are focussing on hardship and there is considerable hardship out there and we want to try and help those individuals and particularly small businesses who are enduring hardship as a result of the collapse and that's our focus.

REPORTER: Is it too hard to cover everybody?

MINISTER: Well it would be an enormous task, an enormous logistical task and taxpayers money is going to help hardship. The NSW Government has a legal obligation to stand behind their schemes, they have to guarantee the schemes, compulsory third party, workers compensation and the builders warranty schemes. They have a legal responsibility to guarantee the schemes because they force builders to take out insurance...inaudible...CDP. They force employers to ensure there is workers compensation.

REPORTER: Inaudible

MINISTER: Oh no. I mean, I understand the predicament the States are in, but if they are legislating schemes, I mean you should also understand for example in Queensland, there is no issues of substance with builders warranty because there is a State insurance scheme for builders warranty. NSW privatised its scheme, it took the money out of the building services corporation, ah, it said leave it out to the private sector and its got itself in a bit of trouble with its scheme because at the end of the day it guarantees its scheme. So as much as Mr Egan is being generous, ah, you know he, NSW and Victoria are the two States that have gone a particular route ah, the other States have stood behind their schemes and have different schemes and so they don't have the same problem as NSW. So that's how its working, but, you know, there are different schemes in each State and what we are focussing on is how to facilitate the delivery of money to those in hardship and so we're saying with this infrastructure set up with the industry, ah, with this infrastructure set up by the industry, and the government, we are able to help the States to process claims as quickly as possible should they want that offer.

REPORTER: Inaudible

MINISTER: Ah well the infrastructure has been set up as we speak ah, we are unaware of whether the States have any infrastructure to get the money out, I mean, I don't know if the States have been able to get a cheque to anyone yet. Ah, I seriously doubt that they have, been able to get a cheque to anyone, despite announcing packages and that is why from the Commonwealth Government perspective, we are setting up the infrastructure first and then delivering the cheques so that you don't raise expectations of people and not be able to meet them. And NSW is in a position where it has made wonderful pledges and good luck to them for doing it, but they have actually got to get the cheques out to people in distress and ah I don't know if they have got the infrastructure for that, if they have, terrific, if they haven't, they are welcome to use the infrastructure we're setting up to deliver it.

REPORTER: Inaudible.

MINISTER: I have never met Ray Williams. It is not for me to give a running commentary on individuals, I mean its ah, whatever's happened, ah, I and the Commonwealth Government and the State Governments, we are trying to fix the problem and ah, we have to just let, ah, the investigators do their job.

REPORTER: Inaudible

MINISTER: It's just not for me to give a running commentary on individuals. I think that's a little unfair, shooting from the sidelines ah, I have never met Ray Williams, I've just got to focus on helping those in hardship, that's my primary focus. This morning I met another young man, young man, he is older than me, he is, he is 40 and has a degenerative bone disease. He was on $35,000 a year from his salary continuance and this is up in Brisbane and he was begging me to try to help him to get him some support and you know, they are the cases that we are focussing on, I got to tell you. I mean there is no use pointing the finger at anyone else because we've got a very heavily resourced, ah, investigator to do that. I am focussing on helping those people that no one else is helping at the moment.

REPORTER: Inaudible

MINISTER: Well, ah, you would need to ask some other people about Christopher Skase.

REPORTER: Focussing on the hardship cases, how much money are you saving...inaudible

MINISTER: Look, the Commonwealth Government isn't saving any money ah, out of this scheme, we are spending a tremendous amount of money and ah, as, over the next week to ten days there will be more information out about exactly the scale and size once we can obtain more information from the provisional liquidator.

REPORTER: Inaudible

MINISTER: We can't tell at this stage, we are waiting on information from the provisional liquidator.

Thank you.