Bill's Transcripts

ABC 702 Mornings with Linda Mottram

ABC 702 Mornings with Linda Mottram
28 February 2013


LINDA MOTTRAM:  The Federal Government is of course announcing this morning, it’s about to make the official announcement this morning, about this new plan on flood insurance.  But also includes the prospect that the Warragamba dam may finally, after years of talk, about to be increased in height by about 23 meters. Absolutely huge. Let’s get the details about this from Bill Shorten who is the Federal Minister responsible and who joins us on the line from Brisbane this morning where the announcement is being made. Bill Shorten, thank you for your time today.

BILL SHORTEN: Good Morning.

LINDA MOTTRAM: Now the insurance issue here - explain to us exactly what it is you are proposing.

 BILL SHORTEN: Well after the Brisbane floods of 2011, the Ipswich floods and the terrible floods of south east Queensland the Government has moved to try and improve the offering of flood insurance for home and contents for small business. So the first thing we did is we got a common definition of what a flood is across all insurance companies in Australia.

 Now that might not sound like a big achievement, but it’s eluded Australian home owners and small business people for 45 years. So we’ve done that.  Now up to 83 per cent of Australian home and content insurance policy holders are covered for flood insurance. But one of the big challenges is not just getting a common offering across all companies, it is affordability.

 If you live in an area that is deemed by researches and insurance companies as high risk, flood insurance is very expensive. So I’m attending in Ipswich, west of Brisbane, with our Prime Minister an announcement where she will be stating the Government’s intention to create a National Insurance Affordability Council to coordinate flood mapping efforts, mitigation studies and to assess mitigation projects.

 Because if you’ve got adequate mitigation, then premiums fall. They will bring together the flood risk, insurance and economic experts, they will work with insurers to identify areas where the flood risk premiums are high and strategies to therefore reduce these risks.

 LINDA MOTTRAM: So people in the Hawkesbury Nepean flood plain area are an example of the areas where you will get lower premiums on your insurance?

 BILL SHORTEN: Well ultimately once flood mitigation is constructed we’ve got the undertakings of the industry to lower premiums. There’s real time evidence between Lismore and Grafton, and some towns in Queensland who have got adequate levels of protection, their home and contents and small business flood insurance policies are much lower than towns which obviously don’t have the same protection.

 You mentioned the Hawkesbury Nepean, it’s one of Australia’s most heavily developed flood plain risk areas in Australia. Infrastructure New South Wales found that an event similar to that experienced in Queensland in 2011 could cause billions of dollars in damages and disrupt the main Western rail line. The insurance companies I speak with when we talk about this issue of trying to make flood insurance more affordable regard this as a key area for risk.

 LINDA MOTTRAM: So one of the key measures will be to fund, well partially fund, raising the Warragamba dam – is that right?

 BILL SHORTEN: Well a lot of the experts say that is a preferred solution. We will commit at least $50 million of funding over the next two years to the NSW Government as a contribution to planning and raising the dam. I recognise that it is a more expensive proposition than that, but this is the Federal Government, obviously not stepping into the shoes of state local government who’ve got responsibility for flood mitigation. But if we are going to spend Commonwealth tax payer dollars, scarce dollars, in terms of helping people after the floods, long overdue down payments to try and mitigate floods – this to me is a sensible step.

 LINDA MOTTRAM: Right, as you say $50 million is well short of what will be billions to do that project.

 BILL SHORTEN: I don’t know if the price is in billions. The point is we are not saying that because of this announcement everything is fixed overnight. But it is the Federal Government offering to be of assistance in an area where that hasn’t happened before. 

 LINDA MOTTRAM: Ok, there are criticisms to of raising the Warragamba dam. Will you have comprehensive environmental studies, for example, as part of any project you’re part of?

 BILL SHORTEN: Obviously, yes is the short answer. But the process is that we are going to set up a council to look at mitigation projects in all regions. A start needs to be made.  It won’t be just a decision made by a particular Member of Parliament. There will be processes in place and no doubt there is competing evidence.  But it is fair to say that Infrastructure NSW, the insurance industry, and the Western Sydney Regional Organisation of Councils have been calling for action for many years. I understand there are competing views and they’ll all get heard.

 LINDA MOTTRAM:  And so it’s possible that the end result is not raising the dam, but doing some other things instead?

 BILL SHORTEN: I know what I know and I know what I don’t know. I’m not holding myself out to be a hydrologist or a dam expert. What I am saying is that this Government is committed to working on flood mitigation. This is real tangible commitment. It’s not peanuts and it is a reflection of our real desire to put downward pressure on home and contents insurance and flood insurance for small business.  

 LINDA MOTTRAM: Now obviously there is some political context here because the Prime Minister is going to Western Sydney next week. And you will be hoping for some tick, I suppose, from the community with this? I’m wondering and there is a comment this morning in the Financial Review from the Mayor of Liverpool Ned Mannoun, who of course is a Liberal, he says the Prime Minister should go through the commuting process everyday if she sincerely wants to show that she understands Western Sydney. He is right isn’t he?

 BILL SHORTEN: Well first of all when you link this announcement to the visit next week, this announcement has been worked on well in advance of the suggested itinerary of next week. This is part of the on-going work of the Labor Government. The insurance industry has watched what we have been doing since the Queensland floods. And they are not automatically pro-Labor, but they would say that Labor has been working on issues to do with flood insurance and affordability for years, not a matter of days or an opinion poll cycle.

 In terms of the point about commuting, now the Prime Minister - if she was saying I was going to visit Western Sydney and drives out from Kirribilli - you know she’d be accused of going the wrong way in the traffic. She says she’ll stay out there then she’s accused of not travelling another way.

 I think what is important to recognise here is that the Prime Minister has visited Western Sydney, I understand, at least 17 times in recent times. This is about getting out and about.  I mean I think we have to look at some of the critics and say why are they saying this?  They’d be unhappy if she wasn’t visiting, they’d be unhappy if she was visiting.  They’d be unhappy if she was staying at a hotel in Western Sydney, or staying at Kirribilli. I think recognise the effort for what it is, not for being a knocker. 

 LINDA MOTTRAM: Bill Shorten thanks for your time.

 BILL SHORTEN: Great, lovely, cheers.

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