Anne Ruston (SA, Liberal Party, Minister for Families and Social Services) | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

This Bill will establish a reinsurance pool for cyclones and related flood damage. The pool will be backed by a $10 billion annually reinstated Commonwealth guarantee and be administered by the Australian Reinsurance Pool Corporation (ARPC) from 1 July 2022.

The Bill will deliver on the Government's commitment to improve the accessibility and affordability of insurance for households and small businesses in cyclone-prone areas in northern Australia.

Improved access to affordable insurance is vital to the economic prosperity and resilience of households and small businesses.

Over 10 years, the pool is estimated to reduce premiums by $2.9 billion.

The pool will provide coverage to:

The pool is expected to cover more than 880,000 household, strata, and small business property insurance policies in northern Australia. The Government will expand the coverage to include small business marine property insurance policies from 1 July 2023.

The pool will cover claims from damage caused by a cyclone that commences during a declared cyclone event. This includes wind, rain, rainwater, rainwater run-off, storm surge, and riverine flood damage, where these hazards are covered under the policyholder's insurance policy. A cyclone event will be declared by the ARPC to commence when the Bureau of Meteorology (BoM) advises a cyclone has formed and conclude 48 hours after the BoM advises the cyclone has ended.

The pool will generate savings by operating on a cost-neutral basis, leveraging the Commonwealth guarantee, and taking advantage of economies of scale. The pool is also expected to increase competition by encouraging greater insurer participation in cyclone-prone areas and support higher levels of insurance coverage by property owners.

The Bill makes it mandatory for insurers with eligible policies to participate in the pool, except for those insurers who write only a minimal amount of insurance outside of areas with nil or negligible cyclone risk. It provides an 18-month transition period for large insurers and an additional 12 months for small insurers. Mandatory participation will ensure the pool provides the greatest possible reduction in premiums.

In the first three years of operation, the pool will pay the entire eligible claim above the policyholder excess. This will support insurer transition and maximise premium reductions. The pool will then operate on a risk-sharing arrangement with insurers, with the level of risk retention set by Ministerial directions. The pool will continue to cover a significant proportion of eligible claims.

The Commonwealth guarantee will be called upon if the pool and ARPC's own resources are insufficient to pay eligible claims. If the $10 billion Commonwealth guarantee is likely to be exceeded following a single cyclone event or a series of cyclone events within a single year, the Government will be required to increase the guarantee to support the pool to meet all its obligations.

The savings generated by the pool will be targeted to policyholders with medium to high exposure to cyclone risk to drive their premiums down as low as possible, while maintaining incentives to reduce and mitigate risk. Targeting savings ensures that the policyholders facing the largest insurance affordability pressures receive the greatest benefit.

The Bill contains a suite of mechanisms to ensure the pool is delivering for northern Australia. The ARPC must publish an annual Financial Outlook Report that informs Government about the current risks affecting the pool's liabilities and provides added scrutiny of premium adequacy and risk preparedness activities. A regular formal review will evaluate the performance of the pool, ensuring it is fit for purpose in improving insurance affordability in cyclone prone areas.

Finally, following a direction from the Government, the Australian Competition and Consumer Commission has begun work to monitor and collect data to ensure that savings are passed through to policyholders and the reinsurance pool is delivering on its intended outcomes.

Full details of the measure are contained in the Explanatory Memorandum.

Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) | Link to this | Hansard source

I rise to speak to the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. At the outset I advise that Labor will be supporting this bill. Across Australia millions of people are struggling with the rising cost of living. Under Mr Morrison and Mr Joyce petrol prices and the costs of living generally are skyrocketing, and working families are falling behind. This has been something that has received very little attention from the government until just very recently, and—surprise, surprise—with an election in view this now appears to be a priority, with the government having done pretty much nothing about it for the last nine years. If the government actually cared—if they actually cared about the cost of living, if they cared about pressures on families—those opposite would not have spent a decade attacking wages, attacking job security and attacking Medicare. The reality is that everything—everything—is going up for Australians, except for their pay.

This bill is designed to address some of the very specific cost pressures that affect Australians that live in parts of the country that are especially exposed to natural disaster. Labor recognises there have been significant increases in the cost of insurance for households and small businesses in parts of Australia, particularly in northern Australia. Let's be clear about this: the increasing cost of insurance is directly related to the increased risk of damage to life and property from severe weather events associated with climate change. I recall the warnings that were assembled and put very, very clearly by insurance companies 15 years ago. I remember the work they did trying to convince the Howard government to do something about climate change, but that government was populated by climate deniers, just like this one. They did absolutely nothing to tackle climate change, and the problem is, as we are now seeing, that a warming world is expensive. Aside from the costs that it imposes to the economy generally, it puts very significant pressure on household and business budgets and it is leading to underinsurance in certain regions of Australia.

In recent years, there have been several reviews and inquiries into the availability and affordability of insurance in northern Australia. Despite all these reviews, despite all the recommendations, the Morrison government has failed to act until now, in what is likely to be the final week of the parliament. It is the final week of the parliament and they want people to think they care about the cost of living and underinsurance and the impacts of climate change on the community. Labor has been calling on the Morrison government to release the details of the reassurance pool and, in particular, the modelling upon which its claims of reductions in premiums are based. The Morrison government still refuses to release it.

And it's not only Labor that wants to see the workings, wants to see the numbers and doesn't believe what this group of incompetents and charlatans on the other side are telling us about their policies. Insurance bodies, key stakeholders, want to see it, too. Many of them haven't seen the modelling or the key assumptions that would allow them to provide information to their members about the impacts of this policy. In its submission to the Senate Economics Legislation Committee inquiry into this bill the RACQ said:

To date, RACQ cannot assess the impact the pool will have on our member's home insurance premiums, primarily because we have not received proposed pricing rates or associated modelling from the Australian Reinsurance Pool Corporation.

It's something the minister might want to consider addressing in replying and summing up. Why won't they show people the numbers? Why won't they provide the information that the sector is asking for?

