Nick McKim (Tasmania, Australian Greens) | Hansard source

I indicate at the outset that the Australian Greens will be supporting this legislation, the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. But in saying that I want to say this is a pretty extraordinary piece of legislation that's currently before the Senate. The Assistant Treasurer—a member of the Liberal Party, supposedly a flag-bearer for the free market—has introduced a bill that will nationalise reinsurance for cyclone and related flood damage to residential and business properties. We shouldn't beat around the bush here; we are proposing to nationalise a section of the reinsurance market in Australia—that is, the taxpayer takes on the financial burden of offering reinsurance in some circumstances in some parts of Australia. This is from a party that brands itself as the flag-bearer of the free market.

The reason the Liberal Party has had to introduce this legislation to nationalise reinsurance for cyclone related damage is tens of thousands of homeowners and businesses can no longer afford to insure their property. Why can't they any longer afford to insure their property? Because cyclones are becoming more intense and causing more damage. And why is this happening? It's happening because our climate is breaking down around us. And what is turbocharging climate change? That's right—the policies of the current Liberal government.

We're going to see a budget brought down in a few short hours. I will make a prediction—and I will put my house on this prediction coming true: there will be somewhere in the region of $10 billion, in each and every year this budget covers, of subsidies to make burning fossil fuels in Australia cheaper. There will be public subsidies for fossil fuel combustion, turbocharging the climate crisis.

This bill is on the front line of the climate emergency. This bill may be extraordinary but what is anything but extraordinary is that this bill, of course, is half cooked. Instead of responding to the breakdown of our climate in an urgent and holistic way, this bill demonstrates how ad hoc, how hypocritical and how artificial this government is. Remember: this is a government—the Liberal-National coalition—that has spent eight years actively hastening the breakdown of our climate, turbocharging it by pumping public subsidies into encouraging people and corporations to burn fossil fuels. This is a government that has done nothing meaningful in that time to prepare our country for the inevitable impacts of climate change that scientists have been warning about for decades, whether they be floods, bushfires, rising sea levels, storm surge or any of the other eminently predictable and very comprehensively predicted impacts of climate change. This government has effectively done nothing to prepare us for those things because it is made up in part of people who deny that human-induced climate change is even a reality, and it is a government that relies on massive donations from fossil fuel corporations in order to run its upcoming re-election campaign.

You've got a situation where, in the face of skyrocketing insurance costs that are clearly the result of our climate breaking down, the government has introduced a bill to nationalise reinsurance, to remove reinsurers' profit margins from the cost to consumers—but only for a particular class of climate change driven disasters and only for a small group of climate change related disasters that are in a particular part of our country. Undoubtedly no-one has felt the impact of the breakdown of our climate on their insurance premiums more than residents and businesses in cyclone affected areas, but that doesn't mean that people who do not live in cyclone affected areas are not feeling the impacts of climate change on their insurance costs. Climate change is not just impacting on insurance costs in flood-prone areas; in my home state of Tasmania, people are paying more on their insurance premiums because of increased bushfire risk. What is causing increased bushfire risk? That's right: climate change.

If this government were serious about addressing cost pressures on reinsurance, and therefore cost pressures on retail insurance, they would come into this place with a comprehensive plan to nationalise reinsurance in Australia for any so-called natural disasters that are happening, or are made worse, because of climate change. We know that climate change has impacted so tragically on so many people so recently in our country. In fact, right now as we debate this legislation, people in Lismore and the surrounding areas, who did it so tough just a few short weeks ago, are again being evacuated from their homes in some places because of the next round of climate change driven rains and floods.

I'll make the blindingly obvious point to members, because it needs to be said. None of these floods that are happening right now in Lismore and surrounding areas—or the floods that happened in the Northern Rivers area and the Brisbane area a few short weeks ago—are officially cyclone related. So this bill would not have provided relief from insurance premium pressures caused by these floods, because these floods are not the result of a declared cyclone by the Bureau of Meteorology. This shows the complete lack of understanding from this government about the real cost pressures facing Australian people right across so many parts of the country as a direct result of climate change.

This legislation is the front line of the climate emergency, and—surprise, surprise—a government that has failed at every hurdle in addressing the breakdown of our climate and preparing our country for the inevitable and predicted impacts has once again responded in a half-cooked way. This legislation is out of date before it's even been legislated. In fact, under this legislation, under the government's plan, people in Queensland and New South Wales who've just been hit by floods and, in some parts, are being hit by floods right now as we have this debate, will effectively be underwriting insurance for those living in cyclone-prone areas, along with the rest of the country. That's how half-cooked this legislation is.

Furthermore, this bill should be—but unsurprisingly is not—accompanied by a coherent strategy or serious investment of public funds to help Australia's communities better protect themselves against the impacts of climate change. Insurers, regulators and academics have been saying for years—and it was reiterated recently during the Senate inquiry into this bill—that this is of paramount importance. Only three per cent of government spending on climate disasters in Australia goes towards mitigation and prevention. This bill provides more of the cure, but where, we have to ask, is the prevention? As I said, a properly conceived government reinsurance pool would cover all climate related disasters across the entire country. That would be a holistic and equitable response.

All Australians should be able to enjoy the cost savings of a government scheme that removes the profit margin from the cost of reinsurance. But, more than just being fair, a fully national scheme would make the risks of climate disasters transparent to government, which would make it in the government's interest to invest in the public works that are so desperately needed to help keep insurance costs down. Full nationalisation of reinsurance against climate disasters would be a collective response to a collective problem, and that is what the Australian Greens believe should be happening.

To that end, we'll be seeking the Senate's support for a number of amendments that would make this bill more equitable and improve its effectiveness. Our amendments on sheet 1559 would immediately expand the scope of the bill to cover all flood damage so that, for example, people in Queensland and New South Wales, who have been so terribly impacted by current and recent floods, would be provided with immediate support. The amendments on sheet 1569 would include damage to motor vehicles from cyclones and floods, which is important given that a number of insurers package together home and car insurance. Our amendments on sheet 1570 would require the statutory review of the act to consider the expansion of the scope of the scheme to include any and all climate related disasters. Finally, our second reading amendment, on sheet 1581 revised, requires that the $10 billion to establish and maintain the reinsurance pool be derived from taxation on entities extracting and combusting fossil fuels. I therefore move:

At the end of the motion, add ", but the Senate is of the opinion that the funds required to establish and maintain the reinsurance pool should be derived from taxation on entities extracting and combusting fossil fuels".

Let's be clear: this would require that the funding to establish and maintain a nationalised reinsurance pool, which is going to be allocated out of the public purse, would be derived by taxing companies that extract and burn fossil fuels. We have to be upfront: it is the extraction and burning of fossil fuels that is the primary driver, on a global scale, of the breakdown of our climate. Corporations have profited massively and obscenely from extracting and combusting fossil fuels for so many decades now, whilst, for many decades, we knew exactly what the impact of burning those fossil fuels would be.

Those who do profit, and have profited, from the burning of fossil fuels should be made to pay for the costs of the breakdown of our climate. That is why we believe that the $10 billion that will establish and maintain the reinsurance pool created by this legislation should be derived by taxing the fossil fuel corporations. I can indicate that, regardless of the success or failure of any of our amendments, we will maintain our support for this legislation.