ANDREW GEE:
Thank you very much for coming out to Eugowra today, folks. We really do appreciate it.
I am here with Stephen Jones, who is the Assistant Treasurer and Minister for Financial Services, and he has responsibility for the insurance industry. And we're delighted to be at the home of Lesley and Brian Smith who are Eugowra residents and, well, you can see for yourselves. They had their home destroyed in the recent storm and flood disaster.
Today we are here to announce that there will be a Parliamentary inquiry into the response of insurers to the 2022 storm and flood events that devastated the Central West, but also other communities around Australia. I am delighted that both the Minister and also the Prime Minister have listened to the stories and the cries for help from our region through many different avenues, including the public meetings which we've been holding into the insurance ‑ I would call it a fiasco ‑ in this area.
I asked the Prime Minister about this issue in question time, whether he would hold an inquiry. He said that he would talk to the Assistant Treasurer and consider that issue, and he has been true to his word. He's done that, and the result is that an inquiry will now be launched, which is I think vitally important.
We've been with the Minister today in Molong where we've been meeting with local residents and business owners and just giving the Minister insight into the devastation that has occurred there, but also the heartache that has been visited upon our residents through lack of action by insurers. And we're talking about delays in processing claims, widespread knockbacks, and just some of the ridiculous scenarios that they are putting to our business owners. For example, they are saying to some business owners that they'll only pay, for example, enough for rectification work for 20 centimetres above the floor line and they'll pay for the stripping out of gyprock and the reinstallation of gyprock up to 20 centimetres. That's how ridiculous some of these claims processing issues are.
And through the public meetings that we've held, we've heard stories of great heartache and tragedy that is being compounded and made worse by the behaviour of insurers. We've seen stories and heard stories of a very cold‑hearted, mean‑spirited approach, a callous approach. In some cases, there have been stories of very sharp practices that warrant further investigation.
You can see by the home of Lesley and Brian here that it's very, very difficult for people to move on whilst they've got this cloud hanging over them. Whether it's an insurance knockback, so there's no funding to actually rebuild, or whether it's not a knockback at all, it's just living in limbo, like the Smiths are here, because the insurers have now taken eight months and this claim is still not even processed. It is truly outrageous, and you've got a home there which is pretty much in the same state it was after the storm and flood event hit and they're still waiting for an answer from the insurers, and the only way that residents and business owners can fight back is by actually engaging water experts or hydrologists or their own building experts.
In the case of Lesley and Brian we've been lucky enough to get a kind‑hearted building expert from Bathurst to come and have a look at this house to try to progress this claim. But in many cases the only way we've been able progress life in places like Eugowra and Molong is through the generosity and the help of the community, both throughout the region and around Australia. That's really what has got us through.
I think the insurance companies have got a lot to answer for, and I'm really pleased that this inquiry will focus and look at the experiences of our policyholders around our region who have, in many cases, been paying premiums for years, expecting that when the worst happened that they would be covered. They've now had the doors slammed in their faces, or in the case of the Smiths there's just no answer at all. It's just conflict. And when you've got people who have lost absolutely everything, who have no home or have no business, how can you actually fight back? How can you put your case forward? The power imbalance is huge and it's not right.
There's great injustice that is being visited upon our region. We need to shine a light on it, so I'm hoping this inquiry will do just that so that people from our area can have their stories told on a national stage, in a national spotlight, so that other communities and other residents don't have to go through this. They don't have to go through the pain and the heartache, and that tragedy is not made worse in the future by the behaviour of insurance companies.
We've had so many stories of claims being knocked back, claims not being processed in a timely way, hydrologists colluding on water reports. All of this stuff. I think by shining a light on it, that in itself may actually get some of these claims moving because since I've been raising this issue we have had a few claims actually progress. Not a whole lot, but we have had some progress, which is something, but there are still a lot of people in limbo out there. And as you can see, just look around Eugowra, people living in caravans and pods.
We're eight months after the event, and still no movement on many insurance policies and claims. It's not right. I think the nation needs to know what is happening here and the fact is that insurance companies, they operate with a social licence, social licence from the nation. And I think if the public hears about what has happened here, I think that social licence is going to be called into question. So I'm hoping some good can come of this inquiry and I'm absolutely delighted that the Minister is here to make this announcement today.
