IBNR Rally 2 – 24 August 2003
The details of the IBNR levy would be well known to most of you.
Despite our motion at the meeting on 20/7/03 for the Federal Government not to proceed with the levy we now know that from next week you will receive a bill for 50% of your 2000-2001 medical indemnity premium.
There have been some concessions as a result of the previous meeting. These relate mainly to doctors 65+ who will be retiring.
There is also an option being provided for the levy to be deferred. However the details of this option are still being worked out.
It is not an exaggeration to say that many of the rules and regulations of this levy are still being drawn up.
Remember, this is a levy for a liability that has not yet emerged.
This is a levy based on a future liability of $415 million, determined not by claims but by actuaries assessment of future claims.
This is a levy that never should have happened if governments state and federal would had acted earlier to stop the system being run into bankruptcy by needless litigation and excessive payouts.
We are told the taxpayers interest must be protected. Governments must balance the books. But currently the Commonwealth Public Servants Superannuation Fund has $89 billion worth of unfunded liabilities
The IBNR levy is a tax, (and it is a tax if unpaid will attract the full penalties of the taxation system) is radical surgery and the surgery will leave a scar on the minds of many hard working medical practitioners who believe they have done nothing wrong to be placed in this position.
The Australian Doctors’ Fund has further concerns. Levies are addictive. Today’s special levy becomes tomorrow’s taxation system. How many other bureaucratic empire building pipe-dreams could benefit from a levy on doctors.
Who will administer your IBNR fund? Who will scrutinise the administrative charges? (We have already been told that there will be an additional interest charge on the fund if required to meet revenue targets).
Will we see an annual report and board level accountability? What representation will the payers have on the organisational structure that manages this fund?
If the Tort Law Reforms are going to work, as early indications believe they could, then the IBNR should be greatly reduced, but no-one should be complacent.
The Australian Doctors’ Fund will be here for the long haul. It’s going to be a longer campaign than we had hoped for, but perhaps, if anything, it’s the wake up call we had to have, driven by the levy we should never have had to have.
Thank you
Stephen Milgate
