Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

I thank the member for Kennedy for the motion and acknowledge his strong advocacy for his constituents in North Queensland over many years. At the outset, as a fellow Queenslander whose community has been severely affected by natural disasters, I want to assure him that the Albanese Labor government is committed to improving insurance affordability for northern Australian households and businesses. Our priority is to put downward pressure on insurance costs by addressing underlying risk as a result of more intense and frequent natural hazards.

I was on a parliamentary committee with the now-member for Morton, who looked into this more than a decade ago. The Cyclone Reinsurance Pool is helping to put downward pressure on costs and delivering lower premiums for consumers in areas exposed to high risks of cyclones. It's backed by a $10 billion fund, and the member for Kennedy is correct in the way he put it—it came out of the terrorism legislation. It was a $10 million Australian guarantee. It's also been administered by the Australian Reinsurance Pool Corporation.

The government's committed to making sure that that pool's effective as possible. There's an in-built review taking place in 2025, three years after commencement. It's all part of our broader efforts in terms of cost-of-living relief for people. We want to make sure there's downward pressure. To put this in context, we're talking about 3.3 million households, 220,000 small businesses and 140,000 residential strata and small commercial strata properties. That's why it's so relevant for the member for Kennedy to bring this motion, and it's a huge issue for northern Australia. This pool is just one measure in helping to take pressure off northern Australia.

We're implementing the pool as legislated by the previous government. All major insurers have joined the Cyclone Reinsurance Pool, and about 98 per cent of home insurance policies are covered. In October this year, the Australian Competition and Consumer Commission reported positive early signs and only early signs that the pool is working as intended and starting to deliver savings to policyholders. That was the evidence that was given in a public hearing in Brisbane with the Joint Select Committee on Northern Australia, which looked into this as well. There were positive early signs. The impact on prices is not what people were led to believe at all by the Morrison government. During the course of that public hearing, I recall that we had people from chambers of commerce up in Townsville and elsewhere saying that they knew this wasn't going to have the impact that they were led to believe, but it has had some positive impact.

Any change to the design of the pool will have to be considered as part of a comprehensive review in 2025. The House of Representatives Joint Standing Committee on Economics has looked into this, and the member for Calare and I were both on that. I was up there in Townsville and Cairns getting evidence from people. There are issues in relation to the 48-hour rule. There are issues in relation to a whole range of other factors associated with that rule. If we broaden it out, it becomes more of an issue and it could cover more of Australia.

But this is important. There was a decade of neglect in natural disaster funding and a whole range of areas under the previous government. We have put a billion dollars over five years towards disaster prevention and resilience projects, through the Disaster Ready Fund, and that's really critical. In the October 2022 budget, we provided $25 million for initiatives to improve affordability issues driven by natural hazard risk. We are getting on the job of putting downward pressure on those, and we've established a hazard insurance partnership to improve data sharing between governments and insurers to better understand where to invest to reduce that risk. The House of Representatives Economics Committee, which is so ably led by Dr Dan Mulino, has made a whole series of recommendations that deal with natural disasters and floods, and I'm looking forward to the government's response. I commend that report to the member for Kennedy. It's worth having a look at what that says.

The ACCC is expected to publish its third monitoring report in December this year, which I expect will provide further insights into the impact of the cyclone pool on savings for consumers in the 2023-24 period. We're going to consider the 86 recommendations from the flood insurance inquiry to which I have referred, and we'll respond shortly. We know this is an important issue for all of northern Australia, and we know that the member for Kennedy is passionate about it. As a Queenslander, so am I.

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