A bill requiring the Insurance Commission of WA to pay dividends will push up premiums, state Shadow Treasurer Ben Wyatt says.

“It is just a cash-grab because [the Government’s] budget position is precarious,” he told insuranceNEWS.com.au after legislation was introduced to Parliament on June 13. 

WA’s lower house may pass the bill this week, aligning the commission with the dividend requirements of the state-owned Water Corporation of WA and Western Power.

The commission provides compulsory third-party (CTP) cover for motorists and handles the risk management arrangements of WA public authorities.

Mr Wyatt says the legislation could burden the commission with a 65% payout ratio, based on levels paid by state-owned utilities, and reduce funds available to offset underwriting losses.

“It will have the effect of forcing up CTP insurance premiums.”

Treasurer Troy Buswell says dividend payments by publicly owned businesses help eliminate resource allocation distortions.

“It is the Government’s view that, like all government trading enterprises, the Insurance Commission should be subject to a dividend policy,” he told Parliament.  “All we will be doing is applying consistent treatment.”

He says the commission’s board will be able to recommend a zero dividend if necessary.