This bill represents a belated engagement with emergency management and natural disaster. As I said, the truth is that climate change is making things worse. We actually need a government that recognises the threat posed by climate change and that accepts responsibility for both the long-term and short-term solutions to this problem. People on the North Coast and South-East Queensland have been devastated by recent floods. It might have prompted a competent government—a caring government, a responsive government, a government thinking about its people—into some kind of action. However, when the Prime Minister finally travelled to the Northern Rivers, what was it for? It was for a photo opportunity—not to meet with the flood victims, not to meet with the community members who so explicitly had wanted and sought an explanation for why his government had abandoned them at a time of desperate need. What is it about this guy, what is it about this Prime Minister, that makes him desperate for self-promotion but equally desperate to avoid meeting with people battling to get a hearing? Mr Morrison is so invested in avoiding responsibility that he no longer even notices the real people who suffer the consequences of his failures. This is the same Prime Minister who has presided over an inequitable distribution of assistance that has seen people receive different amounts of money depending on where they live and, in some cases, depending on who their local MP is. Shame.

I was born in a flood. I was born in the hospital in Murwillumbah in the flood in 1973. Those communities, whom I know so well, understand natural disaster and the collective community effort and solidarity that is necessary to respond. In the aftermath of the floods just a few weeks ago, I was actually stranded. I was visiting my mum and dad and I was at their place in the midst of the emergency. I should qualify that by saying they were in no danger—but plenty of people in that community were. A week later, I returned to Lismore to meet with some of the people I know there, some of the leaders and community organisations I know there, to assist them in cleaning up and talk with them about what they needed. It was a very big day with a lot of emotion. What was immediately evident, though, was the community spirit that I talked about. People were cheerfully supporting one another, staffing evacuation centres, donating food, helping one another clean up. Emergency services and frontline workers were working around the clock. Municipal workers were camping up at the dam, night after night after night, day after day after day, to make sure that the supply of potable water wasn't interrupted when so many other interruptions had occurred. Thank you to those workers. As one of their representatives in parliament, I cannot thank them enough for everything they have done.

But there were also plenty of tears on that trip, because the damage is enormous. Many of the people I met had lost their house and their place of work. I don't think you can understand the scale of destruction if you haven't been there. The people who are running community organisations are devastated. Their job—and they know it; they understand their responsibilities—is to support people in their most desperate times, people facing domestic and family violence, an area that's of importance to me, but the premises from which they provide those services have been completely destroyed. We know from experience that, tragically, in times of community trauma, the incidence of violence is likely to increase, but people have no services to turn to in a time of need because of the damage that's been done to the premises of those community organisations. I don't see any response to that from this government or any interest in responding to it. It's vitally important that, in addition to disaster payments provided to individuals, the government quickly assess what is required to ensure that the community of Lismore and the broader communities of the Northern Rivers, so many of whom have been affected by flood, are not left without vital community services.

As I said at the beginning of my contribution, Labor supports the establishment of a reinsurance pool for northern Australia. We've been willing to cooperate with the Morrison government on the establishment of this pool. However, the establishment of a reinsurance pool on its own will not be enough to significantly reduce insurance premiums in the north of Australia. This policy must be accompanied by others that reduce the risk of damage to property in the future. It should be linked to better planning rules, investment in mitigation infrastructure, retrofitting buildings and building for resilience into the future. Labor recognises this. My colleague Senator Watt has joined us in the chamber. I know that he is so proud of Labor's Disaster Ready Fund, which will allocate up to $200 million per annum for disaster readiness and mitigation measures. It's in stark contrast to the actions of the Morrison government, which locked up the $4.8 billion Emergency Response Fund for three years, only to start releasing funds on the eve of an election. That's no way to govern. It's not a responsible way to govern and it's not good enough. This fund could have built flood levees, drainage improvement, cyclone shelters and bushfire evacuation centres. It could have been used to keep people safe. Instead, it was used as a cash cow for Scott Morrison and his government. It earned them over $830 million in interest in the period that it was just sitting there, and in three years it has not spent a cent on disaster recovery or even started building a single disaster mitigation project. Under Labor's policy, up to $200 million per year will be invested in disaster readiness to protect lives and livelihoods.

An Albanese government will ensure that the establishment of a reinsurance pool is just one of a suite of measures to reduce the risk of loss of life and property associated with the increasing risk of severe weather. If we are elected to government, if we have that privilege, we will investigate adding flood coverage to the reinsurance pool as part of the 2025 statutory review of the operation of that pool. But I tell you what: Australians shouldn't have to wait until an election is imminent before their government decides to keep them safe.

Nick McKim (Tasmania, Australian Greens) | Link to this | 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.

Susan McDonald (Queensland, National Party) | Link to this | Hansard source

McDONALD () (): I rise to speak to the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. I will just take a moment to compose myself, having just listened to potentially the greatest amount of codswallop that's ever been spoken in this chamber. That's because most critics of the reinsurance pool don't live in the north. They don't reflect the lived experience of thousands of people in the north.

I have to acknowledge the strong advocacy over the last 10 years of Warren Entsch, the member for Leichhardt; George Christensen, the outgoing member for Dawson; Phil Thompson, the member for Herbert; Andrew Wilcox, mayor of Whitsunday and candidate for Dawson; Bryce Macdonald, chairman of Canegrowers Tully and LNP candidate for Kennedy; and Deputy Mayor Andrew Cripps and Nicole Tobin, both Senate candidates for the LNP. All of these people live, work, play and pay the increased costs of insurance and the associated costs of rentals in North Queensland.

Of all the senators in this place, 7.9 per cent live in northern Australia; 4.6 of House of Representatives members live in northern Australia. We have 51 per cent of the land mass of the country, 1.3 million people, three per cent of the population and we produce 11 per cent of the GDP, yet we have to listen to those from the south who refuse to give us the same advantages and level playing field we desperately need in the north.

In these critical times, it is important that Australia gets stronger—and gets stronger quickly. The way we do that is to invest in the places where we make our money, the places that generate the royalties and the income to ensure the highest standard of living that Australians enjoy compared to so many of our near neighbours. Roads and infrastructure for families and communities are investments in the north, but none of this is possible without affordable and accessible insurance.

