Angus Taylor has appeared to backflip on the Coalition’s commitment to crack down on insurance companies if they do not bring down premiums.
In February, the opposition leader, Peter Dutton, told Sky News the Coalition was prepared to “intervene” in the insurance market.
“As we’ve done with the supermarkets, where we have threatened divestment, if consumers are being ripped off, similarly in the insurance market, we will intervene,” Dutton said.
But on Wednesday, Taylor, the shadow treasurer, told the Australian Financial Review Business Summit that would not be happening.
“If competition is being thwarted by the behaviour of some in the industry, then that’s completely unacceptable,” he said.
“We’ve said we’ll keep it confined to supermarkets and hardware.”
When asked by host Phil Coorey if it would apply to insurers, Taylor replied: “No. We’ve been clear on that.”
Speaking on Sky later on Tuesday, the treasurer, Jim Chalmers, was critical of what he called “a horrendous contradiction”.
“This is real slapstick stuff, isn’t it? They’re making it up as they go along – one says one thing, another says something completely the opposite,” he said.
“You’d think after three years they could come up with something better than this.”
In the December quarter, insurance inflation grew at its weakest rate since 2022, 1.1%, but according to the Australian Bureau of Statistics, it still grew by 11% across the year.
In the year to March 2024, insurance increases had peaked, with the ABS recording a rise of 16.4%.
In cyclone-prone parts of northern Australia, the government has tried to decrease premiums under the cyclone reinsurance pool, which allows insurance companies to transfer their risk for cyclone damage to the federal government.
after newsletter promotion
But in 2023, the latest Australian Competition and Consumer Commission insurance monitoring report found insurance premiums had increased at their steepest rate in northern Western Australia and the Northern Territory.
At the time of Dutton’s announcement on Sky, his cabinet said it was not official policy and had not been approved by the party room.
The Nationals leader, David Littleproud, told RN Breakfast a day later: “It would be unfair to say that was a policy announced by Peter Dutton.”
In an interview on 2CC radio, Littleproud’s language was weaker than his leader’s, saying the insurance companies were “on notice”.
“Well we’ve proved before that if we believe that Australian consumers are being done over and that there is market forces that aren’t pure, then we are prepared to step in, as we are with the supermarkets, as we did with the energy sector,” he said.
“What Peter has said and what the Coalition is saying to the insurance companies [is] you’re on notice and we’ve got form of standing up to big corporates.”
The Coalition’s divestiture policy for supermarkets was introduced in July to address price gouging and would be used as “a last resort”.
If the policy is enacted, the competition regulator could seek court orders that would compel Coles or Woolworths to sell parts of their business, if there was a significant breach of the law.