I've probably said enough now, Minister, so over to you.
STEPHEN JONES:
There's no way I'm taller than him. I've got to look after WIN TV, they're from my hometown, I'm a Wollongong boy. Thanks so much.
Firstly, thanks to Brian and Lesley for hosting us here in Eugowra today. Thank you to Andrew Gee for inviting me out to the Central West. We've had a good meeting with business owners in Molong this morning. After we finish up here in Eugowra we'll be going up the road to Cudal to have a conversation with residents and business owners up there.
What's clear to me is there's a lot of people with a lot of stories to tell, and a lot of answers that need to be given.
A few weeks ago, when Parliament was sitting, Andrew asked the Prime Minister whether he'd consider a Parliamentary inquiry into the flood event and the insurance claims process that followed. I'm here today to announce that the Albanese Government will hold such an inquiry, and when we get back to Parliament we’ll put a motion through Parliament, which I envisage will have the support of all Parliamentarians to ensure that we can hold such an inquiry.
I also guarantee that it won't be something that's just run out of Canberra. So that when the inquiry is held, the insurer comes out here to the Central West and talks to people who are directly affected. I expect to see Brian and Lesley there because they're passionate advocates and they've got a good story to tell.
There's lots of parts to this. There's the insurance coverage itself, there's the claims handling stuff that needs to be dealt with. We've also got to look at the underlying risk, and a big of the Albanese Government's approach to this issue is to ensure that we're not putting more houses and more communities in peril.
So we want to ensure that at the very least we're not building more houses and suburbs in floodplains. We want to ensure that at the very least when we are building things back, whether it's infrastructure or houses, that we're building them back better and more resilient to the risks in the areas that they live in.
We want to ensure that when households or communities do the right thing, and firm up their infrastructure or ensure that they're building back their houses to be more resilient, that that's actually reflected in the premiums that they're being charged for insuring their places as well.
All of this needs to be done. If we only deal with one part of it, we'll be back here again, and tragically we'll be hearing the same story. So all of these things need to be dealt with. The underlying risk, the claims handling process and the structure of insurance in this country.
The Albanese Government gets it, we're committed to ensuring that we're able to work with everybody of good intent. And Andrew has been a passionate advocate for this issue, so I want to congratulate him for representing, you know, the concerns of businesses and people in his community to ensure that this issue gets the sunlight that it deserves.
On a personal note, one of the first things I did when I got into town, I dropped into a few of the places. I went over to the craft centre which is doubling up as a community support hub, and I spoke to Sharon. You know, she shared with me the story that she lost her father here in the flood event, an 85‑year‑old gentleman who was tragically washed away and lost in that event. You can see through talking to the local residents, that that tragedy touches everybody and it's still very, very present.
I know we're dealing with a community that is still hurting and the community deserves some answers, but they also deserve, you know, the direct response from the government. Me showing up here today on behalf of the government is a part of that, an indication that we don't want to just read reports or see things on the news. We want to come out and hear the stories first‑hand. So thank you Andrew, thank you Lesley and Brian. And thanks to everyone who shared their stories today. I know in many circumstances that's not an easy thing to do, to relive that tragedy and have to retell your story, so I thank you for the effort you've put into all of that.
With those few words, I'm happy to take questions.
JOURNALIST:
Minister, will the Terms of Reference of this inquiry look at the definition of storm and what's a flood? Because that seems to be at the crux of people's issues here and up in the northern rivers, that the insurance companies are claiming that it was a flood and not a storm, so they're not covered.
JONES:
I think we need to dig into all of these issues. We're not going to be in a situation where we tell people what stories they can and can't tell, what issues they can or can't bring to the fore. We want to ensure that people are able to bring to light and ensure that Parliament is aware of the issues and concerns that they have.
My first response in all of these things is to want to work cooperatively with the community, with the businesses, and yes, even with the insurance companies. But they've got to be held to account, they've got to raise the standard and ensure that people are getting what they paid for.
JOURNALIST:
But will that be something specifically set in the Terms of Reference?