In the north we pay more. We pay more for electricity. We pay more for building materials. In Cloncurry it costs $700,000 to build the same house that costs $400,000 in Brisbane. We pay more for flights to get in and out of our regions, and we pay more for insurance—and for a long time, longer than the rest of the country. Our premiums have been at least 2½ times what people in the south pay, and that's if you can get insurance at all. That is according to the ACCC's Northern Australia insurance inquiry report. That is data. This is especially grim for businesses. Many are forced to self-insure because no insurance companies will give them coverage and no bank will lend.

Those people who live in the north—work in the north, pay bills in the north—advocated to this government, which has come forward with this $10 billion reinsurance pool. The reinsurance pool is predicted to reduce premiums for households, strata title properties and small to medium enterprises. The Townsville Chamber of Commerce has calculated that if just two-thirds of the projected savings was spent in the city annually there would be approximately $222 million in economic output, a combination of $118 million to gross regional product, over $60 million in income and salaries for local workers, and approximately 949 additional ongoing full-time jobs created. These numbers do not include reductions in small business premiums, and if they did they would reflect even greater benefits. Importantly, mechanisms are in place to review this legislation within 12 months.

I want to specifically thank consumer advocate Margaret Shaw, Assistant Treasurer Michael Sukkar and all of our northern Queensland MPs, because without this understanding of the genuine and longstanding conditions in northern Australia this legislation would not have come to pass. As I listen to the senators in this place who are going to talk about tragic, devastating floods in other parts of the country, what about giving us a go in northern Australia? What about lifting your eyes up and looking at the disadvantage that's been in northern Australia for over 10 years, rather than reflect on the tragic and terrible circumstances of the most recent floods in southern Australia?

The opposition want to talk about what the Queensland Labor government are going to do. Well, how about they talk to their mates in Queensland, who have been raping and pillaging $65 million a year from North Queensland—

Jenny McAllister (NSW, Australian Labor Party, Shadow Cabinet Secretary) | Link to this | Hansard source

Madam Acting Deputy President, I raise a point of order. The standing orders really do prohibit reflections on other parliamentarians, and I think the language was unfortunate.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

It would assist the chamber, Senator McDonald, if you could withdraw.

Susan McDonald (Queensland, National Party) | Link to this | Hansard source

I will certainly withdraw the words 'raping and pillaging by the Queensland government'—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Senator McDonald, you have been here well and truly long enough to know that you can't really retract and then restate the words. So I ask you to retract and—

Susan McDonald (Queensland, National Party) | Link to this | Hansard source

I retract the words that I used, unconditionally.

The Acting D Eputy President:

You have the thanks of the Senate.

Susan McDonald (Queensland, National Party) | Link to this | Hansard source

It is unfortunate that the state Labor government has been raking in $65 million per year in stamp duties that has not been reinvested in resilience in North Queensland. If the opposition and the Greens were serious about wanting to focus on resilience expenditure in the north, perhaps they could turn their eyes to money that has already been swept out of North Queensland and straight into the coffers to be spent who knows where else—but I suspect it will be in southern Queensland.

The politicisation of disasters in this country is tragic and unfortunate. We just heard commentary from Senator McAllister on the disaster fund, which Labor voted for when it was introduced to the parliament recently. But now the opposition want to pretend that they not only—

Opposition senators interjecting—

I'm sorry, but I can't hear myself—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Order, senators!

Susan McDonald (Queensland, National Party) | Link to this | Hansard source

Not only did they vote for it; they continually failed to raise the point that the $50 million that was budgeted to be spent annually has been spent. In fact, a third round has been announced. You cannot deny the reality that $50 million a year from that fund has been spent and the reality that the $150 million balance was only to be spent after the billions of dollars of categories C and D funding, which goes to the states, had been exhausted. It's unfortunate that the opposition don't understand the legislation and the focus of what they voted for and how they could have assisted change.

In the politicisation of disasters, they want to discuss what happened in Lismore. I just want to call out the member for Page, Kevin Hogan. The circumstances that his people have lived through are truly cataclysmic. It is one of the worst disasters in living memory, because these houses have been completely destroyed—10,000 people are without homes. Yet those opposite want to politicise that and discuss that, while the Prime Minister had COVID, he should have magically been able to be in Lismore. Meanwhile, the opposition leader had left the state to fly to Western Australia. It would be good for that reality to be in place.

Honourable senators interjecting—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Order, senators!

Order, Senator Ayres, Senator McKenzie and Senator Davey! This is conduct unbecoming. The matter is of great interest and it is very important, but Senator McDonald has the right to be heard in silence.

Susan McDonald (Queensland, National Party) | Link to this | Hansard source

Getting back to the cyclone reinsurance pool, it is of course relevant for northern Australia and the people in that part of the country, who generate an enormous part of the wealth for this nation. Yet, once again, we will see the south not want to give us a go, if you listen to the opposition. If you listen to the Greens, they'd have us completely depopulated and wiped out because of their lack of understanding of the circumstances in the north. So, before you call for the pool to be rolled out nationally, give northern Australia an opportunity to rectify the terrible imbalance that has been in place.

Since Cyclone Yasi in 2011, insurance has more than trebled for many people. For strata titles, a premium for 25 units has gone from $25,000 to at least $100,000 today. This forces body corporate fees to be painfully high and is forcing retirees out of their forever homes that they'd bought to retire in. About 20 per cent of northern Australians are uninsured, and more are underinsured. The rest of Australia has not had to deal with this issue, and we deserve a chance for this to be rectified first. One Townsville resident was recently quoted $14,000 to insure a $335,000 home, despite having been with the insurer for more than 20 years. We have had so many insurers and underwriters withdraw from the north that the market is in terrible disarray.

During the Senate Economics Legislation Committee inquiry into the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill, we had a terrific opportunity to do a deep dive into the issues in northern Australia—not in southern Australia or other places where people live but in northern Australia, where the market is truly in disarray. It was a great opportunity to hear from the people who live there and pay these insurance premiums, and I just want to quote Tyrone Shandiman from the Northern Australia Insurance Lobby, whose final words at the end of his testimony were simply, 'Pass the bill.'

