Cyclone pool expansion possible after future review: Labor

30 March 2022

Labor would consider expanding the cyclone reinsurance pool’s scope to include floods more widely as part of a future review but would not hold up the passage of legislation to make the change, Senator Jenny McAllister told Parliament today.

The bill was expected to pass the Senate before the end of the day, paving the way for the cyclone and related-flooding reinsurance pool to begin operation from July.

A Greens amendment to expand the scope of the pool to include all floods was defeated in the Senate after Labor sided with the Government in rejecting the change.

“We want the relief that is promised by the Government to flow through to communities as quickly as possible,” Senator McAllister said. “We don’t intend to hold up this bill by supporting the Greens’ amendment.”

Senator McAllister said expanding the pool’s scope would be a “very significant change indeed to the scope of the program that is proposed” and there is inadequate information available on the cost and what it would mean for policyholders and consumers.

“Labor would look at the inclusion of flood coverage as one of the terms in the statutory review that will already take place as a consequence of this legislation’s passage,” she said.

Greens Economic Justice Spokesman Senator Nick McKim told the Senate an expanded pool would be less administratively burdensome as it would mean insurers would not have to distinguish between cyclone-related and other flooding and it would assist more Australians though lower premiums.

Senator McKim said in a later statement that the passage of legislation to nationalise cyclone reinsurance was welcome but the bill “could and should” have gone much further

“The Greens want to see all housing reinsurance nationalised, this will bring down premiums across Australia, not just in cyclone prone areas,” he said.

The cyclone reinsurance pool will be backed by a $10 billion government guarantee and will be overseen by the Australian Reinsurance Pool Corporation.