Joe Hockey (North Sydney, Liberal Party, Treasurer) Share this | Hansard source

I thank the member for Kennedy for his question. I do declare an interest: I do pay insurance up there and the insurance has gone through the roof, particularly since Cyclone Larry.

The insurance premiums—which are being compounded by the insurance taxes, GST and so on, on the top of insurance—have risen enormously over the last few years, particularly in relation to body corporates. This is something that the member for Leichhardt has been incredibly aggressive about. He has belted down the door to my office. Perhaps I will temper that by saying he has been assertive rather than aggressive. He has been ringing the bell on this for some period of time.

This is something that the Assistant Treasurer has been working through with the insurance industry. There are some challenges, particularly in relation to reinsurance. Ultimately, the costs of reinsurance end up being directly linked to events that occur in a region. The fact that insurance premiums have risen so dramatically, particularly in North Queensland has unquestionably been linked to increased reinsurance costs. Also, obviously, one of the reasons reinsurance costs have increased is because of the very significant events that have occurred up there, including recent cyclones.

The net impact of that is that people either underinsure or do not insure. Australia, unfortunately, has a fairly high level of under-insurance.

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