I just want to refer to the opposition's support for this legislation. I want to thank them for their acknowledgement of the issues in northern Australia and the importance of this legislation, and I hope that they will stand by those words when it comes to the vote, because we obviously can't rely on the Greens party to do anything remotely practical to support northern Australia. They would instead try to move amendments that would ensure that this bill would never be passed and that we would never see a rectification of the true injustice of costs. Reflecting their truly communist background, they would be trying to socialise the costs of insurance right across this country.

I recommend this bill to the Senate. It is an incredibly important piece of legislation to pass to ensure that homes, communities and businesses continue to survive, because in the north we know how to manage variable climates and live through great seasonal events. We are experts at it, but what we need is a hand. We need a hand with our very small population, our 1.3 million people across all of the top half of the country. We need a hand to support us to continue reinvesting in the north and to allow us to prosper and, subsequently, Australia to prosper.

Tim Ayres (NSW, Australian Labor Party) | Link to this | Hansard source

We know from Senator McDonald's speech that not only does she want the opposition to support this legislation, the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022, which we've indicated ahead of time that we will; she wants the opposition to give the government a pat on the back as we debate this piece of legislation in the last possible sitting of parliament. The government's had years to deal with this issue, and, in typical Morrison government form, this legislation is brought here at two minutes to midnight.

As of 8.30 this morning, New South Wales emergency services had issued six evacuation orders in the Northern Rivers, including for the Lismore central business district. You might laugh, Senator McDonald, but the circumstances there are desperate. This is a part of the world that I know well. They're tight-knit communities, and they are facing up to this crisis again. It's not yet been tallied how much last month's floods cost.

What we do know is that people in Lismore could not afford to insure their homes and businesses before the last flood, let alone before the recent ones, and certainly not in the intervening period between these two incidents. The costs will almost certainly spiral in the wake of this difficult summer. Many households and businesses will face a difficult question about whether they can afford to rebuild in such a flood-prone area.

It's not limited to the Northern Rivers. The towns that are rebuilding from the Black Summer bushfires face a similarly difficult set of issues. It's clear that there will need to be government effort to reduce the cost of insurance in parts of the country that are vulnerable to natural disasters. And of course the people of North Queensland have been disproportionately hit by the rising cost of disaster insurance.

On that basis, Labor will support this bill, but the measures are clearly insufficient and they are clearly flawed. They reflect a government that is far too focused on its narrow political priorities at the expense of serious long-term planning. As Labor senators on the Economics Legislation Committee noted, there are limited details on how this reinsurance pool will actually deliver any savings at all to people in North Queensland. The Treasury modelling which underpins this legislation hasn't been released, despite calls not just from Labor but from the insurance industry and key stakeholders. As the Royal Automobile Club of Queensland said in their submission:

… RACQ cannot assess the impact the pool will have on our member's home insurance premiums, primarily because we have not received proposed pricing rates or associated modelling …

Any public claims the Morrison government has made to the people of North Queensland—or will, undoubtedly, make ahead of the coming election—should be treated with the highest degree of scepticism.

When the scheme was launched, Minister Sukkar, who doesn't have a very good track record of following through on policy commitments, said it would provide savings of up to 10 per cent. When it made it to the House of Representatives, he claimed savings of 45 to 58 per cent, without releasing the modelling. It's utterly unreliable. Minister Sukkar has made all sorts of claims about this legislation—much like the bogus housing industry set of propositions that he was engaged in before, which promised a lot but delivered very little indeed.

There are also flaws in the government's decision to limit coverage to 48 hours after the declaration of a cyclone. That means much of the kind of damage from Queensland cyclones in the past few decades wouldn't be covered by this reinsurance, including the majority of the damage caused by Cyclone Debbie in 2017.

It's worth noting that the ACCC has argued against the creation of a reinsurance pool. The government ignored three core recommendations from the ACCC, including recommendations that would have made a substantial difference to the affordability of insurance. Instead, in the final hours of this squalid parliament, the Morrison government has produced last-minute, weak, half-baked legislation that is all about announcements in the lead-up to an election and has very little to do with actually delivering for the people of North Queensland.

Our insurance system more broadly is buckling under the weight of climate risk. It's clear that the impacts of climate change are driving up the cost of insurance premiums—not just in North Queensland but in the Northern Rivers of New South Wales, on the South Coast of New South Wales and in the north-western suburbs of Sydney. It's why you can't buy home and contents insurance in Bourke. It's why caravan parks on the South Coast of New South Wales have struggled to reopen in the wake of the fires. I chaired the Senate inquiry into the 2019-20 bushfires, which included an entire chapter on the effects of the fires on the insurance industry. I heard from communities directly about what impact premium rises were having on an already devastated community. As the committee's final report said:

That premiums can increase by a magnitude of 300 to 400 per cent following a natural disaster—particularly for commercial enterprises upon which a community may rely—is unsustainable and cannot occur after each natural disaster.

The centre of this problem is of course a market failure and an utter failure of this Morrison government to grapple with its responsibilities. Someone is going to have to pay for the increasing costs and risks of climate change. Taxpayers, policyholders and shareholders are all going to bear this burden. Currently, those costs are almost exclusively being born by policyholders, but, as insurance becomes more unaffordable, more people will be underinsured and uninsured. Government backed reinsurance pools do have a role to play here, but making the Australian government the insurer of last resort is not a long-term plan for or a sustainable approach to this problem. The restructuring of our system only goes so far. It's like rearranging deckchairs on the Titanic. At some point we actually have to deal with the risk.

The committee report found:

… insurance market failure should be addressed through increased expenditure on mitigation and resilience infrastructure to better address the risks that climate change and natural disasters pose to the community.

