A new Federal Government report has revived calls to establish a government-backed insurance agency for northern Australia.
The Joint Select Committee on Northern Australia Pivot North report has recommended the Federal Government intervene to “reduce insurance premiums back to an affordable level”.
A key method of achieving this, the report recommends, is allowing the Territory Insurance Office to provide government-backed insurance across the breadth of northern Australia.
“The Committee notes the extraordinary disparity in insurance costs between the north and south of Australia,” the report states.
“The risk factors applying in the north—chiefly cyclones—do not fully explain this disparity.”
The report praised recent efforts by insurers to address affordability of strata cover in North Queensland but recommended the Federal Government “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 chair of the committee is Federal Member for Leichhardt Warren Entsch, who has previously contradicted the Government’s own research findings that the high price of property insurance in North Queensland are almost wholly due to the area’s risks, not price-gouging.
Earlier this year, Federal MP Bob Katter called for the Queensland Government to revive the State Government Insurance Office, abolished more than a quarter of a century ago.
Ongoing insurance affordability will likely be a topic of conversation later this month when the Productivity Commission meets a host of insurance industry leaders for a panel discussion of natural disaster funding in Australia.
The forum will follow the Commission’s preliminary report on the issue, due to be released imminently.