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Queensland Flood Funds - Nick Xenophon Inquiry into Queensland Government relationships with Insurers

Nick Xenophon has initiated a parliamentary inquiry with very wide terms which should reveal any relationships between the Queensland Government and Queensland insurance terms for people affected by floods in that State. Since the Queensland Government has been responsible for the planning that has led to building on known floodplains, I would hope that the inquiry will receive and make public any documents revealing how the Government and insurers dealt with these risks in advance. The Inquiry asks for documentation going back to 2000.

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Unlike all other states in Australia, the Queensland Government failed to insure its assets on the global market, probably because of the very risky planning in Queensland. This failure dramatises the unfairness of not warning Queenslanders that their homes were practically uninsurable due to being built on floodplains.[1]

Inquiry into State government insurance and flood levy

Terms of Reference

Senator Xenophon, pursuant to notice of motion not objected to as a formal motion,
moved business of the Senate notice of motion no. 4—That—



(1) The following matters be referred to the Economics References Committee for

inquiry and report by 2 May 2011:

(a) the provisions of the Tax Laws Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011 and the Income Tax Rates Amendment (Temporary Flood and Cyclone Reconstruction Levy) Bill 2011;

(b) current insurance and reinsurance arrangements of the states and territories of their assets and infrastructure;

(c) the appropriateness of fiscal arrangements for natural disaster reconstruction efforts; and

(d) any related matters.



(2) Given that the proposed Flood and Cyclone Reconstruction Levy is intended to be allocated to the State of Queensland:

(a) the Senate calls on the Queensland Government to provide to the committee any correspondence, and any related documents, between the Queensland Government and any insurance advisers, insurance brokers, reinsurance brokers, insurers and reinsurers in relation to providing services or insurance products, or offers or proposals of insurance or reinsurance of Queensland Government assets, from 1 January 2000;

and

(b) in conducting its inquiry, the committee seeks from any relevant individual, corporation or other private entity, any correspondence, and any related documents, between the Queensland Government and any insurance advisers, insurance brokers, reinsurance brokers, insurers and reinsurers in relation to providing services or insurance products, or offers or proposals of insurance or reinsurance of Queensland Government assets, from 1 January 2000.



(3) In undertaking the inquiry, the committee hold at least 3 days of public hearings in Queensland.
For further information, contact:

Department of the Senate
PO Box 6100,
Parliament House
Canberra ACT 2600
Australia
Email:economics.sen@aph.gov.au

[1] Lauren Wilson, "State's insurance omission binds PM, " The Australian, On February 4, 2011. Note that Anna Bligh would be the person responsible for this omission and that it is more than likely that anyone involved in planning policy at a high level in Brisbane also knew of this.

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[Ed. Also, only two submissions received yet. People need to make many more!]

Interim report
Inquiry into the state government insurance and the flood levy

20 April 2011
Senator the Hon John Hogg
President of the Senate
Parliament House
CANBERRA ACT 2600

Dear Mr President

Pursuant to Senate Standing Order 38(7), I present to you an interim report of the economics References Committee in relation to the Committee’s inquiry into state government insurance and the flood levy.

The reference was referred to the committee on 3 March 2011 for report by 2 May 2011. The committee was directed to examine:

• the provisions of the flood levy bills;
• current insurance and reinsurance arrangements of the states and territories of their assets and infrastructure; and
• the appropriateness of fiscal arrangements for natural disaster reconstruction efforts.
As directed by the Senate, the committee has written to the Queensland Government requesting any documentation it has relating to arrangements it may have made to insure or reinsure state assets. The committee has not as yet received a response from the Queensland government.

The committee has also written to the insurance company AON Benfield requesting any information it may have on offers or proposals of insurance or reinsurance for Queensland's state assets. It is awaiting a response from the company.

To date, the committee has only received two submissions, from the Commonwealth Grants Commission and a Melbourne-based academic.

The committee has been directed by the Senate to holding public hearings in Queensland. In addition to a planned Brisbane hearing, the committee intends to hold a public hearing in Canberra to hear from Treasury, the Commonwealth Grants Commission and the Insurance Council of Australia, among others.