No amount of empty promises from this government on the price of insurance, as unbelievable as they are, can distract from their failure to invest in mitigation and resilience infrastructure. They have been repeatedly warned, by both the opposition and the insurance industry, that their investments are insufficient. They actually need to spend the money that they'd supposedly allocated to disaster mitigation, as my colleague Senator Watt has repeatedly insisted. The government has barely even touched the $4 billion fund that they established specifically for that purpose. They held that promise out to communities and then walked away from those communities. Instead, they've left the disaster recovery and resilience agency to their most blatantly political appointment yet, former CLP chief minister and Liberal Party president Shane Stone. We saw his performance on these issues in the wake of the Lismore floods. What did Mr Stone do? It's a pretty squalid week, really, for the government. Mr Stone blamed the victims, the victims themselves, the people who live in Lismore. The Prime Minister wouldn't get out of bed to do his job. They had to wait until he could present himself after his period of quarantine so that he could be there for the press conference to make the announcement. People waited for days and days and days for this government to do its job. Nothing says more about the priorities of this government than that.

Ultimately, though, the only way to reduce this risk over time is by taking meaningful action on climate change. For decades it has been obvious that we are facing more frequent and more severe natural disasters. Australia is the most vulnerable to climate change. Our regional communities are the most vulnerable in Australia. The insurance industry and insurance companies globally and here in Australia have produced extensive research and commentary on this issue. They've played a constructive role as a global stakeholder on these questions. As an example of the work, the IAG and the US National Center for Atmospheric Research produced a paper Severe weather in a changing climate. Its conclusions are clear and its impacts are diabolical for Australians, particularly Australians in the regions. Anyone who has read the report will be deeply saddened and disturbed by the scale of the floods in northern New South Wales and South-East Queensland, but they would not be surprised. The industry has been right to have been urging governments to spend more money on natural disaster mitigation and resilience infrastructure. They've been in the media recently, crowing about the success of their lobbying in this regard. But, let's face it, the biggest and most effective climate change mitigation measures available to us are to get our own climate and energy policies right. Instead we've been engaged in squalid climate wars and identity politics, on the government side, about this issue.

It is a little curious that the insurance industry in Australia has been so quiet on this question publicly. They have a very strong interest in limiting the rate and magnitude of these kinds of disasters and in public policy responses to do that. The industry should be right out there demanding rapid and deep action on these questions. So why haven't they been doing it? In the aftermath of the Black Summer bushfires, a senior executive of one of Australia's biggest general insurers, who I won't name, was asked why. She answered, quite frankly, that the insurers would be demanding stronger action from government on climate and energy policy but that it had been made clear to them by senior members of the Morrison government that any such demands by the industry would be met by regulatory retaliation from the government itself. They got the message from the Morrison government: 'Don't speak up; otherwise, we'll clean you up.'

It's disturbing on many levels. It's disturbing because there's still very little prospect of insurance consumers seeing anything other than escalating premiums for increasingly scarce insurance, including in North Queensland. It's disturbing because the Morrison government wields the power of government to bully its opponents, to bully industry into acting against the interests of its shareholders and customers. And it's disturbing because an industry run by very fine people, who know what they're doing, shouldn't be stood over by this government.

So, whilst there is some bipartisanship in this place about the need to pass this piece of legislation through this parliament—as half-baked as it is, as imperfect as it is, as last-minute as it is, as token as it is, as it is about an announcement and allowing Mr Morrison, Mr Stone and, no doubt, Senator McKenzie and others to pose in front of a rainwater tank at the back of some property in North Queensland and crow about the supposed benefits they're going to deliver for North Queensland—it is an empty promise with no publicly released modelling to support it.

What Australia really needs, what people in the regions need, is a government that actually has a plan to deal with the issues of adaptation and mitigation, the infrastructure that needs to be built and the proposals that need to be discussed with communities to deal with one of the greatest threats regional Australia faces.

Mehreen Faruqi (NSW, Australian Greens) | Link to this | Hansard source

I rise to make a contribution to the debate on the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022 and I want to associate myself with the comments made by my colleague Senator McKim. As I speak, communities in many parts of Lismore in New South Wales have been ordered to evacuate again as heavy rains continue to batter the North Coast in my home state. Residents in Lismore and surrounds—North Lismore, South Lismore, low-lying parts of Kyogle, Tumbulgum and other low-lying areas—were given until 10 pm last night to leave their homes. My heart goes out to people who have had to leave their homes yet again, faced by yet more life-threatening flooding. Weary residents in parts of flood-ravaged Queensland are also on high alert again. So many of these people have already faced severe floods. They have lost their homes, their lifelong belongings and much more to these floods. And here they are faced with even more catastrophic weather, with dangerous and life-threatening flash floods lapping at their doorsteps yet again.

The floods in New South Wales and Queensland remind us that this is the everyday reality of climate change. This is what we have been warned about over and over for decades now—not a day or two, not a week or two, not a year or two, but decade upon decade. The climate crisis is here and now, and it is not just on people's doorsteps; it is in their homes and it is impacting every aspect of their lives. The damage and suffering caused by these floods reminds us of the continued and deliberate inaction of the Liberal-National government to address climate change. They have in fact fuelled climate change by subsidising fossil fuels and approving coalmine after coalmine.

It's not as if we didn't know, as I said earlier, about these impending disasters and the devastation they would cause. The Intergovernmental Panel on Climate Change's report, which said, 'Climate change is widespread, rapid, and intensifying, and some trends are now irreversible', sounded a code red for humanity but was completely disregarded by this government. The same report warned us that extreme weather events caused by climate change will increase in both intensity and frequency—and here we are, with a dire warning that is being played out in my home state of New South Wales and in Queensland right now. They have witnessed what a climate emergency looks like firsthand, and they are devastated. Yet the Morrison government have ignored all warnings. Yet they have failed to tackle the climate crisis. Yet they keep talking about 'variable climate'—we heard that this morning from a government senator—as if it has nothing to do with their actions. They're obviously being wilfully ignorant because they don't want to act on coal and gas, lest they offend their pals and donors—the fossil fuel billionaires.

