Wednesday, 30 March 2022
Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022; Second Reading
I am in continuation on this. Labor supports this bill and knows that something needs to be done to combat the rise in insurance premiums that North Queenslanders face due to the growing threat of natural disasters through that region. We have seen between 2007 and 2019 average home insurance premiums rise in real terms by 178 per cent in northern Australia, and combined house and contents rose by 122 per cent in northern Australia but decreased by three per cent in real terms in the rest of Australia. That gives you a real sense of the challenge facing those in North Queensland. The government tasked the ACCC with looking at what can be done, and the ACCC had an inquiry into insurance in northern Australia and recommended a number of measures to improve insurance affordability. However, it's important to note that they did argue against creating a reinsurance pool. The government has taken up none of those recommendations of the ACCC report and has instead gone ahead with the reinsurance pool. Many of those ACCC recommendations would have made a difference to insurance premiums over the course of this government. The LNP government have had nine long years to do something to reduce insurance premiums and yet they have acted only in the final days of parliament and days before an election is called.
After all this time we still can't get any details from the government about the supposed savings to average insurance holders. Australians know that they just can't trust this government's claims when it comes to this. The PM said first that it would save those people in North Queensland 10 per cent on their premiums. Now you have Minister Sukkar saying people will save 46 per cent for home and contents insurance and 58 per cent for strata insurance. Although the government have been using the language that those savings would apply to people with the most acute cost pressures, they still won't detail or define how many people would fit in this category, so we have no idea how many people they're claiming would benefit from these savings. We had the Prime Minister saying first that it would be 10 per cent and we have Minister Sukkar now saying something different, and they won't actually release any modelling or detail to give proof to their claims.
The government have been very secretive about the modelling that underpins these apparent savings claims. Despite the Senate Economics Legislation Committee inquiry into this legislation, the government continues to claim public interest immunity. The government's refusal to release this critical information has made it extremely difficult for the insurance companies to assess these claims and model the impacts on their customers in North Queensland. We heard this in the Senate economics committee inquiry into this bill. A number of witnesses raised concerns about the lack of transparency on this modelling. The RACQ submitted to the committee:
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.
During hearings, representatives of the RACQ confirmed that they still hadn't heard anything regarding the modelling and said:
… the reality is that we cannot determine the savings at this point in time until we see more information and that includes the price from the ARPC. We need to understand what the pool is going to cover.
Similarly, the Northern Australian Insurance Lobby said it would like to see the modelling, as it was uncertain who would actually see the savings. They said:
We would love to see the modelling and how that will impact policyholders, because it says 'up to 46 per cent'. Are 90 per cent of people going to get a five per cent saving and only 10 per cent get the 46 per cent saving?
Sure Insurance, which has a lot of coverage in North Queensland, were concerned that these changes could result in their policyholders actually receiving an increase in insurance premiums. They said:
The prospect of some policy holders being potentially handed a non-negotiable price rise because of the pool's introduction is clearly not acceptable for Sure's customers, and may potentially be viewed as a failure of government policy in its stated public commitment to insurance affordability.
That is a business grown in North Queensland, providing affordable insurance to those people, saying that they are nervous that this could actually lead to an increase in premiums for their customers.
As you can see, it's not only Labor that has been calling for transparency on the modelling; it is the companies that are providing insurance to North Queenslanders, which makes it more outrageous that, while North Queenslanders are paying record prices for insurance, this government claims it is not in the public interest to release this information. How can North Queenslanders trust this government, which still hasn't acted on the findings of the ACCC report and, having has spent nine long years in power, has done nothing to ease the cost of living and is now trying to pass reinsurance legislation in the last moments of parliament and yet won't release the critical modelling underpinning this legislation?
In the economics committee Labor raised concerns about the claims period. Currently the legislation has a 48-hour claims period following the downgrade of a cyclone by the Bureau of Meteorology. Many groups are saying that this is completely inadequate. These calls are represented in the report. They were made by groups like the RACQ, the Insurance Council of Australia, the National Insurance Brokers Association, the Northern Territory Chamber of Commerce, the Australian Small Business and Family Enterprise Ombudsman, the Council of Small Business Australia and the North Queensland Regional Organisation of Councils. So a wide array of organisations are concerned about the limiting nature of this legislation for insurance claims as well. This is best evidenced by the North Queensland Regional Organisation of Councils, which stated in its submission to the committee that, in its opinion, 'a claim period of 48 hours is inadequately short.' It went on to say:
For example, the Herbert River and the Burdekin River catchments cover 132,330 km², or about 7.6% of Queensland. In catchments this size, it takes several days for the full effect of cyclone related floods to be felt.
It would be unfair for communities affected by TC-related floods to miss out on the benefits of this legislation, simply because they live in a large catchment where flood waters take more than 48 hours to reach them.
