Insurance Reform banner image

Insurance Reform

Insurance Reform

The need to address the disproportionately high cost of insurance in northern Australia for households, businesses, sports, events and the arts.

Content accurate as of July 2020.

Townsville, North Queensland has suffered a prolonged period of high unemployment. The region's prolonged poor economic conditions are exacerbated by high business and household costs. This is no more evident than in the cost of insurance.

As at the December Quarter 2019, the Townsville SA4 recorded an unemployment rate of eight percent, almost two percentage points higher than that recorded for Queensland and three percentage points higher than Australia.

For Townsville, North Queensland, the average home and content premium, excluding GST and State levied stamp duties, is double the average reported for the rest of Australia. As a result, Townsville residents and businesses pay, on average, double the taxation on insurance premiums.

The cost of home and contents insurance in 2019 in Northern Australia was $5500 compared to the average cost for the rest of Australia at $1400. This also showed non-insurance is 20% for northern Australia versus 11% for rest of Australia.

Residual income is now far scarcer for many families and affording the luxuries of having their kids play multiple sports and having to pay for multiple sports registrations will not be possible. Registration fees for sports can be very high as each sport has its own insurance component to be paid as part of the fees.

This is a major depressant on our economy, reducing discretionary expenditure vital to local business. It is an inequitable fiscal burden levied by governments meant to provide a fair go by ensuring all pay their fair share.

2nd Interim Report
Current Policy

Three years ago, in May 2017, the Australian Government directed the ACCC to conduct a wide-ranging inquiry into the supply of insurance in northern Australia. This Inquiry handed down its 2nd Interim Report in December 2019. The inquiry is ongoing. The 2nd Interim Report makes 28 recommendations designed to address the impact of stamp duties, make it easier to search for and compare insurance products, improve consumers’ rights, deal with conflicts of interest, reduce the potential for underinsurance, and reduce risks for current and future property owners.

Proposed Policy

Expand the recommendations to business and advancement of the implementation of all 28 recommendations.

In particular, the Taskforce seeks the immediate implementation of taxation reform through the immediate abolition of stamp duty on insurance products and the rebasing of GST to reflect the sum insured rather than the premium paid.

Responsibility
  • Australian Government
Sports Insurance
Current Policy

Insurance for children playing sport is currently covered by each individual sport, meaning parents are paying for insurance multiple times.

Proposed Policy

Introduce sports insurance (like health insurance) for an individual so that parents can insure the child for all sports once, rather than code by code.

Responsibility
  • Australian Government
  • Queensland Government
Public Liability Insurance
Current Policy

High cost of public liability insurance.

Proposed Policy

Undertake a review of public liability insurance to reduce cost.

Responsibility
  • Australian Government

Boost local economic activity through increased discretionary spending resulting from reduced business and household costs.

Policy

Policies that lower costs will go towards assisting the sectors and households to recover, including:

  • Taxation/revenue
  • Energy
  • Jobs and industrial relations.