Australian local government has brought cost shifting to the surface once more as it looks like the federal government’s flood insurance costs will be sent to local councils.
Though cities such as Canberra have supported local government decisions to remove state government cost shifting, the Australian Local Government Association (ALGA) has voiced its concerns regarding indications that the federal government is now considering putting the weight of flood risk insurance and carbon tax on local government shoulders.
The ALGA has already been speaking out about its worries regarding the likely carbon tax that will need to be paid on council waste dump emissions, as well as a decrease in heavy vehicle fuel tax credits.
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The most recent target for the ALGA is a hike in council rates in order to provide insurance subsidies for houses that are at a high risk of flooding, and that the councils must insure their own infrastructure assets such as their bridges and roads.
The Natural Disaster Insurance Review Panel – which was established by the federal government in response to the floods in Queensland – released an issues paper which indicated that there should be an increase in council rates so that it would be capable of subsidizing the high insurance rates that are now being paid by approximately 50,000 homes in high flood risk areas.
It also suggested that the property owners in those situations should have to pay 150 percent of the premium of a comparable house that is not in a high flood risk area, and that the remainder of the cost should be covered by a government, insurer, or council flood insurance pool.