Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

When I talk to people who live on the Nepean River or the Hawkesbury River about cost-of-living pressures, one particular cost rears its head. For those who live on the flood plain, it's home insurance, and that's if they're able to get it. Many people can't find an insurer who will offer them flood coverage, or the price that they're asked to pay, which can be up to $35,000 a year, is just completely out of reach. It's tempting to hit out at the insurers for gouging, but after spending years trying to get to the bottom of this pricing issue, and at the end of a more than 12 months long inquiry into flood insurance, I know that the simple answer is not necessarily the right answer.

Residents shared their experience about insurance with the inquiry via surveys and hearings, including in Richmond last May. Some of that evidence has been quoted in the final report, Flood failure to future fairness. I want to thank all of those who gave evidence, and that includes Hawkesbury City Council and many residents of the area, for whom reliving those difficult times was in itself a really challenging thing to do. There are 86 recommendations in this report, covering a wide range of issues affecting flood insurance, including expecting the industry to do better by those who are insured when they make a claim. Of all the recommendations in the report, I want to focus on affordability, access and mitigation. Mitigation is a non-negotiable. Without practical, tangible steps to reduce the potential impact of floods, whether it's lowering the level of Warragamba or whether it's looking at levees and raising evacuation roads, nothing else is sustainable.

I want to see the Australian government continue to fund community-level mitigation, ensuring at least $200 million a year, every year, as the Albanese government has introduced. We're starting to see changes, but we need that to be ongoing. I want to see individuals get the support they need so they can build back better from a flood, and they should be rewarded with lower premiums for the efforts that they make. I want to see insurers explore more innovative products for homes and small businesses, particularly where homeowners have ways to minimise the repair or clean-up costs by being prepared, like putting their kitchen on wheels. I want to see buyback options for homes with very high flood risk where alternative mitigation measures are unlikely to manage the risk. If you're in a home where you can't get insurance, it's likely a future buyer won't be able to get insurance, and you need to have some choices.

In our report we make it clear that no-one wants to see any more housing development in high-risk areas. We've also singled out the removal of state based taxes, which currently add 20 to 40 per cent to the cost of the premium. New South Wales continues to charge insurance customers to fund emergency services, adding a third layer of tax that increases premiums. And we've recommended that the federal government look at the appropriateness of a government supported reinsurance arrangement to make flood insurance more affordable.

The real message of the report to every parliamentarian and every government—local, state and federal—is that there is urgency to this problem. We are not alone in the world, though, in facing these challenges. On a visit to the US a few months ago with the Insurance Council of Australia and the American Chamber of Commerce in Australia, I spoke with insurance and government officials from California through to Washington, DC. The challenges we face are so similar that we could almost finish each other's sentences.

What we have to do in Australia, though, is be careful in any design of a scheme. It has to be done walking alongside the insurance industry, state and local governments and, most importantly, homeowners. It's time to look at how we make sure that people who have homes on the flood plain can afford insurance of what is likely their biggest asset. Now is also the time to have hard conversations about buybacks, about making individual homes safer and more resilient and stopping that new development on the flood plain. None of this can be done without working closely through all these different parties. What we don't do now will cost taxpayers further down the track. It'll undermine local economies, and it will lead to heartbreak for the most flood-prone homeowners.