Government on track to reduce SGIC insurance deficit due to WA Inc losses

5/2/95

Premier Richard Court today said that the State Government was on track to reduce the SGIC third party insurance deficit due to WA Inc losses by a further $52 million this financial year.

"This will bring the overall deficit to $217 million, which is a reduction of $113 million since 1993, when third party premiums were increased by $50 to pay for the fund's deficit, which stood at $330 million when the Coalition entered office," Mr Court said.

"Without the injection of these additional funds through the $50 premium, the SGIC would have been unable to pay hospital and medical costs incurred in road accidents.

"Motorists will now be receiving in their licence renewals a leaflet outlining this deficit reduction, which will updated every year in line with the Government's commitment to keep motorists informed of the debt reduction program."

The Premier also released State Treasury figures which showed that the total cost of losses suffered as a result of Government WA Inc dealings totalled over $1,515 million.

"These figures reveal that WA Inc has cost each family in Western Australia at least $3,540 with potential further costs if outstanding legal actions against the State are successful," he said.

"The losses to date are more than the entire amount of money the State Government will spend on health this financial year which is the largest budget item.

"This is the first time that the State Government of WA has calculated the total cost of WA Inc and was done so in response to a series of questions asked by David Smith MLA, the Member for Mitchell.

"These losses do not include further claims in the courts against taxpayers as a result of other WA Inc business deals which total more than $100 million. The State Government is currently defending these claims in the courts.

"This $1,515 million in losses is attributed to the following agencies:

GESB - $139 Million

SGIC - $492 Million

BankWest - $39 Million

General Government - $845 Million

"These costs do not include the $30 million cost of the WA Inc Royal Commission, various legal costs or less quantifiable WA Inc transactions such as the purchase of Fremantle Gas and Coke at arguably inflated price.

"More importantly, they do not include the lost opportunity cost to the State had this money been invested on behalf of taxpayers."