JONES:
I will ensure ‑ we haven't got the final Terms of Reference yet, so I'll work with Andrew, and I'll work with others who have raised their concerns on this issue. I want to give a shout‑out to ‑ she's not in my Parliament but she's a great colleague, Janelle Saffin, who's a member up in Lismore who's raised similar issues with me directly and written to me directly in similar terms to what Andrew has raised with me about the concerns in the northern rivers.
I've spoken to my friend Graham Perrett, and he took me through southeast Brisbane and the area that he represents and showed me the immediate aftermath of the tragic floods in southeast Queensland in Brisbane as well. So this has had a deep impact here in the Central West but also in the northern rivers and southeast Queensland. So we'll ensure that the inquiry is not hemmed into one particular location, but listens to the issues and stories from all locations and deals with the issues that you're raising.
JOURNALIST:
And will –
JOURNALIST:
Increasingly we're also hearing about people who just haven't been able to afford insurance or have had to stop paying their premiums because it's far too expensive. Will the inquiry look at that? Is that something that concerns you?
JONES:
I'm deeply concerned about, yeah, the availability of insurance. I've just got back last week from North Queensland, I was Townsville, I was in Cairns and I was talking to businesses and communities up there and I'm seeing how the availability and the affordability of insurance is not only affecting people in the immediate harm's way of a risk and wanting to do the right thing, it's also affecting economic growth and development in the town. They can't get, you know, buildings up because they can't get the strata insurance available, or they can't get it at an affordable rate. The government understands that insurance is a broad issue.
We can't escape this, the climate's changing and it's affecting weather patterns and it means severe weather events are going to, tragically, be more frequent. The one in one‑hundred‑year event is now, you know, several times in a five‑year period. So we've got to ensure that we're taking these things into account, which is why I said we've got to get the insurance piece right, we've also got to deal with the underlying risk.
And I'm calling out all levels of government here. Local councils who aren't ensuring that their stormwater systems are up to the task. State Governments have got responsibility for planning and development approvals. And the Federal Government which is trying to steer this beast to ensure that we've got a coordinated response to all of it. Not a populous response, a sensible response that deals with the underlying problems in a real and meaningful way. Insurance is a part of it. How we deal with the aftermath of an immediate tragedy, ensuring that claims are dealt with properly, ensure that people have access to affordable expert services.
So I expect the inquiry will dig into the issues that you've raised, Andrew. You've raised a couple of examples with me about, how do people get independent hydrology reports if there's a contest about where the water came from? That's a real issue. You know, individual households can't afford $5,000 or $10,000 to get an independent report. I'd be very pleased if the inquiry dug into these sorts of issues as well, to ensure – or independent building reports, or all of these sorts of things, there's lots of parts to this issue and we don't want to ignore one of them.
JOURNALIST:
What power does the government ultimately have, though, to bring private companies to heel?
JONES:
Well in the area of insurance we're the regulator of the insurance industry. We control the Insurance Contracts Act, so we've got some levers to pull. Not all the levers to pull there. We can deal with insurance inside the square box of insurance. But if we only deal with that and don't turn our mind to the risk, the underlying risk involved, we'll see premiums go up and up and up, less people able to afford it and that'll be massively affect not only people's security and lifestyles in the places where they're living, but future economic development.
I'm concerned about all of these issues, and I don't want to just deal with one part of it, because if we deal with one part of it the underlying problems won't go away. So we've got to look at all of those things, so Andrew's advocacy around the insurance and the insurance claims issue, important, we've got to look at that as well, but we've also got to look at the underlying risk.
JOURNALIST:
You mentioned the processes that the inquiry has to go through to get through Parliament and get established. When would you like to see it launched and beginning?
JONES:
It will be a priority order of business in the next fortnight that we get a motion through Parliament dealing with it. I've already sounded out a bunch of my colleagues. The Prime Minister is 100 per cent behind this, so you've got the authority of the government, you've got the authority of the responsible minister and I'd be very, very surprised if there's a Member of Parliament who doesn't think this is a serious issue.
JOURNALIST:
Well Mr Gee's raised previously that there's a group that's been set up in Parliament which is the Parliamentary Friends of the Insurance Industry. Does the creation and existence of that type of group concern you about how much strength this committee would have to drive change?
