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The Treasury Natural Hazards Insurance and Levy Setting

Posted in National; Tagged Emergency management; Posted 19 months ago by DPA Less than a minute to read

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To: The Treasury
Date: February 2025

 

Purpose

The submission’s primary purpose is to highlight the significant barriers disabled people face regarding housing and accessing it in the wake of natural disasters. DPA advocates for policies ensuring that all accessible rebuilds and repairs are undertaken quickly, the need to mitigate the impact of increases in insurance levies on low-income households and disability support providers, while simultaneously respecting the need to maintain the viability and sustainability of the Natural Hazards Insurance scheme.

Summary of DPA submission

DPA highlights that disabled people face significant barriers related to housing, particularly in the aftermath of natural disasters. Disabled individuals are more likely to rent than non-disabled people (38% vs. 30%), primarily due to being on lower incomes and facing higher disability-related living costs. This demographic is further disadvantaged by a chronic and ongoing shortage of accessible rental properties, making it profoundly challenging to find suitable homes if forced to move for any reason.

A significant number of disabled and older people reside in supported residential living services and aged care facilities. DPA stresses that any loss or serious damage to these homes from natural disasters results in disabled people facing significantly longer periods in temporary accommodation, which is often inaccessible and unsuitable.

DPA argues that disabled people, whether renters or homeowners, who were living in accessible housing prior to a disaster, require faster rebuilds and/or repairs to ensure they can return to their homes as soon as practicable. Similarly, aged care and supported residential living providers need assurance that damaged facilities can be quickly repaired or rebuilt to safely rehouse residents.

DPA acknowledges the necessity of additional revenues to maintain the liability, sustainability, and liquidity of the Natural Hazards Insurance scheme, especially as climate change and geological risks escalate. However, DPA expresses concern about the financial burden any levy rises will place on disabled people sustainable scheme while removing anomalies.

DPA's preferred levy option is Option 3 – Technical levy rate less two cents, which would result in a maximum annual payment increase of $180 (plus GST), making it more affordable than other options. Of the phasing options, DPA supports Option 2C, a three-step increase of $99 in each of the three years from 2026-2029. Furthermore, DPA supports increasing the building cover cap from $300,000 to $400,000 to reflect rising property values and rebuild costs.

 


Key Recommendation/Finding:

DPA supports the gradual phasing in of levy increases to avoid additional costs being placed all at once on householders and residential providers, irrespective of whether they rent or own their properties, in recognition of the ongoing cost-of-living crisis.

 


Supporting Statement:

"Disabled people face significant barriers, both in terms of housing and accessing it in the wake of natural disasters."

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DPA Submission 2602 The Treasury Natural Hazards Insurance and Levy Setting (DOCX)

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