APPENDIX 4

APPENDIX 4

Allegations about Senator Helen Coonan

The Hon. Senator Helen Coonan, former Minister for Revenue and Assistant Treasurer in the Howard Government, was mentioned in this inquiry in two ways:

  • There were allegations that Senator Coonan had received favourable treatment in her own building dispute in 2001-02. The implication was that this was done to induce her to form a good view of privatised home warranty insurance.[1]
  • There were allegations that Senator Coonan's position either as a minister or as Chair of the Senate Regulations and Ordinances Committee, around the time that Corporations Regulation 7.1.12(2) was made, has some suspicious significance.[2]

 

Senator Coonan's building dispute

Vero advised that Senator Coonan made a claim in relation to defective building works in March 2001 (when the NSW first resort scheme was still in force). Inspection reports noted significant defects. Vero accepted the claim.  The quote for rectification exceeded $340,000. Vero paid $200,000 in June 2002 as that was the limit under the policy.

An internal review of the decision was undertaken in December 2002 following allegations in the media that Senator Coonan had received preferential treatment. The review concluded that there was no evidence to support the allegation.

Vero advised that, contrary to claims in evidence at this inquiry, [3] paying the policy limit of $200,000 was not particularly rare. In the period April 2001 to June 2002 Vero paid 18 claims on single dwellings at or near the $200,000 policy limit.

Vero noted that suggestions that a $200,000 payment was irregular, on the grounds that 'the insurance pays only 20 per cent of the contract value',[4] are unsound because:

  • Senator Coonan's policy was issued before the 20 per cent cap came into force;
  • in any case, the 20 per cent cap only applies to non-completion, not to rectifying defects.

Vero advised that the builder concerned has been the cause of about a dozen claims, including three claims for the maximum amount.[5]

 

Senator Coonan and Corporations Regulation 7.1.12

It was suggested that Senator Coonan was 'responsible for this area' around the time Corporations Regulation 7.1.12 was made, and that this has some suspicious significance.[6]

Corporations Regulation 7.1.12 was made on 8 October 2001, at which time Senator Coonan was not in the ministry. It came into force on 11 March 2002, at which time the responsible minister was the Parliamentary Secretary to the Treasurer, Senator Ian Campbell.[7]

It was further suggested or implied that there is some significance in the fact that Senator Coonan was Chair of the Senate Regulations and Ordinances Committee around the time the regulation was made.[8]

This misunderstands the role of the Regulations and Ordinances Committee. The committee scrutinises regulations against general criteria, such as whether the regulation is in accordance with the authorising act, or whether it trespasses unduly on personal rights and liberties.  The Committee does not consider policy aspects.

In any case Senator Coonan was not on the committee at the time the committee considered these regulations (on 11 March 2002). [9]

Senator Coonan's comment on this matter is attached.

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