FEDERAL MP Warren Entsch has called on his state government counterparts to “step up” and support changes that would help make property insurance in the Far North more affordable.
Mr Entsch was responding to reports that the Queensland Government would increase the stamp duty payable on general insurance products, including property insurance, by 1.5 per cent.
“A 1.5 per cent increase might not sound like much, but it’s all proportional,” Mr Entsch explained. “When a home insurance policy was costing $500 a year, it’s fine, but when that policy is now up to $5000 a year, it makes a difference. This is definitely a retrograde step.”
Mr Entsch emphasised that while stamp duty was part of the problem with insurance affordability and needed to be addressed, overall it was a relatively small part of it.
“Unfortunately there’s no ‘silver bullet’ solution here,” he said. “The issues that need to be dealt with are not just a federal government responsibility it needs a whole of government approach.
“It’s time to get the state MPs engaged in this process and I’d also encourage people in our region to start enquiries with their local member.”
A key change that could be addressed through State Government legislation was the current requirement that properties be insured for full replacement, rather than market, value.
At a meeting with other Coalition Policy Development Committee members in Canberra two weeks ago, Mr Entsch recommended that the federal MPs to sit down with their state counterparts to see how they can contribute, “otherwise affordable insurance will continue to be a pipe dream”.
Mr Entsch also pointed out the hypocrisy of the Insurance Council of Australia, which has been very critical of the state government’s stamp duty increase.
“The ICA has stated that;
‘You cannot improve insurance affordability by increasing insurance costs. Underinsurance and non-insurance are not desirable’.
“I agree with them absolutely – but they need to take a good hard look at their own members. It’s the insurance companies themselves who are refusing to insure based on postcode or property age, or quoting such ridiculous premiums that people can’t afford to pay them.
“Clearly they have sat back and allowed market failure to occur in FNQ. People can’t insure for those sorts of figures and so when disaster does strike, they look for support from government at all levels.”