A politically divided Senate inquiry into the last bushfire season has delivered an interim report which notes the importance of disaster mitigation while delivering a few backhanders to the insurance industry along the way.

Recommendations from the Finance and Public Administration References Committee include that, as a matter of priority, the Government releases money for mitigation projects through the Emergency Response Fund.

The fund has $50 million available each year to build resilience – and by August none had been released – but that sum is well short of levels the insurance industry has long argued state and federal governments should spend on mitigation.

Beyond that recommendation, mitigation is a more complicated issue for the committee, becoming tied up in questions around climate change and criticism of the industry for not doing enough on the causes of global warming.

The committee says it will continue to engage with the industry and others as the inquiry continues to explore mitigation funding models, assessment processes and projects that would make a real difference.

But it also skewers insurers for being keen for governments to spend more without truly throwing their weight behind reforms necessary to achieve emissions reductions and address long-term climate challenges.

The majority report passes the buck on ditching levies on insurance for emergency services funding, which would help address affordability, arguing it is a matter for states and territories, change is not politically easy, and the industry just needs to keep engaging on bipartisan proposals for reforms.

The report recognises the risks from underinsurance, but the potential for premiums in high-risk areas to keep on rising is highlighted as a concern that requires more regulation.

It proposes the Australian Competition and Consumer Commission monitor prices, costs and profits relating to insurance premiums, with particular attention paid to the impact of climate change-driven severe weather on the natural perils component, which is expected to increase over time.

“We do not accept the proposition that policyholders should carry the entire burden,” the committee says.

“This is particularly the case in circumstances where the industry is calling on taxpayers to make significant mitigation expenditures and forgo significant tax revenues, while the industry itself is not prepared to publicly engage with the strongest possible mitigation measure available – rapid emissions reductions and decarbonisation.”

The committee is not convinced the industry is taking adequate steps to protect either policyholders or itself from the risks, whether excessive premium increases, or company financial volatility and vulnerability.

Other recommendations include that the Australian Prudential Regulation Authority (APRA) immediately recommence work on a climate change-related prudential practice and governance guide for the industry, after progress was suspended due to COVID-19 priorities.

The committee says APRA should – if it hasn’t already done so – also undertake stress testing, including consideration of capital adequacy “in anticipation of worst-case scenario weather events causing catastrophic insurance losses, either singly or in combination”.

The committee was chaired by Labor Senator Tim Ayres and included Labor Senators Kimberley Kitching and Murray Watt, and their report includes criticism of the Morrison Government’s actions before the summer catastrophes.

A dissenting report has been released by two Liberal Party members, while Greens Senator Janet Rice and Pauline Hanson’s One Nation Senator Malcolm Roberts have also provided their own additional comments.

Liberal Senators, propose an alternative recommendation to the ACCC proposal, suggesting governments that currently rely on insurance funding for emergency services should “as a matter of priority follow Victoria’s lead by removing these levies” and investigate alternative funding sources.

They say it is “entirely appropriate” for APRA to suspend consideration of non-urgent matters, and regulators should be focused on assisting businesses to get through the worst economic crisis since the Great Depression.

The Greens call on Parliament to declare a climate emergency, while Senator Roberts says “the politicisation of bushfires” has detracted from the inquiry and tainted recommendations.

The committee is due to deliver its final report by the last sitting day of 2021, so the environment will be no less political by then, with a federal election likely anytime from next August to the following May.

Whatever flows from the committee’s report, there’s a clear recognition of the crucial role that insurance plays in the big picture and also that it effectively delivered support to communities last summer.

“The availability and affordability of insurance are essential for economic development, the financial cohesion of society and peace of mind in a world that is experiencing rapidly increasing risks of natural peril,” the report says.

There can at least be agreement on that.