Taxpayers could fund cyclone insurance

TAXPAYERS all over Australia would fund the cyclone insurance of homes in North Queensland under a proposal being canvassed by a Federal Government taskforce.

The move could expose the federal budget to billions of dollars in costs but is being seriously considered by the Northern Australia Insurance Premiums Taskforce, which is looking at how to deal with expensive cyclone insurance for communities in the country’s north.

At present, people in north- ern Australia pay much higher insurance than the rest of the country because of cyclones.

The taskforce earlier floated the idea of taxpayers around the country picking up the tab for the difference in insurance costs. Even a more moderate proposal being pushed by Leichhardt MP Warren Entsch to set up a “mutual” in northern Australia to fund cyclone insurance on top of residents’ general insurance would need significant Commonwealth funding to get started.

“Over the past few years, consumers in northern Queensland have been concerned about the level of insurance premiums, the speed with which they have risen and uncertainty around the size of the next year’s increase,” the taskforce’s interim report says.

“Some of the options to reduce premiums to consumers involve the Federal Government taking the risk of losses due to cyclones.”

Mr Entsch said earlier this year that the taskforce was one of the conditions he set for supporting former PM Tony Abbott earlier this year during his first leadership crisis.