News

19 August 2024

Thank you Mr Speaker, I move the motion relating to climate change and insurance, and the terms in which it appears on the Notice Paper. Mr Speaker, climate risks are a problem we are facing now. It is impacting the safety of our communities, costing ordinary Australians, and fuelling inflation. Severe weather events are already costing the Australian economy over $38 billion a year. Which is predicted to rise to at least $73 billion per year by 2050, if climate change continues unmitigated. We are in the grip of heat-flation. In Australia we are facing increasingly extreme weather from bushfires to floods to cyclones. Damaging our homes, infrastructure and communities. Impact from extreme weather is driving insurance costs through the roof, and that is fast outpacing inflation, and then in term fuelling the cost-of-living crisis. 

In Warringah, local Facebook groupchats are alive with people realising that insurance premiums are up a median of 28 per cent across the board. Putting downward pressure on insurances can be achieved by investing in adaptations, but we don't hear much of that from either the Government or certainly not the Opposition. We know that for every $1 invested in adaptation and resilience building, we get a return of $11. Yet historically, there has been a 97 per cent allocation of funds to disaster recovery rather than prevention. Because we know that if you underreport and underacknowledge the risks and the impact that is coming, you don't have to deal with the cause. For too long that has been the case. I am calling on the Government to reverse this, to plan ahead, to act now, to prioritise adaptation and resilience building and make sure we are keeping our communities safe.

Insurance has risen across the board for all Australians, but is astronomical for those in disaster zones and high-risk areas. When I went door-knocking on flood-impacted pockets just in my community in Warringah, I found some constituents' insurance had jumped into double-figure marks or had been completely denied. These people fall into the 12 per cent of Australians who are facing insurance stress as their home insurance is as much as two months salary, and simply unaffordable or unavailable. Across Australia those areas are at the highest risk of under-insurance, are often and too often low socio-economic areas. Those that can least afford it. 

Today the Insurance Council of Australia released its annual catastrophes report. With the last year's of extreme weather events collectively leading to almost 157,000 claims and $2.2 billion in insured losses and highlighting the risk of underinsurance. Over the past five years, Australia has reached an average of $4.5 billion a year in losses, with floods the main driver of this increase. So, we urgently need to reduce warming to mitigate emissions – you cannot acknowledge the scale of this problem and then do nothing for years on end. But we also must now protect communities by being clear about the scale and the challenges that they face, and especially also small businesses, with accelerating climate risk. 

In my electorate of Warringah, there are flood-impacted zones where some of my constituents have invested to make their homes more resilient, but this is not to be recognised by insurers, only to face extortionate insurance costs, leading to underinsurance or no insurance being available. Meanwhile, we have the Resilient Building Council joining the dots, using its resilience rating tool to provide insurers who have committed to the scheme, such as IAG and Suncorp, the confidence and certification needed to in turn reduce insurance costs. Programs like this and the inclusion of adaptation into the sustainable finance taxonomy, must be funded to help families make their homes resilient and unlock private capital. 

Likewise, we need to ensure that the millions of new homes being built are built to withstand the new world they will be existing in. Communities need to be safe, they must be climate and heat in particular, resilient. From changes to the National Construction Code to include adaptation, a minimum resilience standards for public housing, to accelerating national state and territory coordination to ensure that no house is built in a high-risk disaster zone. 

Tomorrow I will hold a roundtable discussion with stakeholders including economists like Guy Debelle, around what is needed to manage climate risks and the escalating cost. I call on the Government to do more in this space.