Ben Johnston owns venues in both the ACT and NSW, so he can provide a unique perspective at the inquiry. Photo: Liv Cameron.
The ACT Legislative Assembly has announced it will launch an inquiry into the rising costs of insurance premiums in the Territory and the impact on businesses.
The Standing Committee on Economics, Industry and Recreation will investigate issues such as public liability, the cause and effects of differences between premiums in different states and territories, and the impact of climate change on insurance costs.
Recent data from regulator Safe Work Australia indicates that insurance premiums in the ACT are much higher than in NSW across almost all industry groups.
Ben Johnston, who owns both the Old Canberra Inn and the Steampacket Hotel Nelligen in NSW, has welcomed news of the inquiry and provided some insight into why things are tougher for business owners in the Territory.
“There is a big difference between ACT and NSW, and that is there is unlimited liability for workers’ compensation in the ACT,” Mr Johnston said.
“That means there is no end to where a claim can end up.
“This in turn leads to less insurers wanting to supply that type of insurance, so you have less competition and higher premiums for business.
“You don’t get as many places with ambulance-chasing lawyers and there’s a reason for that. It creates an environment for certain people to put in false or exaggerated claims.
“If an employee has an accident, you want them to be looked after. But this can be done effectively with caps in place, as there are in other jurisdictions.
“There’s a significant difference between the NSW and ACT; costs are at least 50 per cent higher in the ACT.”
Canberra Business Chamber chief executive Greg Harford also wants to see the inquiry put the spotlight on workers’ compensation.
“The chamber is hearing about huge price hikes for workers’ compensation insurance, and members report that it is substantially more expensive here in the ACT than in NSW or other jurisdictions,” Mr Harford said.
”On the face of it, there’s no good explanation for this, but it does put ACT businesses at a competitive disadvantage compared to firms in other states.”
Canberra Business Chamber CEO Greg Harford is keen for the inquiry to get underway. Photo: Canberra Business Chamber.
The peak body is also eager to see the inquiry get underway.
“The Canberra Business Chamber has been advocating for action on the cost of business insurance in the ACT, and we are really pleased that the Legislative Assembly’s Standing Committee on Economics, Industry and Recreation has announced it is undertaking an inquiry,” Mr Harford said.
“Insurance is critical for any business because it helps them manage risk and deliver services to customers, yet the costs are increasing sharply and are growing beyond the ability of many firms to pay.
“In the Canberra Business Beat report for the September 2024 quarter, most businesses reported that their insurance costs are rising fast and well beyond the cost of inflation. Forty-four per cent reported premium hikes of more than 20 per cent over the previous two years.
“Increases in insurance premiums ultimately translate into price increases for customers and make it harder for businesses to operate sustainably.”
Public submissions to the inquiry are due by 14 March. More information can be found on the inquiry website.
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