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CTP Green Slip Reforms Abandoned

The NSW Government announced today (19 August 2013) it is withdrawing legislation for reforming the NSW CTP greenslip scheme. By withdrawing the legislation, the Government has effectively abandoned the current plan for reform of the scheme.

Andrew Constance, Minister for Finance and Services blamed the fact it was abandoned on Labor and the Greens. They did 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”.

Under pressure

The Government has been under pressure to stop ongoing increases in greenslip prices.  Minister Constance argues “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 argued  the proposed scheme would disadvantage victims by reducing legal representation and reducing compensation.

New steps

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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