The SA Government has approved a 2.9% rise in compulsory third party (CTP) premiums for this financial year, prompting concerns drivers will be worse off.

Drivers will pay a standard premium of $389 for a metropolitan passenger vehicle, up from $378 last financial year.

The CTP rise is above the Government’s 1.7% annual indexation factor for fees and charges this financial year.

“Not all fees and charges are increased through the annual adjustment process,” the Government says in its 2016/17 budget statement. “Adjustments to certain fees and charges are determined as a consequence of specific policy decisions.

“Fees and charges are typically adjusted by the indexation factor and then rounded to an administratively convenient amount.

“This results in the increase of some fees and charges being smaller or greater than the indexation factor. “

Shadow Treasurer Rob Lucas says Premier Jay Weatherill and Treasurer Tom Koutsantonis have reneged on a pledge to keep CTP premium increases in line with inflation, which the Government has estimated will be 1.75% this financial year.

“Mr Koutsantonis must now explain publicly why he has broken his promise to ensure CTP premiums would be restricted to only ‘CPI-like’ increases,” Mr Lucas said.

Insurance Council of Australia GM Communications and Media Relations Campbell Fuller told insuranceNEWS.com.au the SA Government has the discretion to decide premiums “during the three-year transition to a fully competitively underwritten scheme”.

Under the current partially competitive CTP system, more than 1 million SA motorists are allocated to one of four insurers: QBE, AAMI, SGIC or Allianz.