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CTP Green Slip Reforms Abandoned

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.