Minister Kevin Hogan told the Local Government Professionals Australia Leadership Summit the March flood disaster had exposed market failure by the insurance sector.

If re-elected, “the government has to do something because there is market failure,” said Minister Hogan.

The Assistant Minister to the Deputy Prime Minister and Assistant Minister for Local Government cited the passage in March 2022 of the Cyclone and Flood Damage Reinsurance Pool Bill 2022 as a possible, alternative insurance funding model.

Under the law, homeowners in Queensland are set to benefit from up to a 46% premium discount, strata properties up to 58% discount and SMEs up to 34% discount.

Over 880,000 residential, strata and small business property insurance policies are expected to be eligible to be covered for the risk of cyclone and related flood damage including wind, rain, rainwater, rainwater run-off, storm surge, and riverine flood damage caused by a cyclone.

Minister Hogan rejected the notion of the Commonwealth fully underwriting insurance for disaster prone communities around Australia.

He said that could cause the insurance industry fail.

Minister Hogan reflected on the scale of the disaster around Lismore.  With 3,000 plus homes and 1,100 businesses, Lismore is officially Australia’s most flood affected post code.

 “This is not a clean-up. It is a rebuild. There is physical damage done that will take us years to recover from,” Mr Hogan said.

As to whether there should be rebuilding of communities in new locations, Minister Hogan said, “Lismore does have to have that conversation.”

“I think Lismore CBD will always be where it is. But it will look very different.

Managing floodwater is the focus of a new $10 million CSIRO study backed by the federal government’s National Recovery and Resilience Agency.

Mr Hogan declared, “for everyone who is against engineering solutions to flood mitigation, the debate is over.”

Later, he repeated those comments, triggering community debate about dam construction in northern New South Wales.

Minister Hogan acknowledged the important role played by the professional arm of local government.   

Mr Hogan said if ever we have needed to be reminded about how important local government is, it has been accentuated in the last two years.

“I want to thank you for being leaders in your communities in challenging times,” said the Minister.

“We’ve had to get a lot of stimulus spending out on drought, bushfires and covid-19.

“The level of government that we use to do this, the level of government that was crucial for us as a country to get through those events, were you.

“We needed to get things happening very quickly, we needed to create economic activity, and the entity we worked with was local government.

“You had shovel-ready projects ready to do that were good job creating projects that were good for community and you had the machinery on the ground as well.

“You are the people on the ground. You are the people with the expertise on the ground,” Mr Hogan said.

Minister Hogan supported local government having a voice in shaping future, skilled migration.

Mr Hogan said there is ever increasing demand on what the three levels of government are delivering, adding that current commitments to capital works programs are, “if anything, perhaps too much”.

“I certainly get the issues that this is raising about skills and capabilities, said the Minister.

“We need a lot of flexibility in the way that you delivery these programs.”

Minister Hogan confirmed the coalition would support a local government say in demand-driven skilled migration if it won the election.

And Mr Hogan agreed to consider federal funding to “upskill’ the local government sector.

Minister Hogan highlighted the top four key grant program priorities

The $1.38 billion Building Better Regions Fund (BBRF) supports economic and social infrastructure for the long-term benefit of regional communities. Funding the infrastructure and services that communities need for the future will create jobs and help them rebound strongly from the COVID-19 pandemic.

Financial Assistance Grants – the only untied level of support from any level of government.

Bridges Renewal Program for improving the safety and efficiency of critical bridge infrastructure.

And the $2.5 billion Local Roads and Community Infrastructure (LRCI) program.  The LRCI program supports local councils to deliver 6,100 priority local road and community infrastructure projects across Australia, supporting jobs and the resilience of local economies.

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