Thursday, 17 February 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022
I had hoped to rise earlier today in support of the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. This is probably the most significant bill brought forward in this place for northern Australia and North Queensland, and especially for places like Townsville. We heard from members of the government and the opposition, who were all relatively in favour of the bill. But I have to take issue with some Labor Party members from New South Wales, who stood up and were critical of what we've brought forward. Not one person from the opposition picked up the phone to speak to me about the market failure that we've seen in insurance—not one person. I spoke with the member for Leichhardt, the member for Dawson and the member for Kennedy. Those opposite just wanted to politicise and critique when people of North Queensland have suffered, but the people on the opposite side aren't from our area. They filibustered so that a few of us couldn't speak, but I am very happy that it has passed this House, and will go to the other place.
We've seen market failure of an essential service. The essential service is insurance. I call it an essential service because you need it like you need water. You need it like you need fuel. If you have a small business, you need insurance. If you have a household, you need insurance. If you have a strata title, you need insurance. It's something you must have. But in places like Townsville and in regions in North Queensland, we haven't been able to get insurance. Or the premiums have skyrocketed so much that people are choosing to sacrifice something else to get it. Or they are forgoing it altogether.
The member for Leichhardt has been on this journey for 11 years. It's a long time to be in a fight. When I got into parliament, he grabbed me straight away and said, 'What are your biggest issues?' I said, 'Crime and insurance.' He said: 'Yes. Come here, and let's talk about insurance.' It has been very positive to work with Minister Sukkar and the Prime Minister to come up with this reinsurance pool. This legislation will make a real difference in the lives and livelihoods of people in North Queensland.
Every day my office would get countless calls from people who have had their premiums jump 30 per cent, and I couldn't fathom how. We wanted to work with insurance companies and with people to help get insurance to a level that was acceptable. We'd hear one thing from insurers one day, and then another thing the next day. At the end of the day it hurt the people on the ground. Last year in Douglas, a suburb of Townsville, people had premiums of $2,777. In one year those premiums jumped to $4,213. That's a 51 per cent increase in one year. It simply defies logic how something can double in one year. It doesn't add up.
Other residents have shared how their renewals increased by 35 per cent in a year, despite making no claims. There has been no decent explanation from the insurance companies about why this has jumped so significantly. One resident wrote to me said: 'I recently received my house insurance renewal. No cyclones, no fires, no floods, no break-ins, no claims, but a massive 35 per cent premium increase. Surely nothing goes up by 35 per cent in one year—not even the building costs.' Another resident explained the process they'd been through to try to reduce their premium by shopping around: 'I've tried to attain other quotes for my modest, small, three-bedroom 1970 home and have received quotes ranging from $4,500 to $7,000. Lowering the house price by $50,000 doesn't have much of an impact either. I have a high-set home; it's not in a flood area. No storms. No major events. I've never made a claim.'
This price hike is ridiculous. That's why the government has come in to create the $10 billion reinsurance pool, so their premiums will not skyrocket any higher. The savings will be up to 46 per cent for homeowners, 58 per cent for strata properties and 34 per cent for small and medium businesses. This is a fantastic policy. The reinsurance pool will benefit all of North Queensland.
House adjourned at 16:59
The DEPUTY SPEAKER ( Mr Zimmerman ) took the chair at 09:59.