LAURA JAYES:
Joining me live now is the Assistant Treasurer, Michael Sukkar. Thanks so much for your time.
MINISTER SUKKAR:
Hi, Laura.
LAURA JAYES:
What we are seeing here is partly, extraordinary weather events, but a failure of mitigation as well?
MINISTER SUKKAR:
Look there’s no doubt, Laura, that the only way to build long-term resilience for lots of communities – whether it’s communities that face cyclone risk or as we see here, communities that face flooding risk – is mitigation and building that resilience. That’s the long-term answer, there’s no doubt about it. We are seeing, as you said, claims increasing exponentially so yes, it’s 60,000. 46,000 of those were Queensland, 14,000 for New South Wales. Obviously, we’ll see those claims for New South Wales – or for both, really – increasing quite exponentially. But the concern, as you say, in these instances is always people who either don’t have insurance or who are under-insured. Those people who don’t have some sort of critical aspect to their policy, for example, flood cover.
LAURA JAYES:
Do you have a read on how many people won’t have insurance because we hear that residents in areas around Lismore, it costs them $20,000 a year to insure their home? For some businesses, it’s $200,000 and these businesses don’t even make that much money?
MINISTER SUKKAR:
The data is obviously data that’s held by the insurance companies, and they have their best estimates. When the ACCC had a look at lack of insurance or under-insurance throughout the whole country, it sits at anywhere from 10 to 12 per cent and tends to be slightly more acute in areas that are either, as I said, cyclone or flood affected. I’d expect it would be more than that but ultimately those estimates, so to speak, are best determined by the insurance companies. Pleasingly we are seeing claims coming in very quickly. They’re already, to some extent, being dealt with in Queensland. There are assessors now on the ground in some parts of Queensland and obviously once flood waters subside in New South Wales, I’m certain that there will be assessors on the ground very quickly there. Floods are particularly difficult. The clean-up after a flood is, to some extent, like no other and a little more labour intensive than other natural disasters.
LAURA JAYES:
Well, let’s talk about mitigation. Why hasn’t the Government spent more money? You have it set aside – $5 billion – but only a fraction of that has been spent. Why?
MINISTER SUKKAR:
The National Disaster Resilience Agency is really a body that’s taking up this work now. I think it’s a really important thing that we’ve established that agency. It obviously has to work very closely with all levels of government – obviously local governments and state governments – who are ultimately the parties that determine planning and zoning and the communities in which these natural disasters occur. As you would appreciate, Laura, the minute you have tiers of government having to agree on projects and agree on mitigation strategies, but we’ve put in place significant programs both for cyclone risk and for flood risk. But these are big, long-term, infrastructure projects often. If you’re talking about a levy, talking about increased drainage. These are projects that ultimately, the Government is always ready to support but we have to always work closely with the state and local governments involved because after all they’re the ones who build and operate and ultimately approve the communities and the planning and zoning that falls within them.
LAURA JAYES:
I get that but it sounds like these tiers of government are just getting in the way of each other and in the meantime, nothing gets done and it’s the people who suffer. This should be an election issue, shouldn’t it?
MINISTER SUKKAR:
Well, Laura, what we have done in a slightly different context is seek to help turbocharge some of the solutions as you’ve said. We’ve setup the Northern Australia Reinsurance Pool which will commence on 1st July. Now admittedly that deals with cyclone risk in the north of Australia, but explicitly in its mandate, we have put in place a process whereby any excess funds, any profits, should be diverted into mitigation projects. It becomes an almost virtuous cycle of savings from the reinsurance pool get put into fortifying those communities even further.
LAURA JAYES:
Okay well you’re talking about cyclones. Doesn’t the remit need to be expanded then to flood affected areas?
MINISTER SUKKAR:
Well, I’m using that as an example, Laura to just, in a sense, demonstrate that the model you’ve spoken about is being used. The ACCC, when it conducted its review found that cyclone risk was causing the most problems followed by flood risk not far afterwards. I think given we’ve had such devastating floods two years in a row, that there’s no doubt that the funding that we are providing will need to find agreement with relevant state governments and local governments to get these projects happening. I agree with you.
LAURA JAYES:
What are you going to do to get more building material more quickly? We know that there’s been massive supply chain issues even before these floods hit. What is in your capacity to do there?
MINISTER SUKKAR:
Laura, at the moment the insurance companies are telling us that it’s not so much the materials, although you’re right, there are pressures there and there have been pressures there for a little while. But labour will be a concern. The construction industry, residential construction has already been extraordinarily busy around the country. There are some options we’re looking at as far as fast-tracking visas for some workers who will be able to come in and help meet the task. It’s going to be a really big not just clean-up task but, as you say, rebuilding task with very highly skilled individuals. We’re looking at how we can fast-track some of that in. Admittedly the insurers, having dealt with similar issues just 12 months ago, I think have done a lot of work in ensuring that they have access to the labour and that materials they need. I think, Laura, a second-round impact might be what impact it has on the broader market because this work will quite rightly be prioritised, and we’ll do everything we have to do in order to alleviate any stress or pressure that they have in meeting those requirements either with labour or with material.
LAURA JAYES:
All sounds very expensive. Michael Sukkar, thanks for your time. We’ll speak soon.
MINISTER SUKKAR:
Thanks so much, Laura.