No-Fault Accident Insurance

The WA Government has released a Green Paper (https://www.icwa.wa.gov.au/mvpi/greenpaper/mvpi_ctp_green_paper_intro.shtml) seeking comment on the possible introduction of no-fault catastrophic Compulsory Third Party (CTP) insurance for people catastrophically injured in motor vehicle accidents in WA.

Currently, CTP provides cover for drivers/owners of registered motor vehicles for personal injuries they may cause to other people as a result of a motor vehicle accident. This is an 'at-fault' scheme where you must assert fault against a driver of a WA registered vehicle in order to make a successful insurance claim. Vehicle passengers, pedestrians and cyclists can also claim against an at-fault driver to obtain compensation for their injuries from motor vehicle accidents.

In the CTP scheme, if you are at fault, no claim can be made and if you are partly at fault, the compensation you are entitled to may be reduced. There are also problems in the event that the vehicle is unregistered and uninsured.

The Commonwealth Government has proposed that existing State and Territory CTP schemes be expanded to provide care and support to all people catastrophically injured as a result of a motor vehicle accident irrespective of fault. Catastrophic injures are defined as spinal cord injuries, traumatic brain injuries, multiple amputations, severe burns or permanent traumatic blindness.

The STC has made a submission, the text of which is below, arguing that the scope of the proposed scheme is too limited and should be expanded, at least in the longer term, to cover a wider range of injuries and any type of accidental injury in a public place.

The STC supports the intent of the green paper on no-fault insurance but submits that it has important limitations that should be addressed either from the start or as part of a longer-term strategy to reduce uncertainty and costly litigation over accidental injuries sustained in public places.

The STC submits that the scheme as outlined in the green paper is a good starting point, but is too restrictive as a long-term strategy. In particular, the proposed scheme should be seen as an initial step towards:

a) a lower threshold for injury severity than envisaged in the green paper;

b) a no-fault transport insurance scheme; and, ultimately,

c) a comprehensive personal insurance scheme covering all accidental injuries, as is the case in New Zealand.

With respect to (a), the injury severity of a crash is often an idiosynchratic outcome (a specific type of crash will have a range of injury outcomes) and a too-high threshold will increase the likelihood of either misrepresentation of or argument about severity simply in order to get access to the no-fault compensation.

With respect to (b), there are important equity issues - for example, that a pedestrian injured while crossing a public street should not be disadvantaged if hit by a bicycle rather than a motor vehicle. Whilst it is true that injuries caused by motor vehicles are likely to be more severe than those caused by a bicycle, this is by no means always the case. We note that it is also possible for the actions of a pedestrian (eg on a shared path) to result in severe injury to a cyclist.

In addition, if injuries caused by vehicles other than motor vehicles are excluded from the scope this potentially opens up a complex area of litigation where there is a chain of events that result in a bicycle (or other non-motor vehicle, such as a gopher) causing injury to a pedestrian - in which there might or  might not have been involvement of a motor vehicle (eg by causing a cyclist to swerve towards pedestrians.

With respect to (c), this would be a more limited version of the scheme that already exists in New Zealand. It avoids some of the problematic issues that arise from the New Zealand coverage of accidental injuries in private places (including, for example, workplaces) which would continue to be covered by existing private insurance arrangements such as workers compensation and public liability insurance.

Within the currently-proposed motor-vehicle injury insurance, the method of payment should reflect the exposure (as both cause and effect) to injury, the most obvious determinant of which is distance travelled. A second element is the size and mass of the vehicle. For both these factors, there is a high correlation with fuel consumption and, therefore, a logical (and economically-efficient) way of funding such a scheme would be through a levy on motor vehicle fuel - as is the case in New Zealand for the motor  vehicle component of its scheme.

Whilst, since the High Court decision of 1997 on business franchise fees (including petroleum franchise fees), it appears that the States have no power to impose charges or taxes on motor vehicle fuel, the States and Commonwealth can collectively do so by a differential rate of GST on fuel. Since the Productivity Commission has recommended that no-fault CTP insurance schemes should be introduced by all States and Territories, this is a clear opportunity for Western Australia to show leadership at the national level. GST on motor vehicle fuel is returned directly to the States, so any such proposal can be kept separate from the issues of redistribution of GST revenues that are so disadvantageous to Western Australia.

We would be happy to provide further information or to discuss the matters raised in this submission. Please contact me by phone or email should you wish to do so.

Written and Posted by Ian Ker, Convenor, STCWA on behalf of the STC Committee

More On Congestion-Charging

We have recently devoted a substantial amount of space on this blog to the issue of congestion pricing (Flat Fee Is Not A Congestion Charge; The Good Oil on Congestion Pricing; Kite-Flying or Desensitising), but make no apology for now including the piece from Stephen King, Chairman of the Economic Regulation Authority, that was published in today's (23rd December, 2014) West Australian newspaper. This piece provides a valuable and coherent statement of how congestion pricing should work.

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'Planning' As A Substitute For Action?

Thirty years ago, Liz Ampt published a paper entitled "Planning as a substitute for action". This was a critique of bicycle programs in Australia but the epithet could well be applied to public transport in Perth today.

While the STC strongly supports long-term planning for public transport, it is critical that this planning is actually implemented.

We currently have plans for two major rail projects (MAX and the Airport Link) neither of which seems likely, in the current economic climate, to be funded, as well as a number of smaller rail extensions - and the contentious Ellenbrook rail link.