For North Queensland, a 48-hour claim caveat is inadequate and needs to be extended.
Labor has called on the government to spend more on mitigation as well. Labor is committed to spending $200 million a year on disaster prevention and mitigation. The Morrison government set up a $4 billion emergency response fund. It's now got $4.7 billion in it and has accrued $750 million in interest while the government has not spent a cent on mitigation projects.
I've seen firsthand how crucial these mitigation projects are. In April last year I travelled to Roma with Labor's shadow assistant minister for financial services, Matt Thistlethwaite, and we met with Mayor Tyson Golder, who showed us the benefits the flood levee has brought to Roma and how it has led to reductions in insurance premiums for those in town. The levee was a great example of how governments can deliver important infrastructure projects that prevent flood damage to houses and businesses and lead to ongoing savings in insurance premiums. These are the kinds of projects we need to see the government invest in to protect businesses and households and also help reduce the cost of insurance premiums in North Queensland.
Unfortunately, as we've seen with the reinsurance pool and the issue of the ongoing exorbitant costs of insurance in North Queensland, this is a government that has had nine years to act. It finally try to act now before parliament finishes and days from an election being called, but you can still have little confidence that this is going to lead to a reduction in insurance premiums for those people in North Queensland who need it the most.
I rise to make a contribution having happily been a member of the northern Australia infrastructure committee and having travelled quite extensively, particularly in health committees, across the north of this country. Invariably, no matter what policy we were interrogating, the issue of insurance for people in the north would come up. It's like they're the canary in the coalmine for the rest of the country.
I am a senator for New South Wales. Overnight, people in Lismore were once again having to evacuate because the reality of what is happening with our climate—which has been long denied by those opposite—has actually been doing its work and changing the way in which our planet is operating and the way in which we are able to live going forward.
Not everybody has insurance. Sometimes you might have just forgotten to fill out the form, but many times it's because people hit a point where they simply cannot afford to do it anymore. They weigh up the risk and the reward. Household insurance can now cost $2,000 in a non-high-risk environment. What happens when you get to the point—as has happened in northern Queensland, and I see Senator Malarndirri McCarthy here from the Northern Territory, as well as Senator Watt. They know all too well that there has been a 300 or 400 per cent increase in insurance in the north of this country? I'm delighted to see people back in the building and here in the gallery, because you know what I'm talking about.
An honourable senator: The mayor of Alice Springs is here too.
I recognise the mayor of Alice Springs here; it's great that you've joined us in the Senate. I bet that you and your council and your state government know about this issue. This government knew about this issue. It's known about this issue for three terms, for nearly 10 years, and, in just a matter of weeks, they're going to line up, and they're looking for us to re-elect them to have another crack.
Here we are at the very last day that the Senate is sitting. So urgent is this need, which has been known to the government for a decade, that they finally get the car into gear and bring a piece of legislation in here. It's beautifully titled because, with a government that's all about marketing, the title matters. Forget about the substance; it's the con job from the top—from Mr Morrison, whose character was revealed in this chamber last night by Senator Fierravanti-Wells. She knows him. The longer that guy hangs around, the more Australians are learning about him. The ultimate con artist. The ultimate marketeer. He's not a man for leadership and not a man of integrity.
This is what he has called it: Treasury Laws Amendment—well, it has got to come from the Treasury department—(Cyclone and Flood Damage Reinsurance Pool) Bill. Doesn't that sound good to people who can't afford their insurance? They think: 'Oh great! The government are going to come and rescue us. Because I can't afford $2,000, $4,000 $6,000 or $8,000—because I can't afford from $2,000 to $8,000 to insure my house—the government are charging in, albeit belatedly, on their white horse at the last minute and they're going to make it possible for me to insure my house.'
An honourable senator: But they've missed the battle.
They've missed the battle—absolutely. They've missed the battle for sure. But do you know what else? They're riding in on a horse that's a pretence. When you start look at the fine print in this piece of legislation, about who might be eligible to get some bit of assistance with their insurance, you see it shrink and shrink and shrink. That's the problem.
Senator Watt made a fantastic contribution yesterday. I also acknowledge Senator Chisholm. They fight here every day for the people of Queensland. They talked about the market failure. They talked about outsourcing of government responsibility, to make policyholders pay and pay for what has been emerging in the last several years as a failed market. I believe it was Senator Watt who drew my attention to the fact that this legislation indicates that people with the most acute cost pressures might just might get something. If you're one of those lucky few who are subject to what needs to be classified as cyclone damage—not flood damage; that's not included, although that's part of what will be implied by the marketing man who is no leader—you might get something. If you're one of those few lucky ones, at the very, very best you might get 46 per cent. That's the line that goes out from the government and that's what we hear here day in, day out: the con job. 'What's the biggest way we can gild this lily and pretend we're actually caring for the people of Australia?' It's all announcement and no delivery.
