Home / Regulatory & Government / Mitigation, ACCC review backed by bushfires inquiry
13 December 2021
A Senate committee inquiry triggered by the Black Summer catastrophe has backed increased mitigation and resilience spending and an Australian Competition and Consumer Commission (ACCC) examination of insurance cover as part of actions to help lessen the impact of future bushfires.
The final report makes 16 recommendations around issues such as funding and research, aerial firefighting capabilities and responses to tackle underinsurance.
“The committee is of the view that a number of strategies are worth exploring in order to effectively address the potential for insurance market failure in bushfire prone regions,” the report says.
Issues to be considered include the risks and potential limits of different government insurance market interventions, such as the new cyclone pool targeted to start in July, with the report raising concerns about taxpayers increasingly bearing costs of climate-induced failings.
“One of the reasons for the debate in relation to a flood and storm pool for northern Australia was the fact that, in many areas, no insurers were offering flood or storm coverage in some towns or postcodes,” it says.
“It would be worthwhile tasking a suitable regulator with assessing the extent of coverage for bushfire risk across Australia.”
The proposed ACCC inquiry would examine pricing and availability, premium cost components, terms and conditions, the competitiveness of the market and barriers to entry or expansion.
The report recommends tapping the Emergency Response Fund for increased mitigation and resilience investment and that the Government could apply a Disaster Resilience Star Rating model developed by the Bushfire Building Council of Australia when assessing projects.
“For small communities, towns and regional cities in bushfireprone regions of Australia that are striving to grow and flourish, the affordability of insurance is increasingly recognised as a challenge to liveability and economic prosperity more broadly,” the report says.
“The cost of insurance in bushfire prone regions is not just a problem for the region, but for the country more generally.”
The report is available here.