So sometimes existing laws need "helping", as imperfect as that may be.
Sounds like you've been indoctrinated good and proper. I'll write this one off as job creation.
If the only people who were allowed to drive cars were the ones able to afford enough insurance to guarantee recompense(2) in any situation, there would be very few cars on the road indeed.
I fear you've severely underestimated the nanny-ness of the state I'm referring to: http://en.wikipedia.org/wiki/Vehicle_insurance#Australia
Nevertheless, the "helping" you refer to isn't helping in reality. The first layer making it illegal doesn't work. Neither do the others layered over that.