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CTP Green Slip Reforms Abandoned

Monday, 19 August 2013

The NSW Government has announced today (19 August 2013) that it is withdrawing legislation for reform of the CTP greenslip scheme in NSW.

By withdrawing the legislation, the Government is effectively abandoning the current plan for reform of the scheme.

Andrew Constance, Minister for Finance and Services blamed the fact that Labor and the Greens would not support the legislation in the Upper House.

Minister Constance said “There is no doubt the current CTP scheme is broken and its disappointing Labor and the Greens would rather work against the Government than co-operate to reach a solution”.

The Government has been under pressure to stop ongoing increases in greenslip prices. Minister Constance argues that “the NSW Government’s legislation was designed to make the CTP scheme more affordable for motorists and fairer for accident victims”.

The Government has cited estimates by Ernst & Young* as evidence that prices would have decreased under the proposed new scheme, however there is concern that accident victims would have paid the price.

Ernst & Young estimated that average car greenslip prices in 2014 (excl GST) would have decreased by $97.00 from $571.00 under the current scheme to $474.00 under the proposed scheme. Ernst & Young also estimated that without reform, the current scheme cost will increase by about 10% in 2014.

Whilst benefits would be paid sooner, Lawyers and victims groups have argued that under the proposed scheme victims would have been disadvantaged by reduced legal representation and reduced compensation.

The next step for the Government is not clear. The status quo will likely result in higher greenslip prices. Higher greenslip prices will result in even greater pressure on the Government.

We will provide more information as it becomes available.

*Ernst & Young, “Estimated Cost Per Policy of the Proposed NSW Green Slip Scheme”, 29 July 2013.

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CTP Greenslip Reform - Greenslip Price Estimates Released

Thursday, 08 August 2013

The Motor Accidents Authority of NSW (MAA) has released estimates of greenslip prices under the proposed new CTP greenslip scheme.

The estimates are set out in an actuarial report by Ernst & Young (E&Y), “Estimated Cost Per Policy of the Proposed NSW Green Slip Scheme”, dated 29 July 2013.

Estimates for 2014 include the following:

1. Average Greenslip Cost under the proposed scheme down by $97.00, form $571.00 under the current scheme to $474.00 under the proposed scheme.

2. Average cost savings of around 15% per greenslip (excluding any reduction in the MCIS Levy) under the proposed scheme.

3. Without reforms the current scheme cost could increase by about 10%.

4. Scheme Affordability (Greenslip Cost as a proportion of Average Weekly Earnings) improved from 39% under the current scheme to 32% under the proposed scheme.

Estimates are for Class 1 vehicles (motor cars) and assume a mature scheme. Price estimates exclude GST.

The E&Y report provides estimates on the basis of the Motor Accidents Injuries Amendment Bill 2013, which sets out the detail of the proposed new scheme, as it currently stands. The Bill was introduced to parliament in May 2013. The government was not able to secure passage of the Bill through parliament and there has been considerable criticism from stakeholders. A roundtable was held on 24 July to discuss the Bill. As a result of the roundtable and ongoing consultation, there may be amendments to the Bill, particularly in the areas of benefits for children and legal representation. The E&Y estimates will be affected by any amendments to the Bill.

At the roundtable, participants were critical of the government for not having released the estimates, particularly as the estimates were a large part of the government’s justification for the reforms. Insurance Council CEO Robert Whelan said “We can’t guarantee the extent to which premiums will go down. The reason for that is we don’t have clarity around the claims position on this new scheme.”

In his Media Release of 31 July 2013 announcing the release of the estimates, Andrew Constance, Minister for Ageing & Disability Services said that he will continue to consult with stakeholders on their concerns and that he is “awaiting the advice from the CTP roundtable chair Paul McClintock and the steering committee, which is overseeing any further work needed to refine amendments to the Bill.”

At the roundtable, the Minister said that he wants the government's position on the reforms resolved by the end of August.


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CTP Roundtable Held

Wednesday, 24 July 2013

The proposed CTP roundtable was held on 24 July 2013, to discuss proposed reforms to the CTP greenslip scheme in NSW.

