Raff Ciccone (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

CICCONE (—) (): I present the Joint Select Committee on Northern Australia's First report on the cyclone reinsurance pool, together with accompanying documents.

Susan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

I move:

That the Senate take note of the report.

I rise to take note of the Joint Select Committee on Northern Australia's First report on the cyclone reinsurance pool. This is a terrifically important body of work that the committee has undertaken, inquiring into the ongoing work of the cyclone reinsurance pool.

It's important in the first instance that there be a Joint Select Committee on Northern Australia, and it was devastating to see that one of the first acts of this incoming government was to abolish the Joint Standing Committee on Northern Australia—a committee that has done a huge power of work on inquiries into the under- and non-insurance in Northern Australia and the activities in Juukan Gorge, amongst other planning and bodies of work for Northern Australia. I was very pleased to lead the charge to have that joint select committee re-established. That committee is made up of the chair, Marion Scrymgour, from Lingiari in the Northern Territory; and the deputy chair, Warren Entsch, from Leichhardt—both terrific northern Australians. We also have a range of other great committee members including you, Senator Allman-Payne.

This inquiry is important. I want to acknowledge the important work that Warren Entsch from the seat of Leichhardt, Phil Thompson from Herbert and Andrew Willcox from Dawson have done in continuing to advocate for the need for there to be an intervention in the market. We know that in northern Australia either people were not able to acquire insurance or, if they were, they were underinsuring their properties in order to afford the premiums.

We know that this is true because the ACCC did a full inquiry into the insurance impacts. The final report of the ACCC was tabled on 28 December 2020, and that identified the serious impacts that this underinsurance and lack of availability of insurance was having not just on businesses—of course, if you don't have insurance, you can't get finance; businesses were incredibly adversely affected—but also on families and individuals right across northern Australia. The one that continues to break my heart is people who had retired and bought a unit on the Strand in Townsville or the lagoon in Cairns—somewhere where they intended to see out the rest of their retirement years. What has happened is that the escalating cost of insurance and the state government's inflexible position on how they have to meet premium payments—how the body corporate has to find insurance—was driving these people out of their homes. It has driven people away from homeownership in North Queensland. It is a very serious issue.

What was important about this inquiry is that this was the first examination of what had happened since the intervention of the coalition government in the $10 billion cyclone reinsurance pool. This was a terrific policy announcement, but it is incredibly important that we continue to hold the insurers to account to so that the work of the government—the reinsurance pool—and the interaction with the insurers mean that northern Australia is getting the outcome the government intended with the introduction of that pool.

We did hear a range of different pieces of evidence around the problems there still are for marine insurance and the challenges of getting flood insurance, as well as the challenges for people like the Townsville racing club. It has a capital rate that is higher than the $5 million that is set by the reinsurance pool. These are all things we heard about.

At this point, only two insurers have signed up to the reinsurance pool. This is in line with the expectation that there would be another six insurers signing up over the next six months and then an additional four by the end of this year, which should bring the majority of insurers into the reinsurance pool by the end of this calendar year, 2023. That will allow us—the committee, that is—to hold another hearing sometime in the early part of next year to continue assessing these impacts on insurance premiums and access to insurance.

It was always the intention that what this policy intervention would do would be to provide parity of access to insurance through cost and offerings that should be expected right across Australia. That's the outcome that we're searching for. I have to tell you that, having seen a number of councils from South-West Queensland just this week, we know that the challenge of insurance is now creeping right across Australia. There are regions that are not being offered flood insurance despite having a significant levee bank in towns like Charleville and Goondiwindi. So I can see that there is going to be a requirement for further inquiries into what is happening, what products are being offered to insurance companies and how we're going to address that going forward.

I commend the work in this report. I want to thank the chair, Marion Scrymgour, and the deputy chair, Warren Entsch, and the remainder of the members, as I have already mentioned: Senator Allman-Payne; Senator Dean Smith; of course, Mr Luke Gosling, also from the Northern Territory; Shayne Neumann, from Blair in Queensland; Andrew Willcox, the member for Dawson; Senator Patrick Dodson, from Western Australia; and Senator Nita Green, from Queensland. It has been a very collegiate committee on this very important topic, and I want to thank all of the members of the committee for the work they have done and the interest they continue to show, and I look forward to ongoing work in this regard. Thank you. I seek leave to continue my remarks later.

Leave granted; debate adjourned.