The Coalition has once again been forced to clarify its policy on breaking up the big insurance companies, with Peter Dutton now saying “certainly something has failed” in the market as Australians struggle with spiralling premiums.
After days of confusion over whether their divestiture policy would apply to the insurers, the opposition leader appeared to confirmed the Coalition would threaten to break up those companies in instances of market failure (where people can’t obtain affordable cover).
It follows varying statements from Dutton and senior frontbenchers about whether the policy would or would not apply to the insurance industry.
On Monday, the deputy opposition leader, Sussan Ley, said: “We do not propose divestiture with respect to insurance companies” but on Wednesday said the Coalition would “not hesitate to act” on concerns in the insurance industry.
Ley said her Monday comment was taken out of context.
After three weeks of differing answers between himself and various colleagues, Dutton on Wednesday said: “I’ve been very clear and I think we’ve been very consistent in relation to our policy position.
“If there is a failure of the market here, if the free market has failed consumers – certainly something has failed consumers at the moment because under this government people are paying 20 or 30%, in some cases much higher increases in premiums, in many cases they just can’t get insurance.”
Last week saw Dutton and the shadow treasurer, Angus Taylor, seemingly at odds over whether the Coalition’s proposed divestiture powers would extend to the insurance industry.
Three weeks ago, Dutton said they would; last week Taylor claimed “we’ve been clear” that they would not, as did Ley and the shadow finance minister, Jane Hume.
Dutton on Tuesday maintained the divestiture policy would extend to insurers, saying a future Coalition government would seek to break up companies if it received advice that a “concentration of market share has led to businesses and families not being able to get insurance cover, or indeed has led to people paying astronomical prices for their premiums”.
Asked about the seeming differences in stance from his senior colleagues, Dutton denied there was any inconsistency.
On Wednesday Dutton was pressed on whether the insurance industry was presently concentrated enough that it would activate his policy’s divestiture powers.
The opposition leader said he would seek to “act very quickly” if he received such advice in government that “there is a concentration of market share that is distorting the insurance market, driving up premiums and meaning that people are being excluded from getting policies”.
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“If there is a market problem here, if there is a failure within the market, it’s unremarkable to say that a government would react.”
The Insurance Council of Australia pointed to a LinkedIn post from its CEO Andrew Hall, who wrote online that governments could help ease premiums by investing in disaster resilience and lowering taxes on insurance.
In a Sky News interview on Wednesday, prior to Dutton’s press conference, Ley denied there was any difference between the positions of various Coalition members.
“If we are in government in the future, and we receive advice that there’s concentration of market power in the insurance sector, we will not hesitate to act. We will not hesitate to act. And this is the point. So there actually is no inconsistency,” she said.
Asked by host Peter Stefanovic about her earlier remarks that the Coalition didn’t propose divestiture, Ley said the “full context” had been mischaracterised.
“If we’re in government and we see evidence of concentration of market power in the insurance sector, then we will not hesitate to act. That’s clearly what we have all said. That is something that we have said, because it’s important that we do put insurers on notice,” she said.
“However, what’s actually in place now relates to supermarkets and hardware stores. So, no inconsistency whatsoever.”
Ley was asked in a press conference on Monday: “Would a Coalition government pursue divestiture power for insurance companies, and would you look to break them up if they’re not satisfied with their behaviour when it comes to this flooding?”
According to a transcript from her office, she responded: “Well, two points to make, one is that we do not propose divestiture with respect to insurance companies, and we’ve made that clear.
“But I always say, in a crisis, in a natural disaster, when insurance companies have a role, we will watch them closely. We will make sure they do the right thing.”