State grabs insurance profits
Profit grab: Colin Barnett and Troy Buswell. Picture: Sharon Smith/The West Australian

The State Government decided last October to take $140 million of dividends out of the Insurance Commission of WA - and booked that revenue in the State's accounts - but never publicly spelled out that policy change until after the March State election.

A law to allow the Government to take up to 65 per cent of ICWA's profits was rushed into Parliament in June as one of the first pieces of legislation in the Barnett Government's second term.

ICWA is the State's compulsory third-party motor vehicle insurer and runs RiskCover, which insures government agencies.

The dividend law was controversial because the RAC, ICWA's former chairman and the State Opposition believe taking surplus funds out of ICWA will put upwards pressure on compulsory third-party insurance premiums. The Government has denied this.

The RAC was so concerned about the plan that it sought assurances from Colin Barnett in the lead-up to the State election that it would not seek dividends from ICWA. In a letter dated January 10, the Premier replied that the law did not allow for it.

In June, Mr Barnett told Parliament the Government made the decision to change the law after the March election.

"It (the decision) was taken in recent weeks. It was made after the election, simple as that," Mr Barnett said on June 13.

But supplementary information provided to the Opposition this week after Budget estimates reveals the Government took a "policy decision" to subject ICWA to a development payment in October last year. This policy decision led to Treasury incorporating the impact of the decision on the State's finances - an increase in revenue of $141.7 million over four years - in the December midyear financial review document.

Though the revenue was incorporated in "whole of government" financial aggregates, the decision was not spelt out in commentary in the midyear review that details policy changes that have a material impact on the State's finances, contrary to the usual practice.

Treasurer Troy Buswell said yesterday the relevant legislation governing the midyear review "does not specify how Cabinet decisions are to be disclosed".

He and Mr Barnett denied directing Treasury to remove explicit references to the policy decision from the midyear review.

In question time, Mr Barnett denied he had misled Parliament with his June comments that the decision had been taken after the election.

Opposition Leader Mark McGowan said the Government had "hid the truth".

The West Australian

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