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Tuesday, 5 February 2013

Minister muddles while insurers gouge motorists $2 billion in super profits

Minister Pearce (Photo from SMH)

The NSW Finance Minister has been caught out misleading the public on the reasons why he raised Green Slip insurance costs by an average of $50 per motorist earlier this month.  The Minister wrongly claimed the cost
increase was rising legal and administrative costs when these costs are falling.  The real cost driver is the super profits going to insurers - now more than $2 billion over ten years.

See SMH story here:

”The Minister’s lack of understanding of how the MAA scheme works is a
clear sign he should not be the Minister responsible.
  s c

"Greg Pearce was either ignorant or deliberately misleading when he
declared that legal and administrative costs are driving up premiums, those
costs are stable or falling, it is the insurers' excessive profits that
motorists are paying for.

"The Minister is not only approving excessive cost increases, but is
misleading the public on why he is doing so.

"Successive governments have allowed insurance companies to get away with
creative accounting for more than 10 years, which has seen the gouging of
more than 2 billion dollars in excess profits from the people of NSW.

“These excess profits are in addition to the 8% of premiums that the
insurers had promised they would take.

"For more than a decade insurance companies have been allowed to skim off
one in every five dollars that motorists have paid for their greenslips as
pure profits.  Despite this history Minister Pearce just ticks off on
further increases.

"The Minister is wrong about increasing costs, wrong about insurer profits
and wrong to further increase costs for drivers in NSW.

"This is yet another example of the O'Farrell government protecting
insurance company super profits at the expense of those paying premiums and
those seeking compensation under the schemes.

"The hide of Minister Pearce to push deeper into the pockets of mums and
dads here in NSW to prop up insurance company super profits is remarkable.

"The Minister has either deliberately mislead the public or is ignorant of
his portfolio responsibilities – either way he is not fit for office and
Barry O'Farrell must act," Mr Shoebridge said.

*Media Contact: 0408 113 952*

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