Flexible products, reduced taxes could help in North Queensland

Flexible products, reduced taxes could help in North Queensland | Insurance Business

Flexible products, reduced taxes could help in North Queensland
In a speech to the leading lights of the insurance industry, assistant treasurer Josh Frydenberg, has said that more needs to be done to impact affordability in North Queensland.

Speaking at the Insurance Council of Australia 2015 Regulatory Update, Frydenberg called on the insurance industry to develop and distribute “more flexible products” to help tackle unsustainable pricing in the region.

Noting that the Government will continue in its plans to develop a comparison website for the region, launch an engineering assessment programme for strata properties and clarify the use of UFIs for insurance, Frydenberg believes more should be done.

“Industry has an important role to play in designing more flexible products to better meet the needs of North Queenslanders. It is better for individuals to have some insurance cover than none at all,” Frydenberg said.

“A longer term solution to the issue of insurance affordability in North Queensland needs to be prioritising mitigation.

“This must include improvements to building standards which are the responsibility of State and local governments.”

Frydenberg also noted that it is not just industry that needs to lead the charge against the current North Queensland system but State and local Government needs to recognise its own role in the pricing issue, calling for a re-think on stamp duty.

“State and local governments also need to understand their role in contributing to high insurance costs," Frydenberg said.

“With home and contents premiums in North Queensland substantially higher than other regions in Australia, insurance stamp duties are an unfair tax on North Queensland. 

“This was an issue raised by insurers in their submissions to the Financial System Inquiry, and it has been picked up in the Inquiry’s final report as a tax issue for consideration. 

“I strongly encourage the Queensland Government to consider how they can also assist in making insurance affordable for everyone.”
  • Johnny 2015-03-01 10:49:30 PM
    This seems a more considered response from the government, than the previous shots from the hip. I'm not sure however, what Mr Frydenberg has in mind with his flexible solutions. Why is there no mention of the insurers who cherry pick and have a complete embargo on the region. This is a more detrimental position to the region but receives no criticism.
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  • Robert Cooper 2015-03-02 12:31:04 AM
    The Queensland Government could remove Stamp Duty on all Domestic Property Insurance which would save 9.9% straight away on the cost of insurance for people in this region. We were promised that stamp duty would go when the GST came in but it never happened. Stamp Duty on any Insurance policy is a disincentive to obtaining adequate cover due to the added costs.
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  • Scott 2015-03-02 3:42:52 AM
    I think it might seem more considerate as it is more vague - they are just aware "something" needs to be done. I think a large help might be in building codes - much like how flood prone area need flood defences (levees), cyclone prone areas probably need cyclone defences (stronger walls?). If Emerald & Roma have shown us anything though, it is that councils rarely want to take responsibility for approving homes in dangerous locations.
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