Accordingly, the committee requests an extension of time to report until 30 June 2011.

It is crucial that the committee receives and analyses documentation from the Queensland Government and other parties on the state government's arrangements or offers to insure state assets.

Senator Alan Eggleston
Chair

New South Wales and Victoria are again experiencing floods. People in country towns are getting around their properties in boats,are being evacuated from their homes, and are up madly sand bagging towns to protect them from inundation.
Yesterday I heard a very interesting interview with Professor Brian Finlayson from the Dept. of Resource Management and Geography,University of Melbourne about the the flood situation in Australia. The following is the main thrust of the interview.

Every year there is a 1% chance that these very high floods will occur. (hence they are called once in a hundred year floods but they are not confined to once every 100 years - as most people reading this would understand.)

Recent flood events are not caused by climate change. CC is not here yet. When it comes it may make things more erratic.

The presenter asked if La Nina now occurs more often. Reply- These are very big systems and we have only observed them for such a short time – it not possible to say there is any change in pattern.

Presenter asked: What is so different about Australia to cause such floods? Reply: The continent is very flat with very wide flood plains. In Australia the big floods are 6+ times the normal floods. Other countries e.g. in Europe N America- China- they are about 2 x normal floods.

We are flying blind dealing with this because we do not have records going far enough back. The proper information for planning new housing subdivisions does not get to the level of local councils and they give permission to build where they should not.

Lack of knowledge of floods was shown in the construction of the Hume Weir last century where the spillways proved insufficient even during construction and extra spillways had to be made as they went along.

The Victorian Water Minister’s support of a recent suggestion to remove vegetation from rivers to make water run away quicker is not practical. During a flood only about 8% of the water is actually in the river channel and removing vegetation and concreting the river bed may bring this up to 10%-12%. This is not of any use.

We cannot engineer our way out of this problem.
The presenter then thanked Prof. Finlayson, finishing with the quip that his statements would have him crossed off Infrastructure Australia's (hypothetical) Christmas card list!

Australian floods are not new.
The flood records are there with government, yet governments continue to allow homes to be built on flood prone land.

Australian Government flood risk strategy is two fold:

A. Hope it wont happen again
B. Pay the damage cost afterwards, rather than the preventative cost (e.g. levies) in advance.

The result in a known La Niña cycle is to be expected.
That is what we have now.

My Country

The love of field and coppice,
Of green and shaded lanes.
Of ordered woods and gardens
Is running in your veins,
Strong love of grey-blue distance
Brown streams and soft dim skies
I know but cannot share it,
My love is otherwise.

I love a sunburnt country,
A land of sweeping plains,
Of ragged mountain ranges,
Of droughts and flooding rains.
I love her far horizons,
I love her jewel-sea,
Her beauty and her terror -
The wide brown land for me!

A stark white ring-barked forest
All tragic to the moon,
The sapphire-misted mountains,
The hot gold hush of noon.
Green tangle of the brushes,
Where lithe lianas coil,
And orchids deck the tree-tops
And ferns the warm dark soil.

Core of my heart, my country!
Her pitiless blue sky,
When sick at heart, around us,
We see the cattle die -
But then the grey clouds gather,
And we can bless again
The drumming of an army,
The steady, soaking rain.

Core of my heart, my country!
Land of the Rainbow Gold,
For flood and fire and famine,
She pays us back threefold -
Over the thirsty paddocks,
Watch, after many days,
The filmy veil of greenness
That thickens as we gaze.

An opal-hearted country,
A wilful, lavish land -
All you who have not loved her,
You will not understand -
Though earth holds many splendours,
Wherever I may die,
I know to what brown country
My homing thoughts will fly.

~ Dorothea Mackellar, 1908

Tigerquoll
Suggan Buggan
Snowy River Region
Victoria
Australia

Although Dorothea Mackellar lived into her eighties through which period she could have observed the many moods and phases of Australia's climate, she actually wrote this poem when she was only 19 years old. The poem is amazing for its beauty but even more so for the perception of the character of the Australian continent in all its harshness subtleties. Few people at that age can take all this in but as a friend reminded me this morning- the people at the turn of the last century were much more connected with the land than most of us are today.