They're bringing this bill in at this point in time and, as little as it is and as little as it does, Labor will support it because people need something. They absolutely, desperately need something, and, if this is the best that this government can do, we're not going to stop the people of northern Australia getting the relief that they can get—that small bit. But we've got no confidence in what the government have told us. We know that, despite the press release and the numbers that they put out, the fine print reveals a different story. In fact, the claims that they make and the numbers they put out are really just pulled out of the air. They can't produce the modelling. Remember when you were at school and the kids who were fantastic at maths went on to be actuaries? They do their job for the country. They tell the truth. They write the numbers. They do the sums and they figure out what it's going to cost. That's modelling. The government claim they have it. They also claim that it's not in the public interest for you to know what's in that modelling. It's breathtaking. It's the art of a conman and trickster. That's what happens when you have a man who's leading the country by PowerPoint and marketing plan, without an ethical bone in his body and with no moral compass, integrity or ability to tell the truth to the people of Australia. The people it's going to hurt are the people who will be sold this false promise by this government—people in the north.
I tell you who else is struggling today: those people in Lismore. We all know that the Prime Minister doesn't hold a hose when the fires are burning. I will acknowledge that the Prime Minister had COVID in the time that Lismore was suffering worst in recent weeks, so we'll give him a leave pass for that. But surely he could have sent someone from the government. He has a Treasurer. He has a whole raft of ministers who could have done the job of going to Lismore, seeing what was really going on and giving people hope, heart, comfort, resources and a plan. They talk a big game for business, but they fail to deliver.
It took Mr Morrison nine days. People's houses were awash, with mud-stained walls. Three thousand houses, I believe, were declared unfit for habitation, in a community where rents are going through the roof and the market is already very small. The need was desperate on every single level. Instead of sending somebody, Mr Morrison hung on and then hung on a bit more until nine days later, when he could show up and do a photo-op. What did he actually deliver? He shut a few roads so that he wouldn't have to meet the community. He's a Prime Minister who is running from responsibility, and he should run fast and hard because he's incapable of leading us in the way that we deserve. He's incapable of leading for people who are profoundly vulnerable right now in Lismore.
There's a contrast. We have amazing people at state level in the Labor Party. I've been waiting for the Prime Minister to come out with some sort of plan that would be digestible for the people of Lismore, to give them hope and to actually provide money, resources and targeted, planned support for businesses. Businesses in regional communities are the heart of the community—no businesses, no jobs. Labor understands that. You need great jobs that pay and businesses that are successful. All that can work together in an ecosystem when it's properly supported by a government that doesn't waste and rort money and buy seats for itself.
When Mr Minns, the Leader of the Opposition, went up to Lismore, he had a flood response plan. We haven't heard that from the government of Australia, with all its resources. It's practical in nature, because all the weasel words, all the magic words, all the marketing words and all the pretence of the Prime Minister cannot actually meet the reality of ordinary Australians. They needed a plan, and this is what a plan might sound like. Mr Minns said: 'What do families and businesses need? They need the waiving of local and state government fees and charges for those impacted by the flood.' Mr Morrison says: 'Oh, it's not my responsibility. We're talking about local and state costs.' But where's his conversation with the state to say, 'I know that you're going to have a big financial burden there, so how can the government of Australia help you?' That hasn't happened. Mr Minns said, 'Waive or defer payroll tax for small businesses in flood affected areas'. I'm pretty sure, having grown up in a family business and continuing to have a business with my husband, that, if I were in Lismore and I were inundated, that would be good news to hear. What can Mr Morrison do about it? Hands off. Do nothing. Pretend.
Perhaps somewhere down the track, if he's elected again, at five minutes to midnight we will get another bill like the one that we're debating today: wholly inadequate, full of contradiction and unable to be verified because of a failure to release modelling. If we're lucky, that's what we might get from Mr Morrison and his climate deniers. That's where we are, Australia: at the tail end of a decade of denial of climate realities.
You can only pretend for so long before the game's up. Well, the game's up, the time's up and Mr Morrison's time is absolutely certainly up. It's time to elect a decent government that will stand for all Australians—a government that, when you are in need, you can count on to deliver the basic things you need to get back on your feet and have a little bit of hope. We are capable of doing that as a nation, but not with this party in government and not with the soulless, heartless, valueless Mr Morrison in charge.
I rise to contribute to this debate on the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022, a bill that is being debated when we are seeing the effects of the climate crisis before our very eyes. The climate has changed. These floods that we have experienced and witnessed—and that, sadly, many have lost their homes and their livelihoods as a result of—have been fuelled by the climate crisis.
