Nova Peris (NT, Australian Labor Party) Share this | Hansard source

I rise in this adjournment debate to oppose the sale of the Territory Insurance Office by the Country Liberal Party government in the Northern Territory. On Monday the CLP government announced that they were selling the insurance arm of the TIO to Allianz Insurance, a German company, and the banking arm to People's Choice Credit Union. There are two aspects to my opposition to the sale. Firstly, it should not be sold; and, secondly, the deal they have done to sell it is a complete dud.

The CLP had no mandate to sell TIO. In fact, they had a mandate not to sell it. Before the election in August 2012, CLP leader at the time said, 'The CLP stands firmly opposed to the sale of TIO and will fight to see it retained.' But after the election, they sold it. And they sold it against the clear will of the people of the Northern Territory.

The Territory Insurance Office is the only insurance company in the Northern Territory that provides loophole-free flood, cyclone and storm surge insurance. Of course, in the Northern Territory the provision of such insurance is vital. Territorians know this and they know that this sort of insurance will no longer be provided at an affordable price. That is why they oppose the sale. If the CLP wanted to sell the TIO, they should have taken their plans to the election. Instead they arrogantly rushed through a sale behind closed doors without any consultation with Territorians.

Another reason that the TIO should not have been sold is that it makes a profit. Over the last five years the TIO made a profit of $305 million. This is a short-sighted sale. The CLP are selling the TIO to grab some quick cash to pay for their unfunded 2012 election promises. It is unequivocal that Territorians do not want it sold. Normally we Territorians are pretty laid back people, but this sale has seen people take to the streets like no other issue. Local polls recently showed up to 90 per cent opposition to the sale.

I am sure that to people down south it will seem strange that Territorians have a deep affection for an insurance company. But these things are important when you live in cyclone country. We do not want the insurance crisis that hit Queensland where, in Weipa, people pay $10,000 to insure their homes compared with $2,000 in Brisbane. But that is what can now happen. The CLP have admitted that insurance premiums will rise—and this is from a government that promised to cut the cost of living. But they put power prices up by 30 per cent and now insurance premiums. In fact, the cost of living in the Territory is forecast to keep growing at the highest rate in the country for the next five years. Selling the TIO means premiums will go up and less protection will be provided.

Here in Canberra we have witnessed government MPs accuse their own Prime Minister of verbal gymnastics over his claims that he has kept his promise that there would be no cuts to the ABC or SBS. It would seem that Northern Territory Chief Minister Adam Giles likes the way his mate Mr Abbott denies the truth. How is this for a quote: 'We are not selling TIO. We are just transferring ownership.' That is actually what the chief minister said in response to suggestions he should not sell it. As Michael Gunner, a Territory Labor MP said yesterday, 'Adam Giles isn't going to the Christmas sales this year; he's going to the Christmas transfers of ownership.' And this is from a chief minister who said he wanted to have a mature conversation about selling the TIO. It is verbal gymnastics at its finest, but it does not work. It does not cut it with Territorians. In much the same way that Australians do not believe Mr Abbott, Territorians do not believe Adam Giles.

Another reason the TIO should not be sold is that it goes against the recommendations of the inquiry into developing the North. Here is a recommendation:

The Committee recommends that the Australian Government take measures to reduce insurance premiums back to an affordable level, which could include increasing competition in the insurance market in Northern Australia. The Australian Government has particular responsibility for the Indian Ocean Territories, but should also conduct negotiations with the governments of the Northern Territory, Western Australia and Queensland, with a view to allowing the Territory Insurance Office to extend its coverage across Northern Australia including the Torres Strait Islands.

The report further noted:

The Territory Insurance Office (TIO) in the Northern Territory is a government owned statutory insurance provider that has provided affordable insurance to citizens of the Territory since 1979. It provides a potential model for the creation of an insurance office covering Northern Australia.

The CLP government claim that they want to develop the North, but they are directly going against the recommendations of the report. TIO premiums will go up everywhere but insurance industry experts have said this will hurt insurance in the bush the most—especially in areas prone to flooding and cyclones. In selling the TIO, the insurance equalisation policy has been abandoned, so the risk will no longer be spread. Territorians who live in flood areas will have to pay huge premiums.

The CLP and the Abbott government keep saying they want to increase home ownership in the bush, but huge insurance premiums are going to be a barrier to achieving this. It will also hurt businesses in the bush who already face high costs, including $3 a litre for petrol, which makes it very hard to compete. Now we are going to see insurance premiums add to the enormous costs.

Those are the reasons the TIO should not be sold. I will now outline why the actual sale is such a dud. The CLP originally claimed that they would get well over half a billion dollars for the TIO. But they have sold it for $424 million. The sale of the insurance and the banking gets only $284 million. The balance is just a motor vehicle accidents compensation scheme write-down which the government admits it already has in its coffers. So we have sold a company that has made a profit of $305 million over the last five years for a return of only $284 million.

In justifying the sale of the TIO, the chief minister continually pointed out that the Commonwealth would kick in 15 per cent of the value of the sale for infrastructure in the Northern Territory under the asset recycling scheme. But they haven't. The deal announced does not involve money from the Commonwealth. The asset recycling scheme does not exist in this deal. His justification for selling it simply does not exist. In fact, the Abbott government has refused to back the sale of TIO. They have ignored Adam Giles and they are not giving him any money, but he has gone ahead and sold it anyway. Giles claims that the sale of TIO will help build the north. He said:

We want to create an infrastructure nest-egg which is invested and grows over time, ensuring TIO’s legacy is felt by Territorians long into the future.

And he said:

Through its possible sale, TIO could serve all Territorians in a new way, by providing us with the funds to unlock our potential, creating the jobs and industries of the future

But all we have for infrastructure is $265 million. In promoting the sale Adam Giles referred to projects like a bridge to Mandorah and sealing the Tanami. These projects would cost billions, yet all we have is $265 million. Under Labor the NT had an infrastructure budget of up to $1.8 billion, and Adam Giles complained it was not enough. Now he says $265 million will build our future. The fact is that he is just going to use it to pork-barrel in the lead up to the next election. He has sold TIO for a pathetic amount. It is small change, and Territorians have been short-changed. We will never, ever get it back.

The Territory opposition has vowed that they will look working with the federal government to deliver its recommended public insurance model across Northern Australia. They will look at setting up government backed insurance scheme across Northern Australia. I will support this. If we are going to develop the north, we need insurance to be affordable. I will work with the Labor opposition to develop this plan because it is what Territorians want and what we need to develop the north.

The silence from the Northern Territory members of this parliament on the sale of TIO has been deafening. Natasha Griggs, the member for Solomon, and Senator Nigel Scullion of course cannot criticise Adam Giles for breaking election promises, as they are too busy breaking their own promises. And they cannot criticise him for increasing the cost of living, especially after they voted to increase the price of fuel in the NT and they want a new GP tax. It is sad that they have decided to back the CLP rather than Territorians on this issue.

I condemn the sale of TIO and I condemn the dud deal that has betrayed all Territorians.