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According to the ICA, the proposed fund would be distributed over ten years, involving contributions from federal, New South Wales, Queensland, and Victorian governments—regions identified as having the most significant number of flood-exposed properties. The fund would finance new flood defence infrastructure, fortification of vulnerable properties, property buybacks, and enhancements to existing mitigation systems. Additionally, the ICA is calling for the appointment of a designated flood defence minister to oversee these efforts.
More than half of 1.36 million properties at flood risk currently do not comply with contemporary resilience and building standards. ICA argues that tackling high insurance premiums requires not only long-term mitigation plans but also immediate actions, such as abolishing state insurance taxes and implementing regulatory reforms.
ICA CEO Andrew Hall emphasized the urgent need for collaboration between insurers and governments to alleviate cost pressures on insurance premiums, especially during the ongoing cost-of-living crisis. He warned that consumers cannot afford to wait for mitigation measures to take effect, suggesting that significant governmental investment is essential for reducing extreme weather risks.
While the ICA's blueprint excludes flood pools and subsidies, conversations are ongoing with policymakers. Hall stressed that any market intervention must be time-limited and linked with mitigation efforts to avoid unwarranted long-term expenses for taxpayers and consumers. Historical lessons from global practices suggest that Australia must find its own working solutions.
Interestingly, political cooperation appears tepid, with Opposition Leader Peter Dutton advocating for insurance companies to bear the responsibility for the crisis. The ICA, however, highlights the complexity of the issue and the necessity of laying all facts on the table to work collaboratively with both government and opposition.
Previous efforts, such as NSW's 2023 pledge to reform the emergency services levy and the federal initiative against building on floodplains, remain unfulfilled, adding to political frustration. Hall underscored the need for persistent advocacy to break the cycle of response and neglect, aiming for a sustainable resolution to Australia's recurring flood challenges.
Published:Wednesday, 26th Feb 2025
Source: Paige Estritori
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