Ter­ror fund for in­sur­ance

Port Douglas & Mossman Gazette - - NEWS - PAUL MIL­TON BUT­LER

MONEY from the Fed­eral Gov­ern­ment’s “ter­ror­ism fund” could be used to counter spi­ralling body cor­po­rate in­sur­ance costs for strata ti­tle own­ers in the Far North.

The House of Rep­re­sen­ta­tives Stand­ing Com­mit­tee on So­cial Pol­icy and Le­gal Af­fairs’ chair­man Gra­ham Per­rett, MP, said on Mon­day that “dip­ping into” the ter­ror­ism funds pool es­tab­lished in the wake of the Septem­ber 11 at­tacks could be a short-term fix un­til a per­ma­nent so­lu­tion can be found.

At present there is $13.1 bil­lion in the ter­ror­ism fund.

The Aus­tralian Rein­sur­ance Pool Cor­po­ra­tion which con­trols this money, is a statu­tory au­thor­ity es­tab­lished by the Ter­ror­ism In­sur­ance Act 2003, un­der the Howard gov­ern­ment, to ad­min­is­ter the ter­ror­ism rein­sur­ance scheme, pro­vid­ing pri­mary in­sur­ers with rein­sur­ance for com­mer­cial prop­erty and as­so­ci­ated busi­ness in­ter­rup­tion losses from a de­clared ter­ror­ist at­tack.

Mr Per­rett said the money was first raised af­ter a small per­cent­age was ap­plied to the cost of in­sur­ing all com­mer­cial build­ings across Australia to raise the funds that went into the pool.

“This money re­ally is to help out any city in Australia should we be hit by an act of ter­ror­ism,” Mr Per­rett said.

“You can imag­ine that if a ma­jor ter­ror­ist at­tack was to be­fall Syd­ney, then the $13.1 bil­lion that is in the pool al­ready would barely scratch the sur­face in re­build­ing that city.

“The com­mit­tee rec­om­mends that the Aus­tralian Gov­ern­ment should in­ves­ti­gate and con­sider the im­pact on the costs of in­sur­ance pre­mi­ums for strata ti­tle prop­er­ties.”

Mr Per­rett said the Fed­eral Gov­ern­ment will give a decision on the re­port on De­cem­ber 1.

With very few in­sur­ance com­pa­nies in the Far North of Queens­land want­ing to un­der­write strata ti­tle prop­er­ties, those that are will­ing to take on “the risk” have sent pre­mi­ums soar­ing by as much as 1000 per cent in the past four years.

Many own­ers and prop­erty man­agers say they are be­ing held to ran­som and are an­gered by the price hikes in their strata ti­tle in­sur­ance costs, which they said were killing many busi­nesses and halv­ing the value of their prop­er­ties.

Mean­while, Mr Per­rett, said that there have been a num­ber of rec­om­men­da­tions that have been made since they held their first meet­ing in Port Dou­glas on Jan­uary 30.

And even though the in­quiry into res­i­den­tial strata ti­tle in­sur­ance af­ford­abil­ity has largely re­jected calls for in­ter­ven­tion, Mr Per­rett said there were many rec­om­men­da­tions that had now been re­ceived and the com­mit­tee would hope­fully be in a po­si­tion some­time next month to re­lease some more rec­om­men­da­tions.

“Ob­vi­ously we will be look­ing at the com­pa­nies al­ready pro­vid­ing in­sur­ance and the cost of their pre­mi­ums,” Mr Per­rett said.

One of the most sig­nif­i­cant rec­om­men­da­tions to come out of their early find­ings has called on the Queens­land Gov­ern­ment to im­ple­ment a 12-month mora­to­rium on strata ti­tle stamp duty.

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