Cairns MP Rob Pyne has joined calls to resurrect Queensland’s State Government Insurance Office (SGIO) to tackle allegedly unaffordable home insurance premiums in northern Australia.

The Cairns Post newspaper has been campaigning for action following a petition set up by mortgage broker Roger Ward that claims some residents have seen premium rises of 800%.

Mr Ward says resurrecting the SGIO, which was privatised in the 1990s, would “offer a general insurance and strata property insurance product that is comparable with policy costs in other states”.

Independent state MP Mr Pyne says if he is re-elected in the Queensland elections to be held within the next year, he will table legislation to re-establish the SGIO.

“This is a major election issue in the far north,” he said. “I will be campaigning on this and, should I be re-elected, I will have a mandate to act.”

Mr Pyne has also questioned political donations made by insurers and the Insurance Council of Australia (ICA), and the impact they could have on decision-making.

As reported by insuranceNEWS.com.au, total donations to political parties nationally from ICA last financial year exceeded $134,000, with 63% going to the Liberal Party and the rest to the ALP (see earlier story).

“This is another big issue that begs the question: are the big parties working for the people or the corporations who pay them?” Mr Pyne said. “I have had people in my office in tears about the cost of insurance. People in body corporate units feel particularly discriminated against.”

ICA has questioned the logic of re-establishing the SGIO.

“Governments in Australia have long been exiting the insurance business because they lack the expertise, and to remove the burden it places on their budgets and the negative impact on their credit ratings,” spokesman Campbell Fuller told insuranceNEWS.com.au.

“As Queensland Treasurer Curtis Pitt noted last week, the State Government doesn’t have the capacity to run a general insurance business unless it diverts funds from other priority areas such as health and education.”

Mr Fuller says “strong and consistent evidence” shows government intervention is not the solution to lowering premiums in north Queensland.

“As the final report of the Northern Australia Insurance Premiums Taskforce concluded last year, mitigation and resilience measures are the only sustainable way to reduce household insurance premiums in cyclone-exposed parts of Australia,” he said.

“It also found that establishing a mutual or government reinsurance pool could leave taxpayers exposed to a multibillion-dollar liability, and may not have any significant impact on premiums.”

ICA has also rejected “the suggestion that political donations have produced favourable decisions for insurers”.