In his welcome, Minister for Ageing and Disability Services, Andrew Constance said that he wants the government's position on the reforms resolved by the end of August.

Chair for the day, Paul McClintock will prepare a report on the discussions for the Minister and the steering committee. The report will be published.

In his summing up, Mr McClintock identified the following issues and observations from the day:

  1. Scheme coverage.
  2. Certainty, timeliness & care.
  3. Freedom (how you are cared for) & choice (use of a lawyer).
  4. Justice (cross subsidisation of risk).
  5. Risk mitigation.
  6. Cost & efficiency.
  7. Governance (and lack of trust between insurers and other stakeholders).
  8. Transparency of information and data.
  9. Sustainability.
  10. 5 year cut-off point for the majority of benefits.
  11. There is a long way to go (there is a lot of detail and a lot of issues for resolve).

We will provide information on the report as soon as it is available.

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CTP Roundtable Details Announced

Wednesday, 03 July 2013

On 19 June 2013, the NSW Government announced that proposed reforms to the NSW CTP greenslip scheme would be delayed. The government admitted that it would not get the reforms through the upper house and that wider community consultation was required.

At the time of the announcement, Acting Minister for Finance and Services, Andrew Constance said that the Government wanted to consult further with stakeholders and that it would do so by facilitating a CTP roundtable.

Mr Constance has announced that the roundtable to discuss reforms to the CTP greenslip scheme will be held at Parliament House on Wednesday 24 July 2013.

Paul McClintock AO, Chairman of Myer Holdings Limited and former Secretary to Cabinet in the Australian Government has been appointed to chair the roundtable. ABC broadcaster Peter Thompson will act as facilitator and John Walsh AM, former Associate Commissioner at the Productivity Commission will provide actuarial expertise at the roundtable.

Invitations are being issued to insurers, lawyers, motoring groups, accident victims and community and business leaders.

An issues paper will be released a week prior to the roundtable.

Members of the public will be entitled to sit in on proceedings.

Mr Constance said that “the NSW Government has listened to community concerns and will use the roundtable to explain the reforms more effectively and explore the concerns of the various representatives.”

Enquiries can be directed to This e-mail address is being protected from spambots, you need JavaScript enabled to view it .




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CTP Greenslip Reforms Delayed

Thursday, 20 June 2013

The NSW Government announced yesterday that proposed reforms to the NSW CTP greenslip scheme will be delayed. The Government will need to re-visit the nature and the extent of the reforms in order to get them through parliament and to gain wider community acceptance for them.

In his press release, Acting Minister for Finance and Services Andrew Constance said that “the NSW Government does not have the numbers in the Legislative Council to proceed with the legislation and believes more work is necessary to discuss the reform with the community”.

The Government has been criticised for the reforms and for the speed at which they are being pushed through.

The Government is proposing to move to a no-fault scheme. Under the scheme, for most injured parties benefits are prescribed and cut off after five years. Because benefits are capped and because the scheme is not fault based, the government argues that the cost of the scheme, including benefits paid, administrative and legal costs will be reduced, resulting in lower premiums. Opponents argue that injured parties will not be adequately compensated and a mandatory cut off period is unreasonable. Opponents are also concerned that most injured parties will no longer have the benefit of legal advice and representation.

The initial consultation period was relatively short. The initial discussion paper was released on 17 February 2013, with public comment open until 5 April 2013. The Bill was introduced into the lower house approximately five weeks later on 9 May 2013.

The Government says it wants to consult further with stakeholders.

“We will take the next six weeks to communicate and further consult on stakeholder issues and at the same time work with cross bench MPs”.

“We will facilitate further discussion by holding a CTP roundtable involving relevant players including accident victims, insurers, lawyers, community and business leaders”.

“The bill will be further consulted on as part of this process and a position paper will be released prior to the roundtable”.

The CTP roundtable is expected to be held in mid July. The Government expects the bill to be discussed in the upper house in late August.

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