Much has been said about the scale of these floods. They are massive. People who have lived through other floods in that area talk about never having seen anything like this. Warehouses were fully submerged underwater. And they are right. As my friend Lismore resident and soon-to-be member of the upper house of New South Wales Sue Higginson wrote in the Guardian, 'This is more than a flood; this is a catastrophe.' She goes on to say:

We need to look towards the future and decide what kind of future we want. Climate change has happened, it is going to get worse—the decision is how much worse do we want this to get. Strong action on climate change is not simply a flood plan or a fire plan, it means no new coal and gas, decarbonising our economy, making our planning system climate centred and keeping people safe.

That's why support for the Greens in that area particularly is growing. Our Greens MP for Ballina, Tamara Smith, has stood and supported the community, as has our federal candidate for Richmond, Mandy Nolan. They haven't been shy to call it as it is—a climate catastrophe, a climate emergency—and they are with the people who are suffering the most.

In addition to its failure to address climate change, the government is now picking and choosing who gets covered under the reinsurance plan proposed by this bill. The bill would require the public to maintain a $10 billion fund to underwrite the contingent liability associated with nationalising reinsurance for cyclone and related flood damage. But that's where it ends. The bill does not include other climate disasters. We know that severe weather events caused by climate change are making insurance costs skyrocket in many parts of the country. Yet this bill as currently drafted will not cover insurance for the people of New South Wales and Queensland who have just experienced and continue to experience devastating floods. There is no doubt that the damage caused by cyclones should be covered; of course it should be. But there is no reason that flooding for other reasons shouldn't be covered.

Despite the indisputable truth of climate change induced disasters, the government has not mentioned climate change in introducing this bill. The term is used in the explanatory memorandum but only when quoting references. And we know why that is the case. The Liberal and National parties are still full of climate-denying criminals. Their seats in parliament are funded by dollars from fossil fuel companies, so they have their heads deliberately buried in the sand.

The government is utterly failing to acknowledge the universal nature of the threat posed by the climate emergency by proposing, in this bill, to nationalise reinsurance for only a particular class of what have traditionally been called 'natural perils' but that are now, very clearly, anthropocentric climate disasters caused by the actions of humans, caused by the actions of the Liberal-National government.

To do this, the bill is drafted in a way that is both inequitable and short-sighted. The climate emergency is pushing up the cost of insurance all over the country. If a government's reinsurance pool is to be established, all Australians should be afforded the benefit. The bill is so limited in its scope, and my colleague Senator Nick McKim has circulated several very sensible amendments to address this problem and cover people who have experienced damage caused by flooding. The government's reinsurance scheme proposed by this bill should cover all climate disasters and people affected by them right across the country.

The Greens want a statutory review to consider fully nationalising reinsurance for all climate disaster related property damage. Fully nationalising reinsurance would directly expose the government to the costs of underinvestment in public works that are required to mitigate the impact of climate disasters, because they are here and now. We are exposed to these risks one way or another anyway. They should, at the very least, be transparent. This would hopefully create a direct incentive for the government to invest in climate adaptation works all across the country as well as better data collection, and better land use planning and coordination with state and local governments.

The Greens have another excellent amendment, that the money required to establish and maintain the $10 billion reinsurance pool be backed by taxation on entities extracting and combusting fossil fuels. The logic here is pretty simple and straightforward. The burning of fossil fuels is what has created the climate emergency, so those who profit from the burning of fossil fuels should be made to pay for the cost of the climate emergency.

Finally, I want to speak about this government's response to climate disasters, particularly the one that is unfolding still in northern New South Wales. People in flood-stricken areas like northern New South Wales had to wait and wait and wait for the federal government to respond, for any help to arrive. They were desperate to save what they could and who they could. Local people had to take on the extreme risk of trying to save their neighbours from severe flooding. I'm so proud of that community because every time a disaster happens they work with each other. They put their lives at risk to help others. Community members stepped in and stepped up for each other, when the government was nowhere to be seen.

'That's not my job,' said Prime Minister Scott Morrison, who declared the floods in New South Wales and Queensland a national emergency a full nine days after Lismore was submerged, and the local anger was palpable. I was hoping this would be a wake-up call for Mr Morrison, but his arrogance and the arrogance of the Liberal-National government knows no bounds. Even the support payments announced initially were carved out by local government areas and refused to cover all the flood ravaged parts of northern New South Wales and refused to include many people who were hit by the floods—as if floods just recede at LGA boundaries and decide to not hit the homes of migrants, international students or seasonal workers who were also left out of the support. It was: 'What a shame.' How disgraceful.

The government that remembers to pinch pennies when helping people who have been hit by severe flooding but continues to subsidise fossil fuel corporations to the tune of billions of dollars is not a government that anyone wants. This dismal lack of support and preparedness on what climate disasters will look like, what climate emergencies will look like, is rooted in the climate denialism inherent to the coal-loving Liberals and Nationals. There is no climate mitigation, adaptation and resilience plan, and, sadly, we do not expect one from this government either.

The community is really tired of this fossil-fuel-loving government. This is why we have to turf them out at the election, which isn't very far away. I, for one, can't wait to do that. The Greens in the balance of power will push the next government to move further and faster to tackle the climate crisis, to end coal and gas, to do more on mitigation and resilience, and to protect people and the planet.

Andrew Bragg (NSW, Liberal Party) | Link to this | Hansard source

I rise to make some brief remarks on this bill. Before I do so, I'm not sure whether Senator Faruqi did refer to the Liberals and Nationals as 'criminals'. I'm not sure whether that was what was said. If it was, I make the point that I understand that people have different opinions, and I think it's a clearing house of ideas, but I don't know that calling people 'criminals' is the appropriate approach.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Senator Bragg, it would have been helpful, if you thought that, if you had taken a point of order at the time.

Andrew Bragg (NSW, Liberal Party) | Link to this | Hansard source

I wasn't sure whether or not that was what was said.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

If you would like, I will refer it to the President to review at a later point in time. I was treating it simply as a statement at the beginning of your speech, but, if you—

Andrew Bragg (NSW, Liberal Party) | Link to this | Hansard source

Yes. Can you please get it checked?

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

As a point of order?

Andrew Bragg (NSW, Liberal Party) | Link to this | Hansard source

Yes, please.

