Garth Hamilton (Groom, Liberal National Party) Share this | Hansard source

by leave—I'd like to start by thanking the chair for his stewardship of this very difficult report. This was a Standing Committee on Economics inquiry that went right into emotional statements from people, something we don't often do, and I think the way that you handled that was absolutely excellent. The truth of the matter is the secretariat did an outstanding job. This inquiry spanned a broad area of Australia, so I thank them for their hard work. I join with the chair in thanking everyone who gave evidence or spoke before the committee. I do want to thank the engagement of the ICA and the insurers, who were very aware of how important this inquiry was, particularly to those affected. I would note that in some cases there are actions they have already taken towards the recommendations because they engaged so fully. I think that speaks volumes, Chair, to your leadership throughout the management of that process. It is important also to echo the chair's comments. We have to talk in statistics when we are talking about an event as big as this but it was so crucial that we did hear the voices of those impacted directly. The work that was done was excellent.

The most important issue that I came across and wanted to prosecute throughout this inquiry was planning and the role it played in putting at times very vulnerable people into housing that was completely unacceptable. I remember very clearly the testimony of the CEO of the Moreton Bay Shire Council, who told us that he had to increase the area's population by 12,000 people per year. When we asked: how many of the houses that you are building are on floodplains? He said 'quite a lot'. It was this devastating thought—that the problem we are talking about is only going to get worse, and he very well knew it. I commend him for his honesty. The reality is this will probably get worse in these areas, so particularly recommendations 71 and 72 on planning speak to the heart of the issue. If we want to resolve the responses of the insurers, one of the best things we could do is reduce the number of people being impacted right at the start.

There are two recommendations that I flagged, which speaks to the report. In the whole of the 86 recommendations, there are only two that I have strong concerns about. One was recommendation No. 3. While we're looking at the response of the insurers, it's also important to take a look at the broader context of insurance. We have seen increases in insurance costs that have gone through the roof. I have genuine concerns about any actions a government may take that would good push that affordability higher, because the last thing I would want is vulnerable people to be unable to afford insurance, and this could make the problem was. I think that is a step where we have to be very careful about how we manage that process so that any changes don't result in people choosing to self-insure and drop out of that cycle. That would be the worst possible outcome.

Recommendation 70 speaks to government intervention. I have spoken briefly on the issues around affordability and how they can make things worse. I would hate to see a situation where we have an issue around the availability of insurance in Australia similar to what we saw in California. I refer to the study tour that was undertaken. I thank American chamber and ICA for putting that together. It was insightful to see a region that is often described as being similar to ours in terms of the events, the climate, the spacial distribution of houses. The private insurers have walked out of California. We heard the National Flood Insurance Plan provides only four per cent of Americans with insurance up to a maximum of $350,000. That includes the $100,000 top up from FEMA and it is just a cheque that is given to people. There is no management or mitigation, no improvement of the situation. I would hate for us to be in that situation, I really would. That was one thing that really terrified me—the thought that, while that is an extreme outcome, it is within the realms of possibility—and is one that we must avoid at all costs. I raised that concern.

I note that the insurance industry has already come together to put together responses to all of these recommendations. I commend them for that. I think they need to do that for the sake of everyone who gave their testimony. They need to see the insurers responding fully themselves. But I think it would be important for any government, before they took any steps to proceed with any policy, to get those responses from industry.

Again I thank the chair and all the committee members, particularly those who joined the committee, for their inclusion.

See this speech in context