February 24, 2022




SUBJECTS: Federal government refuses to release proof of reinsurance pool savings; how much will average homeowners really save?; Labor’s Disaster Ready Fund. 

The insurance scheme, the reinsurance pool has passed through Parliament. But from the opinion of the Labor Party, there is more to tell on this story. There is more that needs to be done. And joining us this morning is Senator Murray Watt, Labor Senator for Queensland and the Shadow Minister for Northern Australia. Senator, thank you for your time today. What are your concerns with the legislation that's now passed?

MURRAY WATT, LABOR SENATOR FOR QUEENSLAND: Good to talk to you, Michael. And I want to be really clear that Labor does support the reinsurance pool and we did vote for that legislation last week and we certainly intend to support it in the Senate. The issue we've got is that we're just not sure how the government is backing up its claims about the savings that people will make from this. Anyone in North Queensland knows how much insurance premiums have skyrocketed over the last 10 years or so. And nothing has been done about that. So I think that people are really holding out hope that reinsurance will make a big difference. And we've seen some very big claims from Phil Thompson and other members of the government about how much will be saved. But when I asked about this in Senate Estimates last week, what I was told was that no one in North Queensland was allowed to see the proof of these plans, about what savings people will be making. The government says that it has modelling, which backs up the claims it's making about the savings that people will generate. I asked the Minister and the Treasury Department people to table that modelling so that everyone can have a look at it. And what I was told was it wasn't “in the public interest” to release the proof that the government has, that it says backs up its claims. I just don't think that's a fair way to treat people in North Queensland and if the government is going to get out there and make big claims about what people are going to save - and let's face it, they're doing this so that they can keep people happy in the run up to an election - the least they can do is actually release the proof that they say they have.

CLARKE: So if you didn't know what amount of savings we would get here in North Queensland with this pool. Why did you support it?

WATT: Well, we do believe that the reinsurance pool does offer the prospect of bringing down insurance premiums in North Queensland and we're happy to do anything that will do something about those premiums. We've been calling on this government to do something about insurance premiums for the 10 years that they've been in office, so we're happy to give it a go. But I think it's important that governments are honest with people and if they're going to be trying to win elections on the back of claims they're making about how much people will save, they should at least just release the proof that they say they have. I think there's a really simple question for Phil Thompson next time you or anyone else is speaking to him, which is, how much will the average homeowner in Townsville or North Queensland save? The figures that the government has put out so far, when you dig into the fine print, what they say is that it will be people with the most acute risk, who will make these savings. Now what does that mean? How many people are we talking about, are we talking about five people who live on the beach front on a hill, that they'll make these savings and then there'll be nothing in it for anyone else? That's what we need to know and Phil Thompson, I think, owes it to people in Townsville to be honest with them.

CLARKE: If we see after the election, which is coming up certainly by May, if there is a change in the government, what guarantees can you make about releasing that type of information and giving very rock solid guarantee about how much people will save on a reinsurance scheme, a reinsurance pool that you have?

WATT: Well, unfortunately, I can't give anyone any guarantees about what the reinsurance pool will save, because I haven't seen the modelling. I don't know whether Phil Thompson has even seen it. I don't know whether his own government has shared this modelling with him and the other MPs. So that's why we need to see it, so that all of us understand what the situation is. 

CLARKE: Would you go and do your own modelling?

WATT: Well, I think the starting point, we want to release the modelling that this government has already paid for. They engaged external consultants to do this. Presumably that cost tens of thousands of dollars. And I think as a starting point, that's the modelling that should be released so that we all understand what's happening.

CLARKE: If you were to look at those figures, and they weren't, too impressive. What would that mean for the future of that type of legislation under a Labor government?

WATT: Well, as I say, we do support the concept of a reinsurance pool, and that's why we'll be voting for it in the Parliament and that would stay in place if Labor were to win the next election. The things that we would do, though, would be to do more than just rely on the reinsurance pool. And when Albo was in Queensland in January, he made a big announcement about a significant increase in investment from the Federal Government for disaster mitigation. If you talk to insurers or experts in the field, what they'll tell you is that the best thing the Federal Government can be doing to bring down insurance premiums is to invest in flood levees, in cyclone shelters, in strengthening people's homes and roofs to reduce the risk of damage when we see cyclones and floods come through North Queensland. What we've seen is that we invest up to $200 million a year in that kind of disaster mitigation to reduce the risk for homeowners, apartments and business owners. So that's separate to the insurance pool and we think that combined, we make a really big difference. And we're now calling on the government to match our investment so that we can see that kind of investment across North Queensland. 

CLARKE: One of the many issues of importance to us in the lead up to this election. Senator Murray Watt, we do appreciate your time this morning.

WATT: No worries Michael, good to talk.