Phillip Thompson (Herbert, Liberal National Party) Share this | Hansard source

North Queensland has market failure of an essential service, and that essential service is insurance. In North Queensland insurance is as essential as water and power. If you own a business, you have to have insurance. If you own a house, you have to have insurance. If you buy a house and need a mortgage, the bank requires you to have insurance. If you own strata title, it is legislated that you must have insurance. Insurance is essential, not just because of Townsville's high crime rate but also because of the high frequency of natural disasters that we experience.

The reason I say it's market failure of an essential service is that there are an increasing number of people who are simply going without insurance because they can't afford it. Premiums have continued to go up and up, but insurance companies aren't prepared to take the risk. There are many companies that just simply won't insure in North Queensland. In fact, it has gotten to the point for some types of insurance that there are no Australian insurers who will provide this essential service in Townsville. How has this happened? How has this been going on? It has been subject to a three-year investigation by the ACCC into insurance in northern Australia.

So what are the solutions? I believe the key is for all levels of government to work together, to take responsibility and to not point the finger at each other. We all have our part to play in fixing this insurance issue, this market failure. For local governments, their role to play is through mitigation. We've seen through different funding grants that these projects can put downward pressure on premiums because risks are reduced. The state can play a role today by abolishing stamp duty—and I am under no illusion that the federal government has a role to pay here and we must intervene.

In late 2019 the member for Dawson, the Assistant Treasurer, and I met with all CEOs of the major insurers in Townsville. They all nodded and said that they wanted to get on board and make sure that our premiums in North Queensland would go down. Well, they haven't done anything, except renege on their promise. The Assistant Treasurer and I were talking about the government doing a light touch to let insurers and these companies get on with what they should be doing. Well, a light touch hasn't worked. Maybe a heavy hand is the next thing that they need. If that means giving a few of them a bloody nose to make sure they fall into line and do what is required, insuring the whole of Australia not just cherrypicking, then I think that is what we must do. There are a number of options being considered. In North Queensland colleagues of mine have been speaking with the minister, and Chambers of Commerce and other peak bodies have also been coming up with ideas. A part of that is making sure that insurance companies aren't cherrypicking where they want to do business and putting Townsville in the too hard basket—which only results in no competition, no choice and market failure.

The other thing I believe we need in order to have a sufficient positive impact and create that downward pressure that we so desperately need is a government reinsurance pool. One of the findings by the ACCC, which they touched on a little bit but didn't really do a deep dive into, was that a reinsurance pool would only work in a place where there isn't insurance. Well, welcome to Townsville! We don't have insurance. Magnetic Island and other places all around the electorate of Herbert can't get insurance, but broader Townsville also can't get it.

So I believe a reinsurance pool is a good idea. The government has a reinsurance pool, which was established in 2001 for terrorist attacks. So we know that it can work. And I think that we, in North Queensland, would appreciate some government intervention. This could be extended into the regions, not just as an insurance blanket but targeted—at cyclones, fires and floods. It should not be just a blanket, because I don't think that would be appropriate. We could also look at something like a mutual obligation, with insurers made accountable to their members. We know that that has worked in other places. In the event of a crisis, the reinsurer covers part of the claims that are paid out. Insurers pay the premiums to the reinsurers in much the same way as a household pays premiums to their insurer. I think this is a good idea. It has been supported by our chamber of commerce—and also by our council, which is good because council and I don't always agree, but on insurance we're in lock step. I think it is good to have our people leading on what needs to happen, because, though I'm in the government, we know that, with any government, when they take all the lead, sometimes the clumsy hand gets in the way. We need people-driven solutions, not government pushing what's happening.

I know this isn't a silver bullet, but we know there are no silver bullets to this. The solution is multifaceted. It is difficult, but that doesn't mean it won't work.

Time is running out for us to fix this problem, because we are getting into our cyclone season. We have had floods—and we didn't think that was going to happen. In the electorate of Herbert, we've been kicked in the guts a few times, and we want to make sure that we fix this insurance debacle.

In one of my first speeches I spoke about insurance, and some good members of the Labor Party, members on the other side, came up to me and said: 'Don't talk about insurance,' because it has been kicked down the road from government to government to government, and the only people that that hurt were the people in North Queensland. You can't have these crooks from overseas coming in and jacking up insurance by 200 per cent or 250 per cent. It's just not fair. There are retirement villages that can't get insurance. I just can't fathom how any level of government, for consecutive decades, has sat back and said: 'This is okay.'

I know that the Assistant Treasurer, Michael Sukkar, is probably sitting in his office now on the edge of his seat saying: 'I can't believe he's talking about insurance again!' But I know that he's working hard on it. I know that he is working with people, including the councils and the coalition members, and I'm sure he's had some feedback from the opposition on how we can best tackle this, because this isn't about political point scoring; this is about making sure that people who are doing it tough, in places like Townsville that have had cyclones and floods and other natural disasters, can get insurance, because, at the end of the day, it hurts their hip pocket. When you are taking more money away from people in these exorbitant prices and having different insurers pull out, it hurts, and it's not fair.

I know that the state government had an insurance agency; that's been floated by different people in the public. All we care about and all the public cares about is us just getting on with this and fixing it. I know there's a lot of pressure on Minister Sukkar, and I have a lot of faith in him to be able to come to the table and address this issue and fix it. My colleagues in the north speak a lot about insurance. It's not a topic that I want to talk about. I want it fixed. I don't want retirement villages or people on Magnetic Island or people who live in areas of potential floods—or, as we saw, people in flood areas—not being able to get insurance or having to pay too much. We really do do it tough in the north. I know this is an issue around the country and definitely in northern Australia, but I just want to make sure that we're doing this the right way, at the right time, and for the people. A reinsurance pool is exactly what I believe should happen, and I know it's supported by my colleagues.

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