The Australian Amusement, Leisure and Recreation Association (AALARA) has pledged to push on with its proposed discretionary mutual fund (DMF) to address the insurance crisis facing its members, despite a Federal Government decision not to back it.

AALARA President Shane McGrath says the peak body was told the Government will not be supporting the insurance solution, one that has been flagged as the “only suitable” answer to the industry’s premium affordability challenge by the Australian Small Business and Family Enterprise Ombudsman.

“We were certainly expecting the Government to back its own report and provide us with some funding to get it off the ground,” Mr McGrath told insuranceNEWS.com.au today.

“We’re not taking ‘no’ for an answer. We are certainly looking for them to reconsider their position and we’re certainly calling on the Opposition to provide some bipartisan support as well.”

A Government spokesman says it is considering the recommendations of the Ombudsman on the “most appropriate” mechanism to support the industry.

The Ombudsman concluded in a final report in December that AALARA’s plan offers the only suitable answer to an industry that has been struggling to secure public liability insurance as premiums have soared sharply, in some cases by as much as 200%.

But the final report also says operating a DMF is not easy as it requires exceptional governance practices, including ensuring an appropriate balance of member representation with independent directors and specialist expertise.

Ride operators in NSW and Queensland recently took part in a 15-minute ride stoppage exercise to highlight their insurance challenges. For many in the industry, public liability insurance is mandatory for them to carry on operating.

“The show must go on,” the Showmen’s Guild of Australasia says in a Facebook post. “We need our mutual fund recognised as sufficient insurance for councils and trust.”

Mr McGrath says AALARA is now looking to regroup and work proactively with the Government and Opposition to find support for the DMF plan.

“We think the DMF – and the Ombudsman supports our position – provides the best strategic solution to the industry long term,” Mr McGrath said.

“We’ve invested significant member funds in the feasibility study. The Government’s own report suggests that this is the right solution. We’ve got to see this through.”