Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate—

(a)

notes that:

(i)

while Victoria, New South Wales, South Australia, Western Australia and the Australian Capital Territory all insure public assets with a comprehensive disaster cover obtained on the international re-insurance market, Queensland, the Northern Territory and Tasmania do not,

(ii)

the recent comments by the Prime Minister (Ms Gillard) that Queensland’s lack of insurance cover for its public assets was a ‘matter for Queensland’, are obviously incorrect, given that the flood levy will be borne by the majority of taxpayers, and

(iii)

the extent to which the Commonwealth reimburses the states and territories for expenditure related to natural disaster relief and recovery, as set out by the Natural Disaster Relief and Recovery Arrangements, does not take into consideration whether a state or territory has taken out insurance cover; and

(b)

calls on the Government to:

(i)

reveal the Commonwealth Government’s insurance arrangements for its infrastructure,

(ii)

transparently estimate what the cost to the Commonwealth Government would have been had the Queensland Government purchased reinsurance to cover the cost of damage to public infrastructure caused by recent natural disasters,

(iii)

table all communication between the Commonwealth and the Queensland, Northern Territory and Tasmanian Governments relating to their lack of natural disaster reinsurance for public infrastructure, since the 2007 election, and

(iv)

consider how future Natural Disaster Relief and Recovery Arrangements can take into consideration the extent to which the state and territory governments are insured against damage to public infrastructure caused by natural disasters.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

I seek leave to make a brief statement.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Leave is granted for two minutes.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

Thank you. The government is opposing the motion. There has been a great deal of misinformation in relation to the insurance position adopted by the Queensland government. It is not true to suggest that if Queensland had taken out reinsurance the Commonwealth would have been able to avoid any payments under the NDRRA. The scale of this disaster was significantly larger than any state insurance policy could cover. It is misleading to suggest, as we have heard time and time again from some people in the media, that Victoria, New South Wales, South Australia, Western Australia and the ACT all have comprehensive disaster coverage. This is wrong. The states take out a range of positions when it comes to reinsurance. Victoria insures both roads and bridges. New South Wales insures bridges but not all roads. Queensland and WA insure neither bridges nor roads. So the motion is based on factual errors.

These different positions reflect the fact that the premiums faced by each state will tend to vary based on the nature of the assets being covered and the risks being faced. Currently, each state looks at whether to take out reinsurance based on whether it represents value for money. Queensland assessed reinsurance and found it was better for the taxpayers of Queensland for the government to build up a pool of funds rather than pay reinsurance premiums. The Commonwealth, when it reviewed its insurance arrangements under the previous government, decided to self-insure through Comcover. So, clearly, reinsurance does not always represent value for money for taxpayers. This is a decision that each government needs to take on a case-by-case basis. We acknowledge that insurance is an area where reform is necessary. The government is working with the insurance industry and consumer groups on reforms in the interests of taxpayers and consumers. We will have more to say on this in coming days and weeks.

Question agreed to.