TUESDAY, 8 MARCH 2016
SUBJECT/S: CommInsure Scandal; Budget Timing
CHALMERS: No Australian should be treated in the disgraceful way that CommInsure treated its customers. Your heart goes out to those people who, at their lowest point, were treated in this appalling fashion by CommInsure. People who had the right to expect better having been long-term policy-holders.
We need to get to the bottom of this. We need the CEO of the Commonwealth Bank to front up to the Senate Inquiry. We need to make sure that ASIC has the resources it needs to properly investigate what is going on here. Once we know what the Senate and ASIC uncover about these practices, then we are prepared to talk to the Government about a possible Royal Commission.
Australians will find it very hard to believe that these are somehow isolated incidents. As we get to the bottom of these issues uncovered this week, we do need to know whether we're dealing with something which is systemic within CommInsure and perhaps even more broadly than that.
This is part of an industry does not even have a Code of Conduct or a Code of Practice. That work is happening at the moment. We need to see that work sped up. We need to ensure that there is a robust, proper Code of Conduct for this industry, so that Australians can have the confidence that they need to take out policies and to have the confidence that if things go wrong, those policies will be honoured.
Already in Australia, we have a problem of underinsurance. We can't have a situation like this, which rocks confidence in the industry, further increase a problem that already exists in the Australian community.
We need Australians to have the confidence when they take out a life insurance policy or an insurance policy at all, that the policy is worth the paper it's written on. These revelations do seriously question, for a lot of Australians, whether that insurance policy that they've taken out is worth the paper that it's written on.
The second issue I wanted to deal with was the timing of the Budget. We've had today the Prime Minister say that the Budget will be in May at some stage. He was asked very directly whether the Budget which has been locked in for May 10 will be delivered on May 10 and his answer was that it will be delivered sometime in May. The Prime Minister has now given thirty-one possible days for a Commonwealth Budget. This is a complete farce.
The economic policy-making machinery in Australia has ground to a halt. The Prime Minister is unable to even tell the Australian community when the Budget might be. It has descended into a complete farce of chaos and confusion while the Government tries to work out a) whether it has an economic plan, and b) when that economic plan might be delivered. Over to you.
JOURNALIST: With regards to CommInsure, what would a Royal Commission achieve that a Senate Inquiry can't?
CHALMERS: Well we need to get the sequencing right. We've got the Senate Inquiry underway. We do have ASIC investigating these very serious revelations. Once we discover or once those processes uncover what's happening here at CommInsure and perhaps more broadly, then we'd be prepared to talk with the Government about a Royal Commission, as I have said.
It's very interesting when you think about a Royal Commission that this is a Government which is very quick to pull a trigger on Royal Commissions when it's about their political opponents. It will be very interesting to see after the conclusion of the Senate process and the ASIC process whether they have the stomach for a Royal Commission into something as fundamental as whether or not Australians can trust the insurance policies that they pay for and take out.
JOURNALIST: Do you think this is just the tip of the iceberg?
CHALMERS: Well we need to get to the bottom of it. We need to know whether this is just the tip of the iceberg or whether there are other issues at play. I think Australians will find it very hard to believe that this is the sum total of the problems in the insurance sector. We need to understand how systemic this problem is within CommInsure and perhaps more broadly.
JOURNALIST: Should policy-holders have someone other than the media or the courts to go to when they have problems and disputes?
CHALMERS: There is a range of complaint mechanisms and dispute mechanisms, but they have obviously failed the people on this program this week. I think anybody who watched that program could have only felt the heartache that these people have felt having been policy-holders for so many years, seeing their claims delayed and denied and messed around with. So we do need to make sure that we've got the right robust complaint mechanisms for people to go to. It shouldn't take revelations on Four Corners on a Monday night for people to get justice in life insurance and the insurance sector more broadly. So that's one of the things I'd be very keen to see the Senate Inquiry and ASIC look into -- to make sure that people get what they pay for and can have the confidence in the insurance that they take out that it's worth the paper it's written on.