JONES:
Look, there's a Parliamentary Friends group for just about everything going. Every disease, every medicine, every industry has got a Parliamentary friendship group. That's not unusual. I can tell you 100 per cent that the government's interest in ensuring we have the consumers front and centre, and we are not going for the short‑term populous but we're going for the long‑term and systemic issues here.
At the point of just repeating myself and sounding boring, if we only look at one part of this and ignore the other parts of it, we'll be back here again. So we want to ensure that we're looking at all parts of this. Yes, we've got to deal with the claims issues that Brian and Lesley have explained their issues here this morning. In Molong this morning the businesses went through stuff. I think, Andrew, we were talking about, you know, insurers going through and making what seems – to any lay person – a pretty weird delineation between, you know, the first 200 millimetres of damage, that's on them, but anything above that, that's floating and therefore excluded.
You know, I think to the lay person they look at that and say, "That's pretty arbitrary and it doesn't take into account how property deals with an event like this." And in fact, how the first responders go in. A first responder will go in and they've got to make the place secure. They're not going to say, "Well, which part of this thing that I'm about to make safe has been dealt with by flood, and which part of it has been dealt with by stormwater damage, and I'll leave the flood stuff alone and I'll only, you know, rip out the bit of the wall which is – and secure the electricals that are part of the stormwater." They don't do it. They say, "What have I got to do to make the building and the community safe?"
We've got to have a bit of real‑world common sense looking at the way that these, you know, tragic events are dealt with by communities.
GEE:
I'd just like to add something too, if I may, just to give you an example of how ridiculous the attitude of some of these insurers actually is. As Lesley and Brian pointed out when we walked in, one of the arguments that they're currently having with their family home here is about the footings, the piers on which this house rests. You can see there's a footing over there which is slightly bent that way, it has a lean on it.
So just to give you an idea of what happened. In this street on 14 November 2022 there were homes being lifted off their piers and being swept that way. There were silos coming down here. There were cars coming down here. So is it any wonder that you might have a footing which is on a lean? But instead of actually working constructively and getting this claim sorted out, it is delay and obstacles from the insurance company. It is outrageous. The people who run these insurance companies should actually come into this house, and breathe in the mould and the flood mud, and look at the state of this house and ask themselves whether that is something they would be willing to put up with in their own families, and I bet the answer would be no.
It's outrageous what is happening here. The pain, the suffering and heartbreak is being made much worse by the behaviour of insurance companies. And that's the cold hard truth. It's very, very hard to rebuild and move on with your lives when you're still fighting insurance companies over ridiculous, petty issues like a leaning footing. I mean it is truly outrageous and that's why they need to be held to account.
People don't understand. Like it's eight months since this storm and flood event, and in many ways the country has moved on, but for people like Lesley and Brian they can't move on. They are stuck here with this storm and flood‑damaged home, and they can't rebuild because they're in limbo with the insurers.
It is absolutely outrageous and disgraceful behaviour and that's the reason that I want to put a spotlight on this, so that we can get these people, our residents moving on with their lives, and they can't do it at the moment.
So, Minister, thank you for coming out. I think it's really important that you have come with a tangible outcome for this community. And one of the issues which I have noticed since day one of this storm and flood event is that there have been plenty of press conferences, plenty of nodding heads in concern, but not enough action. And I'm hopeful that your announcement today will bring that action and can help people in our communities, our residents, move on with their lives, and also ensure that other communities don't have to go through this in the future.
EUGOWRA RESIDENT:
May I say something?
GEE:
Yes.
EUGOWRA RESIDENT:
My home is the yellow one over the road and I've been with the NRMA for 58 years, a blue card member, and they would not pay me. But that night there was all this weather, a bit of the roof was damaged. They paid me $3,000 to fix the roof but all the inside of the house, furniture, everything, everything was ruined, they refused to pay me.
GEE:
Yes.
EUGOWRA RESIDENT:
So, you know, they'd pay for the top but not the bottom. Yeah.
ANDREW GEE:
It's ridiculous.
EUGOWRA RESIDENT:
And also, Andrew, thank you for my birthday card you sent me.
GEE:
All part of the service of a local member. Lesley and Brian, did you want to say anything? Come on over.
