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Insurers letting down 'team Australia', inquiry told

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Insurers and financial institutions that discriminate against industries such as coal mining are not supporting the national economy, business representative organisation Townsville Enterprise has told a Parliamentary Committee inquiry hearing.

Director Regional Development and Investment Wayde Chiesa said financial institutions don't have a monopoly on moral authority and coal industry problems in accessing services are “truly concerning”.

“These institutions are so busy virtue signalling to inner-city wokeism that I think they've forgotten how to be members of ‘team Australia’,” he told the hearing. “There's a significant risk, not just to regional communities like ours but to the nation, when major finance and insurance institutions apply bias to appease their capital-city clients.”

Mr Chiesa says Townsville Enterprise is “technology neutral but jobs positive” and it’s important to keep an eye on future technologies and emissions reduction while also supporting existing industries.

The Parliamentary Trade and Investment Growth Committee inquiry into the prudential regulation of investment in Australia’s export industries, has particularly focussed on problems faced by the thermal coal industry in gaining finance and insurance.

Insurance Council of Australia (ICA) CEO Andrew Hall told the inquiry that creating an essential services regime requiring underwriters to cover certain businesses could have adverse ramifications,

Mr Hall said insurers, in considering the risks they cover, must take into account prudential guidance, the risk appetite of capital providers and market conditions.

“I think it would be very dangerous to be compelling financial services sectors to be providing either insurance, or lending or anything else, to certain sectors, over and above all the other factors they need to take into consideration,” he said.

“It sounds like an easy fix, but I think it is far more complicated and could have deeper ramifications if it was applied too simplistically.”

An Australian Small Business and Family Enterprise Ombudsman inquiry last year found insurance is an essential service for business and should not be denied on arbitrary grounds, and has said it is working on an essential services regime.

ICA COO Kylie Macfarlane told the committee the prudential regulator did not provide guidance on any particular sector in the context of climate change but required insurers to consider and manage financial issues arising from physical, transition and liability risks.

“The fossil fuel industry obviously is one that is apparent in the climate policies of the majority of our members as they look at the transition to 2050 in line with the Paris agreement,” she said.