I take the opportunity today to contribute to this debate because something extraordinary happened in this place yesterday: the Environment and Communications References Committee was forced to make an interim report about the conduct of a US company. This was part of the inquiry into the Beetaloo basin. This US company, Tamboran, has just in the last month received $7.5 million in public money from the Morrison government. This company—which has a wholly owned subsidiary, Sweetpea Petroleum, registered to a notorious tax secrecy jurisdiction in Delaware—is now involved in getting public money from the Morrison government to frack in the Beetaloo basin.
As part of the Senate inquiry into the Beetaloo drilling program, the committee wrote to this company on three occasions, inviting them to appear and to answer questions in light of receiving this public money. With the first two requests, the company replied, saying they did not want to appear. The last request invited them to reconsider, and there was a delay in the response, but they again refused and made the claim:
… we understand we are absolutely entitled not to appear if we wish.
Let me be very clear about this. A Senate inquiry asked a company that is in receipt of public money to appear before us at a hearing to answer questions, and this company says it doesn't have to come. The committee then resolved to issue a summons to compel this company to attend.
Can I confirm that we're debating the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022? If Senator Hanson-Young wants to make a contribution in regard to a Senate committee report, there are opportunities later in the day to do that.
Thank you, Madam Acting Deputy President. I appreciate that. The reason this is being put on the record today is that there will be changes to the sitting schedule later and I just want to make it clear that this relates directly to this bill.
I think we conduct the business based on the Red that is before us. As to whether or not what Senator Hanson-Young is speculating about is accurate, we will have to wait to see, but the matter before you in the chair is the Treasury laws amendment bill, not consideration of a committee report.
It is related to this piece of legislation because what this company is doing is making climate change worse. What this company is doing, with taxpayers money, is making climate change worse, and our job here in the Senate is to scrutinise and to hold government to account, and to hold those who take and are in receipt of public funds to account. It is absolutely disgraceful that a company, despite being given a summons, refuses to appear.
Senator Hanson-Young, I think we've traversed this issue. I've made my point clear. I really do think that, unless you are speaking on this piece of legislation, I would invite you to draw your comments to a conclusion.
The conclusion, at the end of this debate on this bill—a bill that is spending public money and asking for public money to be spent on cleaning up in response to the climate crisis—is that here we have a company that refuses to comply with a summons. Let me be very clear here: this is a bad precedent for any company, for any process, for this Senate to not take seriously. I would appreciate it if the Senate were actually to give proper time to debate and discuss this matter, because it is about the powers of this place. So I will conclude my speech here, but let me say—it's a message to the government and to the opposition—please, give us some time this afternoon to make sure we can discuss this properly. Otherwise, the powers of the Senate are useless.
Firstly, I would like to thank those senators who have contributed to this debate. The Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022 will establish a reinsurance pool for cyclones and related flood damage. The pool is backed by a $10 billion annually reinstated Commonwealth guarantee.
Access to affordable insurance is vital to the economic prosperity and resilience of Australians who live and work in northern Australia. This bill will deliver on the government's commitment to maximising northern Australia's potential and to ensuring that Australians in cyclone prone areas have access to affordable insurance. The bill will improve the accessibility and affordability of insurance for households and small businesses with cyclone and related flood damage risk by reducing the cost of reinsurance. This is estimated to reduce premiums by $2.9 billion and cover more than 800,000 household, strata and small business property insurance policies in northern Australia.
The pool is also expected to increase competition by encouraging greater insurance participation, greater insurer participation in cyclone prone areas and support higher levels of insurance coverage for property owners. The savings generated by the pool will be targeted at policy holders with medium to high exposure to ensure that northern Australians facing the largest insurance affordability pressures receive the greatest benefits from the pool.
Following a direction from the government, the Australian Competition and Consumer Competition, the ACCC, has begun work to monitor and collect data to ensure that savings are passed on to policy holders and that the reinsurance pool is delivering on its intended outcomes. In addition, the Treasury will undertake a 12-month review of the pool.
Finally, I would like to thank the Senate Economics Legislation Committee for their consideration of the bill and for their recommendation that the bill be passed. I commend this bill to the Senate.
I move the second reading amendment circulated in the name of Senator Watt:
At the end of the motion, add ", but the Senate resolves that:
(a) there be laid on the table by the Minister representing the Treasurer by no later than 1 April 2022:
(i) the cat modelling or any other modelling provided to the Government during the consultation process for the establishment of the cyclone and related flood damage reinsurance pool, and
(ii) any other documentation that shows the figures used to make claims by the Government that savings or cost increases for insurance consumers will be achieved by the introduction of the cyclone and related flood damage reinsurance pool; and
(b) if the Senate is not sitting when the documents are ready for presentation, the documents are to be presented to the President under standing order 166".