Queries over insurance funding for Nth Qld

·2-min read

The Queensland government has announced new funding in disaster insurance to local government areas spanning from Bundaberg to the Northern Territory border, but some aren't convinced.

Deputy Premier Steven Miles announced the $10 million funding on Thursday, aimed at lowering the cost of insurance in the north.

He says the grants are available to 33 councils and the Weipa Town Authority in high-risk, cyclone-prone coastal areas within 50 kilometres of the coastline, to "reduce the impacts of natural disasters ... while also helping to make insurance more affordable".

But Townsville Chamber of Commerce chief executive Ross McLennan says stamp duty is the key issue for premiums at a state level.

"If they're fair dinkum about insurance premiums, they'd change their levy on stamp duty," he told AAP.

Earlier this year, the federal government announced a $10 billion scheme for northern Australia by way of a federal reinsurance scheme.

More than 500,00 property insurance policies are eligible for the scheme to subsidise high premium costs in the north due to a high volume of disaster events.

Storm-affected premiums in north Queensland are three times the price of the rest of Australia.

According to Australian Competition and Consumer Commission data, the average strata premium is $6800 in north Queensland compared with about $3000 for the rest of the country.

A report by the Australian Competition and Consumer Commission handed down in December 2020 found that while insurance premiums for the region are exceptionally high, it was also up to the state's to reduce their stamp duty's in lowering insurance costs.

The Northern Australia Insurance Inquiry found that in 2018-19, consumers in northern Australia paid $79.6 million in stamp duty on their home, contents and strata insurance: $5.5 million in north Western Australia, $9.4 million in the Northern Territory, and $64.6 million in north Queensland.

It also found stamp duty adds between nine and 10 per cent to premiums in northern Australia, on top of the GST-inclusive amount.

The report's recommendations indicate that states "should abolish stamp duties on home, contents and strata insurance products.".

Further, state and territory revenue needs could be more equitably met through other means, as "stamp duties on insurance products are an inefficient form of taxation".

With the Queensland government taking home in excess of $60 million in stamp duty in the 2018-19 financial year, the ACCC report says it's recommendations are in line with previous inquiries into insurance and taxation.

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