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Yes, I will proceed in that way. And now I call you to make your contribution to the debate on the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022, Senator Bragg.

Andrew Bragg (NSW, Liberal Party) | Link to this | Hansard source

I'll just make the point that, in terms of obtaining insurance, which is an important product in every community—and it is a product which is heavily regulated but which is a product provided by the market—we want to see all Australians being able to access it. When there is a regulatory failure or a market failure, there is a case for regulatory intervention. It has been asserted that this would lower the cost of insurance in this part of the world, and that is a laudable objective, but it is a significant intervention in the market, and we ought to be very careful in making interventions in the market. I would be concerned if the scope of the scheme were to be expanded in any way. The way that the legislation works is that, once the BOM declares that there's been a cyclone, the scheme can be triggered. Given the issue we're now facing with climate change, it is possible that, because of climate change, the scope could expand, and I think that gives us two implications to consider.

First, we should be working as hard as we can with other countries to reduce the impact of climate change throughout the world. Secondly, we need to get moving on the mitigation issues, such as the planning, the building codes and the council issues, because this should be a temporary solution. It should be a fix for a point in time when the mitigation approaches are not strong enough. We want to have resilient buildings. We want to have buildings that are insurable by the market. We don't want to have a government insurance company. This is an intervention that is required now, and I accept that. As I explained in my additional comments in the Senate report, I accept that it is a desirable measure to have right now, but we want to see it there whilst it's needed. So we need to get moving on mitigation, and we need to maintain our commitment to climate change. It is good that we are the country to sign up to net zero by 2050. There have been past governments that haven't agreed to all the international protocols, but this government has agreed at the Glasgow conference to commit Australia to net zero, which I think is an important economic measure.

Finally, it is an important precedent, and I don't want to see it expanded beyond its current bounds. I do think that the review that is to be conducted within 12 months and then every three years after gives us cause to ensure that this scheme is only there whilst it is needed. It is needed in the short term so that people in northern Australia can get access to insurance, and I accept that, but we don't want to set precedents where the government ends up running insurance companies or other things that the market should run. That is not saying that we should let the market rip. It is saying that there should be regulation where it's needed and where there is genuine market failure. So I look forward to us maintaining our commitment to climate change adaptation but also to adaptation on the ground, in terms of mitigation, against these sorts of floods.

Murray Watt (Queensland, Australian Labor Party, Shadow Minister for Northern Australia) | Link to this | Hansard source

I'd like to make a contribution on what is a really important piece of legislation, particularly for people in North Queensland, who have suffered under astronomical insurance premiums over recent years and who have been waiting very patiently for nearly 10 years for this government to do anything about it.

Before I get into the substance of the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022, though, I do want to pick up on some of the comments that Senator Bragg just made. I was concerned to hear what he said, and I'd invite the minister to address this when she wraps up. What I think I heard Senator Bragg say was that the reinsurance pool should not be a permanent feature of the insurance system for North Queenslanders. I'm wondering whether Senator Bragg is suggesting that at some future point the government will remove the reinsurance pool. That is certainly not what people in North Queensland have been told by this government; they have been assured by this government that this reinsurance pool will be around for a long time to come and will save them money. To hear a Liberal senator now question whether this is something that should remain in place I think would be quite worrying to people in North Queensland, and it certainly goes against what several ministers of this government have spent months telling people in North Queensland. So, as I said, I invite the minister, in her summing up, to comment on what Senator Bragg said and whether in fact this is just an election manoeuvre from the government and something that they will withdraw at a future date if they are re-elected.

I'll now turn to the bill itself and what it seeks to do. As I said, I do not need to be persuaded one little bit that insurance premiums and insurance availability are a genuine problem for people, particularly in North Queensland. It's increasingly a problem in other parts of the country as we face more frequent and more intense natural disasters which, as much as this government might not want to admit it, are a direct consequence of climate change. We know that if we're just prepared to listen to any reputable scientist they will tell us climate change will be driving more frequent and more intense natural disasters in the future. The fact that many people across the country, particularly in North Queensland, cannot afford insurance currently or obtain insurance currently is extremely worrying when we think that we're likely to see more natural disasters in the future.

I don't have the figures before me about the premium rises, but I know from having spoken to homeowners, businesses, community organisations and others across North Queensland that it is becoming increasingly difficult even to get insurance, as a result of the heightened risk of cyclones, floods and other natural disasters. For those people who are fortunate enough to be able to obtain insurance, the sums of money that they have to pay are, frankly, beyond most working families' budgets. And they're getting worse, with premiums increasing exponentially year after year.

As I said, this is something that the government has been promising to fix for at least 10 years. Warren Entsch, the member for Leichhardt, has been in this parliament for the best part of 25 years, and for the best part of 25 years he has been promising people in his electorate he'll do something about insurance premiums. For all the time that he has been here all that has happened is that the insurance situation in North Queensland has got worse. So in his nearly 25 years in parliament he has not delivered on his promises to do something about insurance premiums and availability. The same goes for the member for Herbert, Phil Thompson; the member for Dawson, George Christensen; and senators from North Queensland. They have spent so much time promising to do something about insurance premiums and availability in North Queensland and have done so little. Now, on the eve of an election, literally in the last couple of sitting days before an election, all of a sudden they rush some legislation into parliament to establish a reinsurance pool and they're making more promises to North Queenslanders that this is going to be the fix.

As I say, Labor is going to be supporting this bill. We absolutely recognise the problem that people in North Queensland are experiencing when it comes to insurance and we support anything this government is prepared to do to do something about it. We're pleased that finally the government is doing something which might offer some relief. As I say, it's just disappointing that it has taken nearly 10 years and an imminent election before we've seen any action from this government.

The government has had ample opportunity to do something about this. We have had inquiry after inquiry throughout this government's life, which have pointed to the problems in the insurance market in North Queensland and have put forward recommendations, but nothing has been done. Most recently, we saw another ACCC inquiry into the matter. It made dozens of recommendations about what could be done to improve insurance availability and price for North Queenslanders. You'll be shocked to know that this report is still sitting on the shelf, along with every other one that this government has commissioned—not acting on those recommendations.

