NIBA / Feature
THE 5 KEY AREAS OF NIBA’S PRE-BUDGET SUBMISSION
EXPAND THE DISASTER READY FUND INTO A ROLLING 10-YEAR, INDEXED PROGRAM
INTRODUCE A NATIONAL, CO-FUNDED HOUSEHOLD MITIGATION SCHEME
REFORM STATE INSURANCE TAXES AND LEVIES
NIBA’s proposal to expand the Disaster Ready Fund focuses on shifting the funding model from short-term cycles to long-term certainty, helping governments plan and deliver mitigation infrastructure more effectively. With premiums predicted to rise to levels that would make 1 in 25 homes effectively uninsurable within five years, action must be taken to address the key barriers that drive the affordability and accessibility challenges Australians currently face. The current stop-start funding approach limits large-scale projects and reduces the ability of states and local governments to commit to long-term resilience strategies. A predictable funding pipeline would support investments such as flood defences, drainage upgrades and coastal protection, which take years to design and implement. The objective of this proposal is to reduce the overall economic and insured losses from natural disasters, stabilise premiums and create a more proactive national resilience framework.
Much of Australia’s disaster exposure sits at a property level, and a national, co-funded scheme would see governments and homeowners share the cost of resilience upgrades such as raising homes in flood-prone areas, strengthening roofs against cyclones, or installing fire-resistant materials in bushfire zones. Targeted projects at a household level can materially reduce damage and insurance claims, particularly in high-risk areas. By lowering expected losses, insurers may be able to offer more affordable cover, or maintain availability in areas that are currently approaching a status of ‘uninsurable’. NIBA proposes a co-funded model with Commonwealth and State government contributions, targeting high-risk postcodes.
State-based taxes and levies vary by jurisdiction and directly increase the cost of insurance cover for households and businesses. NIBA’s pre-budget submission calls for the reduction or elimination of these taxes and levies, and replacing them with more equitable, broad- based funding. The current application of taxes and levies remains a significant structural barrier to insurance affordability. The compounding effect of stamp duty, emergency services levies and GST can add up to 70% to insurance premiums, effectively penalising households and businesses seeking to manage their risk responsibly. This issue is also raised by the Insurance Council of Australia in its pre-Budget submission (see sidebar) and NIBA recommends the development of a roadmap for phasing out distortionary taxes and levies on general insurance products.
12 / INSURANCE ADVISER APRIL/MAY 2026
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