Andrew Bartlett (Queensland, Australian Greens) Share this | Link to this | Hansard source

I'd like to speak about the government's response to the Economics References Committee Report, Australia’s general insurance industry: sapping consumers of the will to compare. This response was tabled earlier this week and there have already been some speeches on it.

I'd like to firstly relate it back to my comments on an earlier document about how disappointing the length of time the government takes to respond to important reports and recommendations is. The government's response to this report and this issue has been fairly disappointing. I particularly want to go to one part of this inquiry and how it relates to another report from another inquiry that occurred a couple of years ago: insurance premiums in the northern part of my home state of Queensland.

As senators would know, I've only been back in this chamber a few months and I'm still getting across the finer details of issues affecting people around the state. One issue was brought to my attention very quickly by a woman from Airlie Beach named Margaret Shaw—I expect many of us have got emails from her over the years—wanting to ensure that we're all aware that this problem of high insurance premiums in Northern Queensland has not gone away and has still not been adequately addressed.

It's not just a matter of high insurance premiums. Their premiums are much higher relative to other parts of the state and the country. It's also been the rapid rate of increase. If they'd always been high or they'd gradually increased, perhaps people could have adapted. There have been extremely rapid increases in insurance premiums for many people. This isn't just individuals in homes. It's also particularly affecting people in unit blocks with body corporates or strata titles. Of course, it also affects businesses—small businesses, in particular. Their ability to function, as any small-business person would say—at least the ones who work from a real-world premises rather than online—insurance for that premises can be a major cost. To have them go up so substantially and so quickly in such a short period of time has caused major harm and disadvantage to many people.

It doesn't take much imagination to think why. If you're a person on a fixed income, particularly a retired person, and you're living in a unit with a body corporate or strata title, you're required by law to have that property insured. If your premiums double or more in a short space of time, you suddenly can't afford your premiums. That has an impact on the value of the property, so people then lose value on their property because it's uninsurable or the premiums are so high that people don't want to buy it. It's put some people in an appalling bind. This isn't a problem with an easy solution, I'd have to say, but it's certainly a problem where more can be done than what has been done.

I want to point to the report that was brought down in November 2015 by the Northern Australia Insurance Premiums Taskforce. The government finally did a response to this. They did it in that typical—and, sadly, very cynical—way of releasing the response by the minister, Kelly O'Dwyer, in the week before Christmas. People in Northern Queensland were waiting two years and saying: 'What's happening with this? What are you going to do? What's your response? What's the action? It's urgent. We've been talking about it for years.' The government takes two years to respond and then slips it out just before Christmas. They obviously gave a heads-up to the insurance industry, though, because the insurance industry was out within a minute with a press release congratulating the government on their response, which was not to intervene in the insurance market at all. I'm not saying government intervention is the sole solution to everything, but when you have market failure on a massive scale, as has happened here, then clearly there is a role for government—or there should and can be a role for government—to play in intervening. That is something that the Greens certainly believe needs to be given much stronger consideration.

Unfortunately, with regard to this report, when the terms of reference were set up they were explicitly set up with the requirement that, when considering the options for action, the task force had to look at how any role of government involvement could be reduced. Even if they were to suggest or consider government intervention, it had to be on the basis of how the government could get out again as quickly as possible. So it had one hand tied behind its back before it started.

The government's response has been partly to blame the states—a time-honoured federal government response to anything—and partly to suggest that more money might be invested in mitigation of cyclone damage, to make buildings more resilient and the like. That certainly is welcome, but it is very clear that mitigation alone is not going to fix this issue, and the suggestion that mitigation—unless it's on a massive scale—is in itself going to drive down insurance premiums is nonsense. So I would say to the government that this is an issue that I, on behalf of the Greens and as a Queensland senator, will be focusing on quite heavily, to try to push them to do a lot more, because there is more that can be done.

I would like to commend the Liberal member for Leichhardt, Mr Warren Entsch, who has been going on about this issue for at least six years. Margaret Shaw, in amongst all the documents she emailed around, included many speeches from Mr Entsch about this. I also will be seeking his expertise with regard to best ways forward, because I certainly don't pretend to have all the solutions. But what I do say quite clearly is that there is more for government to do, especially if the insurance industry is going to continue to gouge people or continue to skyrocket insurance premiums. That might be justifiable according to the internal maths of insurance actuaries, but it is not justifiable in terms of the basic principle of fairness. In that circumstance, if the market is failing, either those companies need to be required to change their behaviour or the government needs to take over from them.

There used to be a direct role for government in insurance. I can remember in Queensland—and in other states, possibly all of them—we had the State Government Insurance Office, which specifically ensured that affordable basic insurance was available to everybody, in particular to battlers. I'm not saying we have to go back precisely to that model, but let's remember that this federal government's predecessor the Howard government introduced an insurance pool, a direct government intervention, in regard to terrorism situations because insurers wouldn't insure against them and people were unable to cover costs in the rare circumstance of an incident designated to be terrorism. So we already have the precedent of the government doing that.

Let's not ignore the elephant in the room here. A very clear reason why insurance companies are, in some respects quite logically, hiking insurance premiums enormously is climate change. Scientist after scientist has said that there will be more severe weather events. People in Northern Queensland, of course, say, 'We've always had cyclones through here,' and they have. But the frequency, and particularly the severity, of them is undoubtedly going to increase. Scientist after scientist is saying that. The government might be quite happy to ignore scientists and ignore the facts about climate change, but insurance companies, who actually have money on the line, are not ignoring the science; they are quite clearly indicating a recognition that the damage from intense weather events, such as cyclones, is likely to be worse because those events are likely to be more intensive. That basic reality is being ignored, and that clearly is one of the reasons why there's been inadequate action from this government. Of course, over some of this period the previous Labor government was also in power.

I'd like really to urge more focus on the human reality of this. Last week I was in Northern Queensland—in Cairns, Kuranda and Ingham—asking people about this very issue. Quite a lot of them, unprompted, could give stories about huge hikes in insurance premiums and how difficult it had made things for them. In one case somebody had had to close down their business because they couldn't afford it. So it's something that is having a direct effect on many people's lives. We spoke before about the long-term economic viability of Northern Queensland; well, this is a key issue that's got to be addressed. To its credit, the government already kicks in a lot of money after disasters, so, if there's spending happening anyway, putting some money into intervening in the insurance industry— (Time expired)

Question agreed to.