Presented by Robert Clark MP		www.robertclark.net

RESCUE PLAN NEEDED FOR TAC AFTER $640M DOWNTURN

News Release - Thursday, 27th September, 2001

The Government must immediately develop a rescue plan to guarantee the long term financial viability of the Transport Accident Commission following its massive $192 million loss last financial year.

The loss was revealed in the TAC Annual Report tabled in Parliament yesterday.

The loss is a $640 million downturn in result compared with the $447 million surplus TAC recorded in 1999-2000.

The downturn was mainly due to a $446 million slump in earnings on investments, together with a $333 million leap in the actuarial valuation of compensation claims, offset by a $124 million fall its income tax expense.

As a result of the loss, the TAC will not be paying a dividend to the State Government this year, thus cutting into the Government's budgeted $509 million surplus.

The Shadow Treasurer, Robert Clark, said that the Government must immediately develop a rescue plan to reverse TAC's deteriorating financial position.

"TAC's finances remain in the black for the moment despite this loss, thanks to TAC's strong financial condition when Labor inherited it from the Kennett government," Mr Clark said.

"However, TAC's investment returns have almost certainly plunged further since 30th June, and may well now be negative, due to the falls in international markets.

"If losses of this level continue, motorists will inevitably be facing premium increases in future.

"The Government must find out why TAC achieved only an abysmal 2% return on its investments last year whereas the Victorian WorkCover Authority managed to achieve a 6.8% return. The Government and the TAC Board must then put in place a strategy to get TAC's investment returns back on track.

"The Government must also find out the reasons for the massive jump in claims liabilities, and develop with the TAC Board a plan to ensure that those liabilities are contained, particularly through careful management of long term claims."

"This is the second financial disaster which the Minister for WorkCover, Bob Cameron, has presided over.

"His bungled handling of WorkCover has helped inflict a $396 million increase in the burden on Victorian employers. Now motorists find that under his stewardship the TAC has gone from a $447 million surplus to a $192 million loss."