Minister for Financial Services & Superannuation
14 September 2010 - 1 July 2013
Interview with Stephanie Corsetti
ABC Central Victoria
16 May 2012
SUBJECTS: Flood definition
Tell us how much closer is the Government coming up with a commonsense definition of floods?
The Labor Gillard Government has done more in 12 months about reforming flood insurance than has happened since 1975 and Cyclone Tracey. There's been a problem around for 40, 50 years and beyond, where different insurance companies would have different definitions of flood, which would mean that people who get flooded, have home and contents insurance, and sometimes find that there could be neighbours in the same street, and yet one house gets insurance pay-outs, and the other one doesn't, even though both houses have flooded.
And so you've acknowledged this problem and identified it, and when will the definition be officially declared?
Sure. Well, let's just go through what we've done. We committed to rebuilding Queensland and Victoria in the wake of the 2011 disasters, and the Conservatives opposed the flood levy, which is now finished, but we did provide literally billions of dollars, not only from this, but from consolidated revenue, to assist people get back on their feet, and industry and towns.
What we've also done is pass the Insurance Contracts Amendment Act, it's a legislative framework, we've developed a standard definition of flood, for riverine flooding and insurance contracts of home building and home contents, small business - and small business, and also a single page key fact sheet, we've dealt with the inconsistent definitions, the final wording will be made in regulation to be released over coming weeks.
The standard definition of floods has been around since Cyclone Tracey, the Australian Competition Consumer Commission tried to deal with it and couldn't, no-one has ever been able to get the insurance industry to agree on a common 25-word definition of what a flood is, we've done that, we've put it out for consultation, tested all the unintended consequences, we've passed a law, we make the regulations.
For me the issue isn't should it have been done last month, for me the issue is, why wasn't it done 40 years ago?
And so when will this legislation come into effect?
Oh, the legislation's in effect, the legislation says you've got to have regulations which are put out, consulted, I'll get them up from Treasury within the next two, three weeks, I believe.
And so it's looking like it'll all be in time for the next Spring wet season?
And I mean this definition, it's going to make the insurance process more - less stressful and, you know, clearer for flood victims.
Yes, there's nothing - you can't take the stress out of flooding, that's for sure, but we can take the stress out of arguing about are you covered for flood insurance?
This whole review, you know, you had the consultation end in March, and talking about the web portal and so forth, and...
Yes, this is another idea, we've - the fundings for this financial year, what we want to do is create a national library of flood data, we've committed $12 million over four years for a national flood risk data portal, in plain English, councils, Water Boards, industry experts, State Governments, have all got pieces of the puzzle about flood mapping history, but it's not in one place at one time, so we've agreed to put it to a department called GeoSciences Australia, we've allocated the money.
Yet again, anyone could have done this in the last 40 years, but no-one has, until we've done it.