Bob Katter (Kennedy, Katter's Australian Party) Share this | Link to this | Hansard source

I move:

That this House:

(1) calls on the Government to urgently amend the Cyclone Reinsurance Pool to ensure that all Australian insurers provide residents in cyclone-prone areas with options for house insurance premiums that are comparable to those paid by the rest of the country;

(2) notes that:

(a) with the exception of Sure and Allianz, insurance premiums in Northern Australia are significantly higher than the national average, placing an unfair lack of choice and financial burden on northern Australian homeowners;

(b) the Cyclone Reinsurance Pool has failed and needs further and urgent negotiation; and

(c) 25 per cent of North Queensland is currently not insured; and

(3) calls on the Government to:

(a) fix the Cyclone Reinsurance Pool before another disaster strikes in the north; and

(b) ensure that:

(i) all insurers offer affordable and fair insurance coverage charges in line with the rest of Australia; and

(ii) specific insurers are not over-exposed.

It may be well be asked by the free marketeers, the moronic class here, who still seem to run this place: why should you get preferential treatment? It's nice and easy in free markets because you don't have to think, do you? That's a wonderful advantage when dealing with people who have great difficulty in thinking. Why should you be treated differently? Well, I would say to you: Why should we continue to run the cane industry and the cattle industry at margins that no other farmers on earth are asked to run their farming operations? Why should we be asked to do that? Why don't we just close down the industry?

In actual fact, thanks to you people, there is no wool industry in Australia. It was the biggest export-earning item in the entire nation's history, for 200 years, when the then incoming Labor Keating government abolished the wool scheme. Now about 10 per cent of our sheep herd is left, if that. So why should we keep them going?

That brings us to the subject of the cyclones. If we want to grow cane, it grows very favourably where there is a lot of rainfall. Where you have a lot of rainfall, that usually involves cyclones, and the United States of America would be a good case in point. So I would answer your question that way.

The greatest governments this nation has ever seen came out of Red Ted Theodore. I'm very proud to say my family is associated with the foundations of the Labor movement. Very sadly, today the ALP stands for the exact opposite principles for which the great Theodore Labor parties were formed. The Labor Party split in two, and half went to the Country Party. That's how I ended up in this place.

Let me return to the issues of the cyclone and the damage. I put on record my thanks to the member for Dawson, who showed immense courage as one of the very few people that have come through this place in the 30 years I've been here who, out of the courage of his convictions, again and again voted—and it had a very traumatic effect upon him—against his party for things that he believed were the right things to do. There is really little precedent for that in this place. Anyway, he was prepared to cross the floor, so out of his commitment we got the reinsurance pool. If he and I had started voting with the opposition, then the government would have been in trouble. The government—quite rightly, and I think they thought it was a good thing to do anyway—moved the reinsurance pool, and the incoming government has been very positive towards the reinsurance pool.

The reinsurance pool was founded to overcome terrorism. I hope I've got my facts right here. Thirty-five years ago there were a couple of terrorism scares in Australia, and they instituted this reinsurance pool. It had about $15 billion in it. It had never been touched for about 30 years, and we moved that the reinsurance pool cover extraordinary events in North Queensland. They don't occur very often. We have cyclones, yes, but most of them are fairly mild, and modern housing can deal with a cyclone—even a strong cyclone. The reinsurance pool was triggered for extraordinary events— (Time expired)

Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Andrew Gee (Calare, Independent) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to 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.

Andrew Gee (Calare, Independent) Share this | Link to this | Hansard source

I rise to join the member for Kennedy and, indeed, the member for Blair in wanting to ensure that the cyclone reinsurance pool is effective and delivers meaningful assistance and help when disaster strikes in Queensland, northern Australia and, in particular, North Queensland, which the member for Kennedy is proud to represent.

I am from central western New South Wales, but our area is all too familiar with natural disasters and how hard they hit, often without much warning, leaving enormous devastation and tragedy where homes and, sadly, lives are lost as well. It was only last Friday that my constituents and I paused to remember the two-year anniversary of the 2022 floods, which devastated communities right around our electorate, particularly through the local government area of Cabonne but also in places like Wellington. It was a very sad commemoration, and we had a very poignant service, a small service, to remember the lives lost in Eugowra on that fateful day.

As the member for Blair points out, the House Economics Committee has handed down its report on the inquiry into the insurers' responses to the 2022 major floods. The report is called Flood failure to future fairness, and there was quite a bit of evidence taken during the inquiry stage as to the effectiveness of the cyclone reinsurance pool. The inquiry looked at the views of stakeholders, consumer groups and councils on the feasibility of the reinsurance pool for flood. The Australian Consumers Insurance Lobby proposed the Australian government commission an inquiry into the feasibility of establishing a federal flood reinsurance pool, and Disaster Legal Help Victoria believed that the Australian government should seriously consider government supported reinsurance pools, like the cyclone pool. Indeed, Ballina Shire Council recommended that governments investigate options to provide a reinsurance scheme for areas that the insurance market is no longer able to cover at affordable prices. The Financial Rights Legal Centre, CHOICE, the Consumer Action Law Centre and Westjustice urged the inquiry to consider whether measures such as widespread subsidies or an expanded government reinsurance pool should cover flood as well, and this was echoed by Legal Aid Queensland.

One of the recommendations that the committee made was that the Australian government consider measures to improve the affordability of flood insurance for existing policyholders with high-flood-risk properties, including the appropriateness of a government supported reinsurance arrangement. It's clear that there is strong appetite amongst stakeholders and residents around Australia for reinsurance pools, but, as the member for Kennedy has pointed out, we need to make sure that these pools are effective and that they will deliver the required results.

I commend the member for Kennedy on his interest in this topic. It is of massive interest to his constituents and many in his area, and I think it's vitally important that the pool is effective and it does deliver affordable insurance coverage for affected residents. The member for Kennedy has stated that 50 per cent of households in northern Queensland are either uninsured or underinsured. This is a very concerning statistic that the member of Kennedy has brought to this House. It highlights the need for vigilance, with respect to the reinsurance pool, but also a commitment from the government to make sure that it is operating effectively.

I'm heartened by the words of the member for Blair, who served with me on that committee. He has a very strong interest in the cyclone reinsurance pool. I'm heartened by his words that the government is backing it in and that we will know more results as to its effectiveness very soon. I commend the hardworking member for Kennedy for bringing this important topic to the House, and I also commend the member for Blair not only for his words today but also for his work on the committee and the report which I have discussed earlier in my remarks.

Andrew Wilkie (Clark, Independent) Share this | Link to this | Hansard source

I thank the member for Calare for their contribution. The time allotted for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.