MATT THISTLETHWAITE MP
SHADOW ASSISTANT MINISTER FOR FINANCIAL SERVICES
SHADOW ASSISTANT MINISTER FOR THE REPUBLIC
MEMBER FOR KINGSFORD SMITH
STEPHEN JONES MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR FINANCIAL SERVICES
MEMBER FOR WHITLAM
The Morrison Government is forcing too many small businesses to be uninsured while overseeing a market failure in the insurance sector that risks killing more jobs.
Today’s Insurance Inquiry report from the Australian Small Business and Family Enterprise Ombudsman shows the Morrison Government’s inaction is another kick in the guts for already struggling Australian businesses.
The report outlines the pressures small and medium enterprises (SMEs) face when it comes to getting affordable insurance and makes it clear the Morrison Government has left them to fend for themselves instead of doing something about the market failure.
Many insurers have withdrawn from selling natural catastrophe cover to SMEs or have increased premiums to unaffordable levels with Australia now facing a higher than average chance of natural disasters this summer and the ongoing threat of potentially devastating impacts of climate change.
The market failure has left too many Australian businesses on the brink of collapse and unable to secure insurance products they need to keep operating. Hundreds of small businesses have already contacted the Ombudsman with fears they would have to close if insurance wasn’t available to them.
Labor understands the frustrations of these SMEs that have been left in the lurch by their insurers and had their concerns ignored by the Morrison Government. We have highlighted that insurers refusing to do their job could impact on the viability of small businesses and lead to further job losses across the nation.
The report makes 15 recommendations that range from banning conflicted remuneration for insurance brokers, regulating premium increases above 15 per cent and government being an insurer of last resort. There are some items that the Ombudsmen has pointed out that the Morrison Government must priorities and that Labor would welcome:
- Requiring Councils and States undertake a suitability assessment for rezoned land is something the Minister should have been working with industry and local councils on since he took office
- Making insurance companies give 60 days’ notice for a renewal refusal or premium increases above 15 per cent and a statement providing reasons for the change as well as changes a business can make to continue their insurance or reduce premiums
- Requiring insurance quotes include a breakdown of commissions, fees and taxes, including administrative costs and broker fees
- As well as the long overdue use of a clear list of exclusions and standard definitions across insurers.
Businesses recovering from the impacts of recent natural disasters and the Covid pandemic must not be forced to close because of yet more insurance inaction from the Morrison Government.
The Insurance Inquiry report is yet another call for the Morrison Government to finally take action to protect and support Australian small and medium businesses.