Monday, May 27, 2024

Queensland councils call for national reinsurance pool

The peak body representing Queensland’s 77 councils is urging the Federal Government to establish a national reinsurance pool to help reduce the cost of insurance premiums in North Queensland and across northern Australia.

The Local Government Association of Queensland has called for this measure in its Federal Budget submission to the Commonwealth, in support of member councils like Townsville City Council and the Whitsunday Regional Council and their communities, who have been vocal for some time in calling for change.

It said a precedent already existed from when the former Howard Government established the terrorism reinsurance scheme and asked the Commonwealth to establish a similar arrangement for insurance in northern Australia.

LGAQ President and Sunshine Coast Council Mayor Mark Jamieson (pictured) said figures contained in the Australian Competition and Consumer Commission’s inquiry into insurance in Northern Australia, released in December, were stark.

“The ACCC found insurance premiums had risen by up to 178 per cent in Northern Australian over the last decade, compared to 52 per cent elsewhere,” Mayor Jamieson said.

“More than 62,000 properties in North Queensland are currently uninsured, with more than 95 per cent of those uninsured property owners citing cost as a reason, the ACCC found.

“This is just simply unacceptable in a state as highly vulnerable to natural disasters as Queensland.

“Our member councils want a reinsurance pool established to help reduce those costs so their communities are not unfairly burdened, and we support their call.

“We urge the Federal Government to work with the councils as leaders of their communities to ensure an effective scheme is implemented before the next disaster season.”

Townsville Mayor Jenny Hill said the Commonwealth Government could no longer continue to bury its head in the sand on the issue.

“The Commonwealth must act now and the establishment of a national reinsurance pool is just one of the actions it should take,” Cr Hill said.

“The ACCC took three years to complete its investigation into insurance in Northern Australia and over that time the situation has further deteriorated.

“Homeowners, renters, businesses, body corporates – the prohibitive cost and, in some cases, lack of availability of insurance, is seriously impacting communities.

“A reinsurance pool already exists through the Australian Reinsurance Pool Corporation, set up by the Howard Government in 2003 to address a previous instance of market failure.

“The insurance market in Northern Australia has clearly failed and it’s time for a national reinsurance pool to help reduce the cost of insurance premiums.”

Whitsunday Regional Council Mayor Andrew Willcox said it was frustrating that the recommendations in the recent ACCC report did not go far enough to protect his community against huge insurance premiums that are double the rest of Australia.

“It is not just homeowners who are struggling with high premiums, but also our tourism accommodation and marine operators face similar prohibitive expenses,” he said.

“Our tourism stakeholders are struggling to reduce their risk and keep premiums down because of Federal and State government policies.

“We are advocating for the Federal Government to underwrite cyclone insurance for North Queensland to bring our premiums in line with the rest of Australia.

“Everyone is happy to put their hands out for a share of our region’s huge mining royalties, food from our horticulture and meat from our graziers, so it is only fair we get some financial relief to protect our key industries from financial stress.

“It is really difficult for the people from the Whitsundays and north Queensland who are paying so much insurance so we are calling on the Commonwealth to help us develop the north.

“Don’t send our businesses and our residents to the wall with cost prohibitive insurance premiums, it’s just not fair.”

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