Alex White (Labour)

I support the recommendation and the idea behind it. It is important to make the distinction between the principle of introducing staged payments in, say, personal injuries accidents and the tax treatment of such payments. Although they are linked, these are slightly different. What I understand as being proposed is a very sensible progressive means of ensuring the tax treatment of such staged payments is appropriate and satisfactory and I agree with this as a sensible way to approach matters.

The general debate about the appropriateness of staged payments is one we still need to have. This is how they should be treated in the tax code rather than actually introducing them in this manner, as I understand it. I do not believe the change on its own could be brought about in a taxation measure such as the one Senator O'Toole rightly proposes. As a practitioner in the area I can see a good deal of merit in the idea of staged payments for plaintiffs in personal injuries actions. I would not necessarily agree that this should be the norm for all plaintiffs in those situations. Very often there is a high premium for someone who has been involved in a catastrophic road accident, a medical negligence action or whatever, and his or her professional advisers - medical, legal and financial - may need to be aware of the individual's competence to deal with a large sum in damages awarded by the courts and usually divided between general and special damages. Special damages tend to involve the biggest sum and arise where, for example, somebody needs to have his or her house changed or something done in order to accommodate their living conditions into the future. Contrary to what some might think about staged payments, there may be a high premium and people should understand at an early stage where they stand in terms of their future financial position. It is not as if staged payments would necessarily suit all requirements but, that said, very serious consideration should be given to the option of allowing judges to do this in particular circumstances, including those to which Senator O'Toole referred. Let us have that discussion and liberalise the position on this award. I would support such move. If it was done, the tax code would have to reflect it.

This is a prescient move by Senator O'Toole. If we can make such a progressive move in regard to the awards, this is the way the tax code should treat them. It would make a lot of sense.