House debates

Wednesday, 16 June 2021

Bills

Appropriation Bill (No. 1) 2021-2022; Consideration in Detail

12:52 pm

Photo of Matt ThistlethwaiteMatt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for the Republic) Share this | Hansard source

Australians are facing a perfect storm when it comes to their insurance premiums. The cumulative effect of climate change and COVID has led to dramatic increases in the cost of almost all forms of insurance in Australia. It's the cost of climate inaction. That's the cost of this government's lack of action on climate change manifesting itself in an increase in everyone's insurance premiums. So when this government says that there's no cost to its policies on climate change, it's wrong. You're all paying for it through your insurance premium and it's only going to get worse. In many regions throughout Australia insurance has now become completely unaffordable, particularly in the north of Australia. In the member for Eden-Monaro's electorate, you can't get insurance for bushfire coverage any more. In the Hawkesbury floodplain in New South Wales, on the Central Coast, in Bundaberg in Queensland, in Tasmania—in basically every state in Australia—there are regions where, because of the risk associated with climate change, it's now impossible to get insurance and it's going to get worse.

The government recently announced their northern Australia reinsurance pool. It's a $10 billion guarantee that they say will drive down premiums. My question to the government is: why has it taken eight years to take some action for the people of the north of Australia? They've been crying out for some action for the past eight years, and this government has done nothing. There have been numerous studies—three ACCC reports, a Productivity Commission report, a Small Business Ombudsman report—but all of their recommendations have been ignored. Every single one of those recommendations has been ignored, and they've made this announcement about the reassurance pool for which there is very little detail. Now the people of northern Australia are starting to say, as many people are saying about many things with this government: 'We think that they're all talk and no action. This isn't what it's cracked up to be.' The day after the announcement was made, my office received a phone call from a small business on the Central Coast, and that small businessperson on the Central Coast said, 'We face the risk of flooding here on a daily basis, on the Central Coast, and my business is now facing the prospect of not being able to afford insurance.' The question they asked us was: 'Will this reinsurance pool be extended to other regions where insurance is now unaffordable,' and that is my question to the minister. Will the reinsurance apply to the Central Coast, to Eden-Monaro and to other electorates throughout the country where insurance is now affordable? My second question is: when will this reinsurance pool come into effect? The government's announcement says that it will be on 1 July 2022. But government officials in estimates started to crab walk away from that commitment. It means that the residents of northern Australia could be waiting for many, many years longer before they get any relief from their skyrocketing insurance premiums. The people of northern Australia, given that they've been waiting for so long for action on this by this government, deserve a better answer.

The Morrison government says that it hopes that the northern Australia reinsurance pool will reduce premiums. The government is estimating that it will be $1.5 billion for household strata and small businesses north of the Tropic of Capricorn over 10 years. That equates to about 10 per cent. Let me tell you: if you're trying to insure your home and contents and the premium is about $9,000, I don't think 10 per cent is going to cut it. I don't think you're going to dispel that anger up there with a 10 per cent reduction on a big announcement like this that they've been saying would be the saviour to their issues. Where is the detailed policy work that you're supposed to do in government? The second issue is that the government says that this will be cost neutral over many years. So my question to the government is: if it is cost neutral, will this be paid for by a levy on the rest of the insurance holders throughout the country? Is the rest of Australia going to pay for this reinsurance pool? The third element is building in risky areas—in areas where there are floodplains and there is a known risk. What incentives are built into this scheme to ensure that people aren't encouraged to just build in risky areas because they've got the comfort of the reinsurance pool? Will there be incentives, like those outlined in the ACCC report, for new building standards around resilience—for a voluntary resilience register for insurers? Will any of these incentives be built into the scheme? (Time expired)

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