Terrorist acts against motor vehicles and buses in South Australia will not be covered by compulsory third party insurance (CTP), sparking criticism that victims could be left without compensation.

Changes to the Motor Vehicles Act 1959 to exclude CTP cover for acts of terrorism involving motor vehicles passed the state’s Lower House last week.

The amendment clarifies the state’s responsibility if a person is injured in a terrorist attack on a vehicle and is in line with similar exemptions in NSW, Queensland and Tasmania.

Treasurer Kevin Foley says the state simply can’t afford to fund claims arising from a terrorist attack. “The clear intent of this legislation is that the Motor Accident Commission cannot and would not have the financial capacity to be an insurer for personal injury claims that may arise from a terrorist activity,” he told Parliament.

“Depending on the severity of such an act, the Motor Accident Commission could be bankrupt, so to speak, although it has a Government guarantee. But it could be insolvent, so the entity itself would be crippled overnight.”

Metropolitan train and tram passengers are excluded from CTP, and cover is provided through the SA Government Captive Insurance Corporation. The Opposition wants a guarantee that victims of a terrorist attack would have their medical bills met by the state. But Mr Foley says the Government needs to take a flexible approach to act fairly and with compassion.