MP’S CALL: ‘Give them a bloody nose’
A HUGE weight of responsibility sits on the shoulders of the federal government, which holds the most power to enact strategies to fix North Queensland's broken insurance market.
It commissioned the Australian Competition and Consumer Commission to undertake a three-year investigation to help address concerns about insurance affordability and availability in northern Australia and consider how to promote more informed and competitive insurance markets.
Since the start of the year, the ACCC's detailed final report suggesting a range of measures to fix our insurance woes has sat with the state and federal governments, with the ball in their court on charting a fairer course forward.
A vocal advocate for a fairer insurance arrangement for North Queenslanders, Herbert MP Phillip Thompson said he would prioritise a meeting with Assistant Treasurer Michael Sukkar when he returned to Canberra to push for timely action addressing the North's insurance "market failure".
Mr Thompson regarded insurance as an essential service, much like electricity and water, necessary for both residents and business owners.
"We've seen market failure for five to 10 years, it's been going on for a very long time," Mr Thompson said.
"I believe that it has been a failure of consecutive governments. All levels of government have let down the people of North Queensland by not tackling this very serious issue a lot earlier."
Mr Thompson said fixing insurance required a co-operative whole-of-government approach, not finger pointing.
"Whether it's council doing flood mitigation or cyclone resilience, whether it's state abolishing stamp duty like they're doing in NSW, or the federal government, where in my opinion having a reinsurance pool creates less risk for insurers to do business in the North," he said.
His stance backing a national reinsurance pool was in line with the first recommendation put forward recently by the Townsville Chamber of Commerce to fix the insurance system.
The chamber's second recommendation calling for national competition for the insurance industry also was supported by Mr Thompson.
"We've seen through the ACCC report that insurance is a profitable business to be in, but what we can't do is allow these companies that cherry pick where they'll do business which hurts in places like north Queensland," he said.
"If they want to do business in Australia, then they must insure everywhere.
"It's my view that the government needs to have a heavy hand (with insurers) and if that means giving a few of them a bloody nose to make sure they fall in line and do what their job is, to provide insurance at a reasonable cost for the people of north Queensland, then I think that's what we need to do."
The Herbert MP said it might yet be necessary for the government to establish a national insurer, but he suspected this sort of intervention would be a last resort.
Mr Sukkar said the ACCC's report made 38 recommendations for the commonwealth, states and territories, and industry to consider.
"The federal government will take time to further consider these recommendations and its response," Mr Sukkar said.
"During the period the ACCC was considering this matter, the Royal Commission into National Natural Disaster Arrangements also handed down its findings.
"In response to the royal commission, the government has committed to establishing a new national resilience, relief and recovery agency by July 1 to help Australia better prepare for natural disasters and drive long-term resilience policy outcomes."
He said it was a long-held position of the government that relieving pricing pressure for policy holders in northern Australia required shared action from all levels of government and industry.
"The government encourages state and territory governments to act on the ACCC's recommendation to remove or reform stamp duties on insurance products," he said. "By a stroke of a pen, this one simple action could immediately cut the cost of an insurance policy.
"Importantly, the federal government has already undertaken steps to assist residents of northern Queensland by investing $10m for phase two of the successful Household Resilience Program in Queensland to protect Australian communities, support local jobs, and put downward pressure on insurance premiums."
Additional funding was also provided in the 2020-21 Mid-Year Economic and Fiscal Outlook to continue administering the Northern Australia Insurance Comparison website, helping residents compare home insurance policies.
Mr Sukkar said the government was extending unfair contract term protections to insurance contracts as part of the response to the financial services royal commission.
Originally published as MP'S CALL: 'Give them a bloody nose'