FEDERAL Member for Leichhardt Warren Entsch has described himself as “bitterly disappointed” at the government’s failure to address virtually any of the issues surrounding strata title insurance.
The government today (Thursday) tabled in parliament its response to the nine recommendations from the House of Representatives’ Standing Committee on Social Policy and Legal Affairs.
Despite hearing harrowing stories of financial hardship and stress during the inquiry process in January, Mr Entsch said the government had insulted North Queenslanders in its response.
Out of the nine recommendations – that were intended to address the affordability of strata title insurance and the lack of competition in the market the government has backed only two.
“Supporting the recommendation that the government liaise with the Queensland government and urge them to implement a 12 month moratorium on stamp duty is simply shifting the problem and will do absolutely nothing for affordability or availability,” Mr Entsch said.
“What is the point of a moratorium when people can’t afford to pay their insurance bill because it’s gone up 1000 per cent, or even worse, can’t even get insurance in the first place?”
On the second recommendation, that a review take place of the insurance companies’ risk assessment methodologies, the government did not agree that the Australian Prudential Regulatory Authority was the correct body to carry out the review but has commissioned the Australian Government Actuary instead.
Queensland Labor Senator Jan McLucas outlined the government’s response in a media release but Mr Entsch said her comments showed she was “totally out of touch with the situation”.
“The problems go way beyond strata title insurance now, it has extended across the whole spectrum of insurance residential, rural residential, bed and breakfasts, landlord and more,” he said.
“You would think, reading this document, that the government is in cahoots with the insurance companies.
“In my view there is clear evidence of gouging and market failure. Insurance companies are using a couple of recent moderate events in North Queensland as an excuse to exit the market and jack up prices to unaffordable levels.
“They are clearly looking at opportunities to maximise their profits through selectively offering insurance in high yield, low risk areas while excluding others based exclusively on postcodes.”
As a result, Mr Entsch said he now would not wait until the October 1 deadline for the outcome of the reviews.
“Based on the total lack of response from this government I will now be moving towards preparing a Private Member’s Bill aimed at highlighting the greed and total lack of commitment by insurance companies to Northern Australia and investigating ways in which affordable insurance can be restored,” he said.
“As a community we need to hold both the Federal Government and the insurance companies to account. It’s time to play hard ball.”