RACT has warned the state government’s proposed public insurer could saddle taxpayers with billions of dollars in losses if a major bushfire strikes.
CEO Mark Mugnaioni said the organisation shared concerns raised by the Insurance Council of Australia about the sustainability of the TasInsure proposal.
“On the basis of what the government has said, targeting high-risk households, high-risk businesses, the government could end up holding tens of billions of dollars of high-concentrated risk across the state,” he said.
“If we had another bushfire like Dunalley or the ’67 fires, God forbid, that could be billions of dollars that would flow through to the government balance sheet that we as taxpayers would have to foot.”
Mugnaioni said RACT was not opposed to competition from a government insurer, but questioned whether the proposal addressed the underlying causes of rising premiums.
“We’re not an insurance company. We’re the largest member-owned club in Tasmania,” he said.
“Our interest is not commercial in this space. Our interest is in making sure that Tasmanian families and businesses can actually afford insurance coverage.”
He said bushfire risk remained Tasmania’s single greatest challenge, unlike any faced by other Australian states.
“That creates a unique set of challenges which will require a unique Tasmanian set of solutions,” he said.
RACT has submitted a detailed proposal to the government and is set to meet with officials in the coming weeks.
Mugnaioni declined to reveal specifics, but said the submission outlined practical measures, including improving household resilience to climate change and reforming tax frameworks around insurance.
RACT has also committed more than $1 million to research in partnership with the University of Tasmania and bushfire expert Professor David Bowman.
Mugnaioni said he was confident the government’s appointed expert John Trowbridge would provide impartial advice on the best path forward.
“TasInsure is not the right answer, but this is definitely the right problem that we as a community need to be solving,” he said.
