The NSW Government has allocated an extra $1.2 million to crack down on compulsory third party (CTP) fraud.

The State Insurance Regulatory Authority (SIRA) will use the cash, to be unveiled in tomorrow’s state budget, to identify suspicious activity and bring fraudsters to justice.

As insuranceNEWS.com.au previously reported, the NSW CTP scheme is undergoing a major review and a fraud taskforce has been established.

“Greenslip premiums for a Sydney metropolitan passenger vehicle range from $537 to $886 and fraud is contributing as much as $75 per greenslip,” Minister for Innovation and Better Regulation Victor Dominello said.

“The NSW Government is determined to make the scheme more affordable for drivers.”

Treasurer Gladys Berejiklian says the funds will increase the integrity of the CTP system and put downward pressure on prices.

IAG CEO Australian Consumer Division Anthony Justice has welcomed the announcement.

“Despite falling casualty rates and safer road awareness campaigns, the number of CTP claims in NSW increased by 39% between 2008 and 2014 and we have seen a 30% increase in just 12 months,” he said.

“What we know is that CTP fraud, which includes exaggerated claims and staged accidents, has significantly contributed to the increase in CTP claims and ultimately it’s NSW drivers that pay, through higher insurance premiums.”