It goes beyond taking legislative or other steps in relation to insurance that this government's failure to deal with this problem is truly evident. It also goes to the matter of disaster mitigation. If you talk to any of the insurers who cover the North Queensland market or those who have been chased out of the market because it's just not viable for them to insure people, if you talk to any local governments in North Queensland, if you talk to businesses in North Queensland, if you talk to home owners in North Queensland—if you bother to speak to anyone in North Queensland—what they tell you, as they have told me, is that the best thing this government can do to reduce the risk of damage to homes and businesses from natural disasters is to invest in disaster mitigation. The reason that matters is that, if you can bring down the risk of damage to homes, businesses and other things by investing in disaster mitigation, that reduces the risk for insurers, that reduces the premiums.

There are examples all across Queensland already that we can point to where investment in disaster mitigation has brought down premiums. I know Senator Chisholm has spent some time around Roma inspecting the flood levy there. I think he was there with the member for Kingsford Smith, Matt Thistlethwaite, a little while back looking at the flood levy there. Again, I can't remember the figures—Senator Chisholm might have them—but the fact that a flood levy was built in Roma has significantly reduced insurance premiums for people in that area, which tends to get floods on a regular basis, so investment in disaster mitigation works. It saves people's lives, it saves their properties, it saves taxpayers the billions of dollars in repair costs after natural disasters and it can actually put some controls around spiralling insurance premiums.

Yet, despite all of that—despite report after report, stakeholder after stakeholder, insurer after insurer, local government after local government saying that we need this government to invest in mitigation—instead what we've seen from this government is the world's biggest piggy bank, otherwise known as the Emergency Response Fund. It's a fund that was set-up by this government three years ago with, at the time, about $4 billion in it. As is often said by the government, yes, Labor did vote with the government for that legislation. We did vote to create the Emergency Response Fund because we thought it was a good idea for the government to put money aside to invest in disaster mitigation and to have at hand for disaster recovery. But, as I think all of Australia has now learnt after the tragic floods in northern New South Wales, the Emergency Response Fund has now been going for three disaster seasons and this government has still not spent a cent from that fund on disaster recovery. They haven't even started building a single disaster mitigation project from that fund, let alone completed one.

The one thing they have done with that fund is earn themselves a tidy $830 million in interest. That fund was established to assist Australians with disaster recovery and disaster mitigation. It could've been used to build the flood levies, the drainage improvements, the bushfire evacuation centres, the firebreaks, the telecommunications improvements—all the kinds of things that we know keep people safe in a disaster and can actually make a practical difference to insurance premiums. It could have been used for those purposes, but instead it just sat there, earning interest for the government and making their own bottom line look better.

Whether it be the ACCC report, the numerous other inquiries that have recommended changes to insurance to look after North Queenslanders or investing in disaster mitigation, this government has failed over and over again. They—led by Mr Entsch, the member for Leichhardt, but the others are just the same—make promise after promise after promise to do something about insurance, but when it comes to action it's failure after failure after failure. So now, two sitting days before an election, the government has finally decided to do something. Let's hope it works. Let's hope that this reinsurance pool works. Labor are backing it because we want to give it a chance to work. We're just so happy to see the government do anything at all that might make a difference to insurance premiums in North Queensland.

I have to say that this government's track record makes us very sceptical about what difference this will actually make in practice. That scepticism is only heightened when we see the way the government has behaved around the claims it has been making about the savings that will be generated from this reinsurance pool. Several weeks ago the government put out a press release claiming that it had modelling that showed that the reinsurance pool would deliver massive savings to people in North Queensland. That was what got reported in the media, but look at the press release that the minister put out at the time—and this was a few weeks ago. It always pays to look at the fine print when it comes to the Morrison government. The press release said that it was only 'homeowners in northern Australia with the most acute cost pressures' who would be expected to benefit from up to 46 per cent premium discounts.

We asked about this at estimates. I know Senator Chisholm asked about this at the Senate inquiry into this bill as well. We were trying to establish who we are talking about when we say 'homeowners in northern Australia with the most acute cost pressures'. Is that five people in northern Australia who might benefit from this? Is it 500? Is it 5,000? You're out there making the claim that this is going to save people a lot of money, but how many people are we actually talking about? We couldn't get answers from the government about that. I flag to the minister that we will be asking those questions again in this debate.

When we asked about this at estimates we asked to see this magic modelling that tells us that people are going to be saving up to 46 per cent. Minister Hume, who was there at the table, said: 'No. We can't release the modelling, because it's not in the public interest.' How arrogant of this government to say to North Queenslanders: 'We're going to save you all this money with this reinsurance pool, even though we've done nothing for 10 years. Vote for us again and you'll get some savings, but we won't show you how much and we won't show you any of the proof we've got that backs up our claims.' Do you know what was worse? Minister Hume said it was not in the public interest for North Queenslanders to see that modelling. How arrogant! North Queenslanders apparently can't be trusted by this government to see the modelling the government claims it has that backs up its claims about how much people will save.

I still want to know from this government how much the average homeowner in North Queensland will save from this reinsurance pool and how many people will actually save 46 per cent. Is this just more misleading tripe from a government that has spent 10 years doing absolutely nothing to fix the insurance crisis in North Queensland? I foreshadow that I will move a second reading amendment that seeks to obtain that modelling.

There are numerous other issues. In the very little time I've left I want to address the Greens amendment that seeks to extend this reinsurance pool to flooding in other regions. We think this is an idea worth considering, but the Greens have dropped this on the eve of this debate, with no information about what it will cost taxpayers and what impact it will have on premiums. We think this should be considered as part of the review of this legislation going forward.

Anthony Chisholm (Queensland, Australian Labor Party) | Link to this | Hansard source

It is my pleasure to follow Senator Watt, who raised significant issues with this Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022—

Deborah O'Neill (NSW, Australian Labor Party) | Link to this | Hansard source

Sorry to interrupt you, Senator Chisholm, but there is a hard marker in the program. I interrupt debate at 1.30 to take us to two-minute statements.