I just wanted to – pretty much we just want to say a huge thank you to Andrew for everything he's done for this community, and the way he's gone in to bat for us with the insurance companies is just amazing. Hopefully what he's been doing for us will get us an answer, an answer of – sorry, where we can move on and rebuild our house and, yeah, just everybody that's helped, thank you. A huge thank you.
EUGOWRA RESIDENT:
We are so disheartened about what's going on. It's heartbreaking. We've got a house we can't live in. We're living in a pod that's graciously supplied by the government. All we need to do is get back into our home. We moved here to settle down and retire. We can't do that now because of what is going on. It's heartbreaking how big corporations can walk away with the little guy. We just need an answer. Everybody needs an answer, not just us. Everywhere that's had natural disasters.
EUGOWRA RESIDENT:
Yeah. I mean this town alone there is hundreds of claims that have been knocked back and it's just wrong. It's just wrong. And people are just not really given a reason. It's just, "Oh, you weren't covered for that" and that's it, end of story. But these people, you know, they're trying to, like us, get their life back on track and they've just got no help from people they've been paying insurance policies to forever. You know, as the gentleman just said, 58 years he's been paying NRMA policies and what's he got? Nothing. So yeah, we just need help and Andrew's got that organised for us, and hopefully we get a good outcome.
EUGOWRA RESIDENT:
Thank you.
GEE:
Any other questions, guys?
JOURNALIST:
A new poll suggests Australians are not supportive of the government's migrant intake levels. Should numbers be reduced?
JONES:
Yeah, sure. When I get around the country I talk to small businesses, and you know the first thing they say to me? "We can't get the workers that we need to keep our doors open." So yeah, the migrants, in large part, are filling that need and filling that demand. A significant proportion of those are international students who have come back after the pandemic lockdown and they're coming back to universities here to complete their degrees. So a significant part of that is international students.
Also, you know, people here are on working visas which is a critical source of labour, particularly here in regional Australia where they're a critical part of the workforce. Of course we keep an eye on those numbers. We want to ensure that the economy as a whole, and the country as a whole, can absorb people who are coming in. So we're caught between, you know, obviously, you know, inflationary pressures and housing issues and all the rest of it, but also businesses saying to us, "We need workers" and, "Can we get more people coming in because we haven't got the workforce here in Australia, we need more workers."
I've been into some towns where they've got unemployment at 2 per cent, and workers aren't moving from other parts of Australia to take up those jobs, so those working holidaymakers or international students are a critical part of that workforce.
JOURNALIST:
Just finally on another topic, Jacinta Price wants to debate Linda Burney, while Ben Fordham and the PM have clashed on the radio. Is The Voice debate getting ugly?
JONES:
Look, we're in control of how The Voice debate is conducted. I think it's an important thing that we recognise First Nations people in our constitution and that we all share in a complete story of what Australia is – 65,000 years of continuous occupation and ownership and belonging to this wonderful country. In that spirit, I think we should be having a very civilised debate.
Surely as Australians, Australians are polite people. We're not rude to each other when we bump into each other down the street. We're polite. And I'm sure that we should be able to have a polite civil debate, even if we have differences of opinions. And I want to make this point: This is not a referendum about politicians, and it's not the politicians' voices that we need to hear, it's the voices of ordinary Australians that matter most, and that's the sort of discussion I want to be involved in, not a shouting match.
JOURNALIST:
Minister, Andrew Leigh today is saying that members of the party should be open to not joining factions. What role do factions play in the party and what do you make of his comments?
JONES:
Andrew's a good mate and a good colleague, and I work very closely with him in the Treasury portfolio on lots of issues. He's always a person who's bringing forward, you know, interesting new ideas which challenge us all.
As far as groups within the party, every political parties got them and when they're working well, they're a forum for having civil debates and civil discussions. I think you'll find inside my government and my party, what we have is a very collegiate government that is working well together, across all the groups and flavours and everyone is working to one goal, and that is the betterment of the Australian people and dealing with real issues like the one we're here today.
The first question that Lesley and Brian asked me is not what faction are you in, but what the hell are we going to do over there about these piers on my house and how am I going to get back inside my house? That's what the Australian people want us to be focused on, and that's what I'm 100 per cent focused on. Not internal stuff, but the needs of the people who elect us.
Thanks so much.