Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

It is quite a complex issue you raise about whether or not there would be a reduction in premiums. For the new stock we are talking about, the premiums would be paid by the housing authorities, where they insure. They may self-insure in some jurisdictions, so that government would be carrying the cost of the insurance itself—in other words, it has not gone and taken out insurance. So obviously there is no change for the governments who do that through their housing authorities. The change would be for the state governments that are self-insuring. Presumably there would be a reduction in claims, not through private insurance but through depreciation and damage, repair et cetera to the building, whatever the circumstances are.

I know a number of actuaries through my interest in issues around superannuation. I think this would be a worthwhile issue, because there would be quite a complex set of issues to consider. Yes, you would expect the cost of insurance to come down over time—as to the extent or the time frame, I could not hazard a guess—but there may be other factors that counterbalance the issue of better designed and constructed homes. For example, and I am just speculating here, it may be that, because you have a shift in the demographics of the population, you do not have a reduction in premiums, for other reasons. I do not know. There would be quite a complex set of factors involved in making an actuarial projection about insurance premiums over time. It would also be reflective of historical claims and whether there is confidence that they would start to decline for the reasons that you touched on. It would be a complex set of issues that actuaries would be able to advise us on, so I could not give an indication today whether or not the premiums would come down.

I am just trying to think of the best way. Perhaps I could organise a briefing through the Government Actuary, who falls within my direct responsibility. The Government Actuary may be able to do that. If you want that sort of briefing before tomorrow, it may be possible to organise it. I am hesitating a bit because I did not anticipate in this debate a call on the Government Actuary, but I can certainly arrange for the Government Actuary to sit down with you and whoever else is interested in this issue to go through the issues and factors and give you a briefing on the matters. I am very happy to organise that for you.