The Victorian Government’s foot-dragging approach to tort reform has brought the insurance tax issue back into the spotlight. The assault, led by Federal Small Business and Tourism Minister Joe Hockey and new Victorian Shadow Attorney-General Victor Perton, is full of political vitriol but still raises questions about the Victorians’ reluctance to act.

Speaking in Federal Parliament last week, Mr Hockey said Victoria is the only state that has done nothing on public liability reform, although yesterday it did finally announce some limited moves. Pointing out that Victoria has the “highest state taxes on insurance in any jurisdiction in the whole world” – a fact he was alerted to by the ongoing NIBA taxation campaign – Mr Hockey added:

“Why would Steve Bracks want to introduce competition into the Victorian insurance market and reduce premiums, when for every dollar that is charged, Steve Bracks receives 40 cents in taxes?”

He linked the inaction on tort reform to the decision by Suncorp subsidiary GIO to exclude Victorian small business from its recently launched public liability insurance products.

Mr Bracks and his Attorney-General, Rob Hulls, are also under pressure from business groups to match other states’ reforms. “While all other mainland states have pressed ahead with such reform, the Victorian Government appears to have sat on its hands,” Victorian Employers Chamber of Commerce and Industry CEO Neil Coulson said.

However, the reforms announced yesterday include capping general damages for personal injury at $360,000 capping loss of earnings awards and restricting recovery of legal costs in minor cases.

Mr Hockey added a personal edge to the debate when he questioned whether the “close working relationship” between Mr Hulls and the Australian Plaintiff Lawyers Association has anything to do with reforms being delayed. The announcement appears to have appeased the Government’s business critics, although Mr Coulson indicated a continuing preference for a national approach.

Mr Perton, only recently appointed Shadow Attorney-General, said Mr Hockey was “spot-on – the Bracks Government is characterised by indecision, and tort reform is wrapped up in indecision”.