Critical NRMA elections
Members of the NSW motorists' association, the NRMA, are currently voting for eight of the 16-member Board of Directors. The key question facing the 1.8 million members is whether the NRMA's insurance operations should be privatised. The NRMA is best known for the excellent road service it offers members, coming to the rescue when cars break down, batteries are flat, keys are locked in the boot, etc. The cost of this important service is shared by all members through the payment of a uniform membership fee regardless of type of car, its age or condition. In addition, the NRMA offers members a range of other services including vehicle inspections, motoring advice, travel bookings, road safety research as well as a lobby for motorists. As a mutual, not-for-profit organisation, NRMA Insurance has ploughed back any surplus into the organisation. As a result members have benefited from rebates on their insurance premiums, making it highly competitive compared with other insurance companies. Because NRMA Insurance's prime aim has been to serve members, not return fat dividends to shareholders, it has built up considerable loyalty amongst its policy holders. Compared with its private sector rivals the NRMA gained a reputation as fair in handling claims and in its treatment of staff. Things began to change in the early '90s when there was a push to demutualise the NRMA by floating it on the stockmarket. An attempt to float was made by a majority of the Board in 1994. Board members Richard Talbot and Dawn Fraser successfully blocked the attempt in the Federal Court which found the Prospectus (for floating NRMA's insurance group) was a deceptive and misleading document. Around $30 million of members' funds were wasted by the Board in the privatisation attempt. Although the privateers were defeated then, they did not abandon their aim, and management continued with internal changes in preparation for privatisation. Staff, in particular, have experienced a change for the worse in their "workplace culture". Privatisation will affect everyone, not just NRMA members. NRMA insurance will rise to "what the market can bear", and other insurance companies will charge more as they will no longer be constrained by a cheaper competitor. It will become much tougher when making claims and NRMA's staff will find their workplace is no different to any other private insurance company where profits dominate everything and workers and customers come last. The road service could suffer and cost more, fees could be introduced for roadside attendance and the number of NRMA outlets be reduced as the special relations between motorist services and insurance disappears. (They currently have joint facilities and promotional material.) "One person (member) — one vote" will be replaced by "one share — one vote". Those accumulating the largest numbers of shares will take control of the board away from NRMA members. Forget any "guarantees" limiting ownership by financial institutions or foreign investors; these will sooner than later go out the window. Then it will be merger and takeover time by the big (most likely foreign) financial institutions. At present the majority on the Board in favour of demutualisation is nine to seven. Five of the nine pro-privatisation members are up for re-election, as are three of the seven anti-privatisation members. Vote mutual There are two groups supporting the retention of the NRMA as a mutual — the Motorist Action Group (MAG) headed by Richard Talbot and the Members' Mutual with Jane Singleton. The MAG, formed in 1988, strongly opposes demutualisation. Its members on the Board have a proven record of supporting the NRMA as a mutual organisation. "The NRMA should be run as a mutual. Half of each year's profits should be returned to members via cheaper insurance premiums", said Board member Richard Talbot. (Mr Talbot is not up for re-election this year.) The last three years' profits come to $1 billion. The Members' Mutual was formed more recently following the first attempt to demutualise the NRMA. There is a range of candidates standing for each of these teams, and it is likely that some from each team will be elected. It is a first-past-the-post election, no allocation of preferences. Nick Whitlam's "Members First" group and "Members' Voice" (claiming to be independents) candidates are pro-privatisation despite the false impression given by their titles.