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State Govt Mini Budget – Greenslip Prices

In the Mini Budget speech given by the Treasuer Eric Roozendaal to Parliament yesterday, the Treasurer said,

“The Government will further reform the Greenslip scheme to provide hospital and ambulance coverage for at-fault drivers”.

Under the current scheme, at-fault drivers are not covered unless they are under 16 years of age or unless they are catastrophically injured (in which case they are covered under the Lifetime Care and Support Scheme).

Expanded scheme

Clearly the government is expanding the scheme as a way to reduce a cost burden on the hospital system. The burden will be transferred to insurers and greenslip purchasers and will translate to an increase in premiums. In the same speech, the Treasurer said,

“This extra coverage will add around $10 to the cost of the average green slip”.

The reality is that the impact on the cost of a greenslip will not be known until the changes to the scheme are implemented. The increase in the premium will be determined by the insurers, not by Mr Roozendaal.

The Mini Budget Paper (page A – 7) shows an estimated cost recovery for the government of $105,000,000 between 2009 and 2012.

The change to the scheme does transfer a cost burden from the government to insurers and greenslip purchasers. It will result in higher greenslip premiums. The potential benefit is that at-fault drivers, not normally covered by the scheme, will now be entitled to benefits under the scheme. More will be known when documentation of the reforms is available.


Registration Reforms

The RTA has introduced changes to the requirements for vehicle registration, effective 1 July 2008, including pink slips.

There are two main changes affecting vehicle registration.

Two changes

The first change is that new light vehicles are now exempt from requiring a vehicle safety inspection (pink slip) for the first five years, up from three years. The exemption now also includes light commercial vehicles, panel vans, caravans, trailers and four wheel drive vehicles with a compliance date of 1 July 2003 onwards.

The second change affects pink slips. Pink slips for vehicle safety inspections are now only issued electronically and are called e-Safety Checks. Authorised Inspection Stations are now called e-Safety Stations. The e-Safety Check will be transmitted electronically to the RTA.

The RTA says the aim of the changes is to save motorists time and money.

Both greenslips and e-Safety Checks will now be transmitted electronically to the RTA.

The changes, whilst simplifying the registration process, do pose some risk. Tyres are a good example. Tyres on many vehicles need to be replaced in less than five years. Vehicle safety inspections have been a good way of ensuring worn tyres are replaced. Without inspection for another two years, the risk of some drivers driving on dangerous tyres has increased.