Zali Steggall (Warringah, Independent) Share this | Hansard source

I move:

That this House:

(1) notes that:

(a) the frequency of severe weather events is the dominant reason home insurance premiums are skyrocketing, fast becoming unaffordable and in turn, fuelling inflation;

(b) severe weather events are already costing the Australian economy over $38 billion a year and this cost is predicted to rise to at least $73 billion per year by 2050 if climate change continues unmitigated;

(c) over 12 per cent of households are facing extreme insurance stress, paying more than four weeks of gross income to home insurance premiums, risking underinsurance of their properties;

(d) every $1 invested in climate adaptation measures can save up to $11 in disaster recovery; and

(e) the Government continues to allocate significantly less funding to resilience and adaptation than to disaster response and recovery, with less than ten per cent of Australian homes being climate risk resilient; and

(2) calls on the Government to:

(a) allocate funding to:

(i) the Resilient Building Council to expand the home and business resilience ratings scheme to incentivise home adaptation measures and put downward pressure on insurance; and

(ii) expand the Australian sustainable finance taxonomy to include adaptation, to unlock global capital for private sector led resilience;

(b) include climate resilience and adaptation as a matter of priority in upcoming updates to the National Construction Code and require resilience for all government investments;

(c) accelerate the development of a national standard for climate adapted planning controls; and

(d) ensure equitable access to insurance by helping lower income households and communities facing home insurance stress and underinsurance in high risk areas.

Climate risks are a problem we are facing now. They're impacting the safety of our communities, costing ordinary Australians and fuelling inflation. Severe weather events are already costing the Australian economy over $38 billion a year, which is predicted to rise to at least $73 billion per year by 2050 if climate change continues unmitigated.

We are in the grip of 'heatflation'; in Australia we are facing increasingly extreme events, from floods to bushfires to cyclones, damaging our homes, infrastructure and communities. Impact from extreme weather is driving insurance costs through the roof, and that is fast outpacing inflation, which in turn is fuelling the cost-of-living crisis. In Warringah, local Facebook group chats are alive with people realising that insurance premiums are up a median of 28 per cent across the board. Putting downward pressure on insurance can be achieved by investing in adaptation, but we don't hear much of that from the government and certainly not from the opposition.

We know that, for every $1 invested in adaptation and resilience building, we get a return of $11, yet historically there has been a 97 per cent allocation of funds to disaster recovery rather than prevention because we know that, if you under-report and underacknowledge the risks and the impact that is coming, you don't have to deal with the cause. For too long that has been the case, so I'm calling on the government to reverse this, to plan ahead, to act now, to prioritise adaptation and resilience building and to make sure we are keeping our communities safe.

Insurance has risen across the board for all Australians, but it's astronomical for those in disaster zones and high-risk areas. When I went doorknocking in flood impacted pockets just in my community in Warringah, I found some constituents' insurance had jumped by double-figure marks or been completely denied. These people fall into the 12 per cent of Australians who are facing insurance stress as their home insurance is as much as two months salary and is simply unaffordable or unavailable. Across Australia, those areas at the highest risk of underinsurance are too often low-socioeconomic areas, those that can least afford it.

Today the Insurance Council of Australia released its annual catastrophe report, which showed that the last year of extreme weather events had collectively led to almost 157,000 claims and $2.2 billion in insured losses, highlighting the risk of underinsurance. Over the past five years, Australia has reached an average of $4.5 billion a year in losses, with floods being the main driver of this increase.

So we urgently need to reduce and limit warming by mitigating emissions. You cannot acknowledge the scale of this problem and then do nothing for years on end. But we also must now protect communities, and especially small businesses, by being clear about the scale of the challenges that they face with accelerating climate risk. In my electorate of Warringah, there are flood impacted zones where some of my constituents have invested to make their homes more resilient, only to face—because this is not recognised by insurers—extortionate insurance costs, leading to underinsurance, or no insurance being available.

Meanwhile, we have the Resilient Building Council joining the dots and using its Resilience Rating tool to provide insurers who have committed to the scheme, such as IAG and Suncorp, with the confidence and certification needed to in turn reduce insurance costs. Programs like this and the inclusion of adaptation in the sustainable finance taxonomy must be funded to help families make their homes resilient and unlock private capital.

Likewise, we need to ensure that the millions of new homes being built are built to withstand the new world they will be existing in. Communities need to be safe. They must be climate resilient and, in particular, heat resilient. There must be changes to the National Construction Code to include adaptation and minimum resilience standards for public housing, and we must accelerate national, state and territory coordination to ensure that no house is built in a high-risk disaster zone. Tomorrow I will hold a roundtable discussion with stakeholders, including economists like Guy Debelle, about what is needed to manage climate risks and the escalating costs. I call on the government to do more in this space.

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