Warren Entsch (Leichhardt, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. I have to say, before the member for Kingsford Smith leaves the chamber: this hasn't been a nine-year journey. The first time we had the opportunity of fixing this catastrophe was back when I approached his Treasurer, Wayne Swan, 11 years ago, pleading with him to establish a reinsurance pool. So let's not come here and suggest this is something that has been ignored by this government. It goes way back, 11 years ago, to when we first approached Wayne Swan, as the Treasurer, and he rejected that claim at that time.

At the time the argument was that there was no market failure and that governments could only intervene if there was market failure. Because the insurance companies were vehemently opposed to it the Insurance Council of Australia wanted nothing to do with it, so they refused to cooperate—in spite of the fact that I was getting calls like the one from Mark Cromwell, from the Ferntree Rainforest hotel, located in Cape Tribulation. In 2018 it was $10,000 for their insurance. In 2019 it was $100,000 for their insurance. In 2021 it was $200,000 for their insurance. When you've got 27 staff, there is no point in trading anymore with the risk versus profit. I got a call from Christine Walker, from North Shore Towers. Their premium was $350,000 this year, with a $200,000 excess for named cyclones.

The good thing about this, of course, is that these people were still able to get insurance. I have to pay tribute to one of them—Margaret Shaw, who provided information to me. She said that insurance is being charged at horrendous rates. Prior to the GFC $800 to $900 per unit per year was the norm. It has gone to $4,000 to $5,000 per unit, which is not uncommon, and $5,000 to $6,000 is not unusual. For two complexes, one in Townsville and the other in Mackay, it has gone to $7,000 to $8,000 per unit. One complex in Airlie Beach is currently paying $11,000 per year per unit, and another one on Hamilton Island is reportedly paying $38,000 per unit per year for insurance alone. This is where they started to get the problems coming in. It was after that that we started to see an absolute failure in strata insurance.

So don't come in here with this nonsense that this was a coalition problem; the coalition has actually solved this problem. I see Minister Sukkar here; thank you very much indeed. I would also like to thank the Prime Minister and the Treasurer for the outstanding job they have done and for listening. I'd also like to acknowledge my colleagues. We have the member for Herbert here. The member for Dawson was another one I worked with very closely on this.

I have some reports here. The Pivot north report, from 2014, recommended that we move on insurance in northern Australia because it was looking like the market was going to fail. The Unleashing our tourism potential report, from 2018, called on government to deal with the problem. So this is not a new problem, but this is a problem we needed to have. I was desperate, over the 11 years of this journey I have been on, to make this happen.

This is a new thing that we are doing now for Australia. I appreciate what we've done. I appreciate the fact we've extended it to marine assets as well, which will come in 12 months later. While there is a review in three years time, I really appreciated the minister's commitment to do a review in 12 months. That is absolutely critical, because that will see whether or not it is working and whether we need to make adjustments on who needs it one way or another. I thank the minister for his commitment to do that. At this stage there are commitments there for very significant savings. We've got to make sure that these companies come back into the market. Up until recently, a lot of people could get no access to insurance at all. Another thing in this legislation is that for the first time ever insurance cover is being offered to the Indian Ocean territories. Cocos and Christmas islands have had no cover ever. This gives them cover for the first time. They are part of northern Australia and they should be treated as such.

I've been asked to keep this quite brief, and I'm happy to do so, but this is something that has been an 11-year journey for myself. There's been a lot of pain over those years. This is a commonsense solution. I'm not going to guarantee that everything will work 100 per cent as this rolls out, but I can tell you that despite criticism from the other side there has been no contribution whatsoever to solving this. I welcome the fact that we have bipartisan support on it now. Let's stop throwing barbs. Let's start working together and making sure we get the best possible outcome for this so that we can roll this out. Maybe we'll see something here that can go out to other communities as well. I commend the bill to the House.

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