Subsidised cyclone insurance for northern Australia back on agenda

By David Crowe

The federal government has stepped up plans for a controversial scheme to subsidise cyclone insurance across northern Australia after rebuffing calls for greater investment to mitigate the growing risk of damage from climate change.

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But the proposal revives a contested idea from four years ago that risks a clash with industry and will place more demands on the federal budget, given Treasury estimates of a "10 to 20 per cent chance" of a $2 billion cost to taxpayers over a decade.

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"The government will now work collaboratively with industry on possible options, including the feasibility of a cyclone reinsurance pool and public and private mitigation strategies, to achieve premium reductions and increases in coverage," [Assistant Treasurer Michael Sukkar] said. "Tackling the problem of insurance affordability in northern Australia is a complex issue. It's not a problem we can solve alone, and is a challenge for all levels of government."

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Some parts of the industry are pressing instead for stronger action on climate change and mitigation, arguing the government should deal with the underlying cause of the growing danger from natural disasters including cyclones.

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