As we approach the state election, it’s crucial to bring attention to a pressing issue affecting businesses in CQ and across Queensland: the rising cost of insurance.

Firstly, we pay both GST and Stamp Duty on insurance premiums. This effectively amounts to a tax on a tax, applied to a critical service. Insurance is not a luxury; it’s a necessity. Removing one or both of these taxes would provide immediate relief to businesses struggling to keep their doors open amidst rising costs.

A critical point recently raised by the Townsville Chamber of Commerce is the obligation for insurers to provide coverage across the entire country. Currently, insurance companies are required to cover every part of Australia to obtain a license. This system, which works in parallel to a reinsurance pool, is designed to ensure a spread of risk. However, allowing insurers to cherry-pick profitable areas while neglecting higher-risk regions like Northern Australia undermines the very essence of insurance.

When the risk is spread over the whole of Australia, the profitability of the insurance industry remains healthy. For instance, the industry saw an estimated profit of $8.2 billion from home, contents, and strata insurance across Australia over 12 years to 2018-19. However, singling out Northern Australia as unprofitable, with a recorded loss of $856 million, highlights a significant disparity. Insurance companies exiting high-risk areas leads to a lack of coverage, driving up costs and making insurance unattainable. To maintain a robust and competitive market, the risk of insuring in Australia must be shared equally across the entire nation.

The Townsville Chamber’s submission also underscores a market failure in Northern Australia. If the private sector is unwilling to provide affordable and attainable insurance, the government must step in to offer baseline coverage. This would include essential building and contents insurance and public liability, akin to how healthcare is provided. A national insurer offering a baseline service would not only be profitable, as more policies would be taken out, but also ensure premium parity across Australia.

Rockhampton is not immune to these issues. We’re affected by floods, storms and fires like our friends up north. The cost of insurance affects every business, from small family-owned operations to larger enterprises. By removing GST and Stamp Duty on insurance premiums and ensuring the risk is spread across the country, we can create a fairer, more sustainable insurance market.