Rather than calling back-of-the-envelope doodles 'plans' and using them to distract attention from other transport issues (such as Tier 3 rail line closures, the misbegotten 'congestion tax' and ministerial conflicts of interest), let's get on with enhancing the system we have (more trains and more buses).

Does anyone have any idea where the latest heavy rail line might be intended for, given Reece Waldock's reported statements that "the underground line would not compete with the MAX project, because it would go along another route and extend far further to the north" and that "the promised rail line to Ellenbrook would not compete with it either because it was further to the east and north"?

The only possible location appears to be west of Mirrabooka - or it hits Whiteman Park - and far enough west to say it doesn't compete with MAX means it has to be close to Wanneroo Road - and thus competes with existing Northern Suburbs Rail.

Still, while we're on the subject of 'flying kites', if the Airport Rail Link is to be built (and the STC is on record as questioning the justification for it - http://sustainabletransportcoalitionofwa.blogspot.com.au/2014/08/lack-of-transparency-in-transport.html), why not extend it through to Morley as well as linking it into the Perth-Midland line and encourage redevelopment of the Ashfield light industrial area with a focus on a very high level of rail accessibility.

West Australian, 11th December 2014

Written and Posted by Ian Ker, Convenor, STCWA

Kite-Flying or Desensitising

If Colin Barnett intended the leaking of an increase in motor vehicle registration fees to be a kite-flying exercise, the response is clear and unequivocal - the kite has crashed and burned.

Interestingly, the negative response is not solely (or even largely) on the basis of 'fleecing the motorist' but reflects concerns about:
- affordability for those on low incomes, many of whom live in areas not well served by public transport
- equity issues between those who drive a lot and those who drive little
- equity between city and country
- the need for revenue to be returned to improving alternatives to the private car so that there can be a real improvement in congestion.

These are issues raised in this blog yesterday (http://sustainabletransportcoalitionofwa.blogspot.com.au/2014/12/flat-fee-is-not-congestion-charge.html) and in the STC letter published in the West Australian today (below right, albeit with some editorial trimming).

Unfortunately, the whole episode might be not so much kite-flying as an exercise in desensitising - hoping that, when the additional charge is imposed in the 2015-16 Budget, we will all say we knew it was coming, shrug our shoulders and move on.

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Written and Posted by Ian Ker, Convenor, STCWA

The Good Oil on Congestion Pricing

A good resource on principles and practice of congestion pricing. As the makers of the video state:

In London, which successfully implemented congestion pricing in 2003, drivers now get to their jobs faster, transit users have improved service, cyclists have better infrastructure, and pedestrians have more public space. More people have access to the central city, and when they get there, the streets are safer and more enjoyable. While the politics of implementing congestion pricing are difficult, cities looking to tame traffic and compete in the 21st century can't afford to ignore a transportation solution that addresses so many problems at once.

The video, produced by 'Streetfilms', can be downloaded from http://www.streetfilms.org/mba-congestion-pricing. 

Posted by Ian Ker, Convenor, STCWA

Flat Fee Is Not A Congestion Charge

There is no doubt that car use at times of peak demand and, hence, heavy congestion is underpriced. At peak times, every additional kilometre we drive adds more to the costs of other road users than it costs us directly in car running costs - but others pay for it. And then there are the environmental and social costs of air pollution, traffic noise and community severance.

So, appropriate congestion charging is a sensible component of travel demand management.

But a flat annual fee, as proposed by the WA Government, is not a congestion charge as it is not related to to the time, place or amount of car use.

People who drive little will pay the same as those who drive a lot.

People who live in the outer suburbs and rarely drive into congested areas will pay the same as those who frequently drive in the inner city at peak times.

People on low incomes will pay the same as people on high incomes, but the surcharge will be a much larger proportion of their incomes - it will be a classic regressive charge.

One hopes that country people will not be asked to pay this surcharge, but it needs to be borne in mind that cars are not necessarily used where they are registered - especially in the case of cars leased by non-metropolitan businesses.

A congestion charge, to be effective, must reflect the time and place of use. If it does not, it will justifiably be dismissed as no more than a piece of revenue-raising opportunism.

UPDATE 4th December 2014

According to the West Australian, the WA Treasurer, Mike Nahan, has ruled out a 'congestion tax' or any increase in 'household fees'.

Apparently, however, that assurance might only apply to the mid-year Budget review. Premier Colin Barnett has said that 'how to fund road and public transport' would be part of next year's budget.

Interestingly, at a seniors' function in the City of Vincent yesterday, Minister for Seniors, Tony Simpson, ruled out any reduction in seniors concessions on council rates, utility charges and public transport fares (including free public transport in the middle of the day, weekends and public holidays).

We'll wait and see what actually happens.

SECOND UPDATE 4th December 2014

Well - that didn't take long!

WA Premier Colin Barnett said a plan for a charge was being considered for next year's budget but the details would not be finalised until April or May next year.

It is not being considered for the mid-year review [later this month], it may be considered as part of next year's budget."

Mr Barnett said the cost would be "about a tank of petrol".

Barnett's (Government) car must have a very large tank.

"What we are looking at is the user pays more," Mr Barnett said.

But this isn't what a flat fee does - anyone with a car pays the same amount more, whether they use it or not.

Posted by Ian Ker, Convenor, STCWA