Window of opportunity to resurrect Lismore closing, banks and insurers warn

A crucial window of opportunity to resurrect Lismore after the nation’s worst flood event is in danger of closing, insurers and banks warn.

In a letter to NSW Premier Dominic Perrottet, the Insurance Council of Australia chief Andrew Hall and Australian Banking Association chief Anna Bligh last month urged the government to urgently “identify key actions, resources and timing for any rebuild”.

Without this NSW government direction, they fear that residents and business owners will either leave the region or use insurance payouts and government grants to reinvest in areas later deemed uninhabitable.

The city is reeling after the March 2022 flood killed four people, inundated 3045 residential, commercial and industrial buildings and damaged hundreds of millions of dollars worth of critical infrastructure. Lismore City Council this week said its central business district will be uninsurable for years until mitigation works are undertaken.

Insurance council chief Andrew Hall told the Herald on Friday that Lismore needed details of the government’s overarching plan for the community by the end of July, if not earlier.

The council and ABA wrote to the premier following a meeting in early April that included the Motor Trades Association of Australia, Business Council of Australia, Master Builders Association, Customer Owned Banking Association, Australian Retailers Association, and Housing Industry Association.

The floods in March devastated Lismore.Credit: Getty Images

Hall said sections of the Northern Rivers community could become locked into a permanent downward poverty spiral, deepened with each successive major flood event, without the government’s direction on crucial issues, such as whether funded land swaps to higher ground would be available.

“We are absolutely at the moment when people are starting to make really big decisions,” Hall said. “Residents or businesses are starting to receive insurance payouts or government grants, and they want to get on with their lives.

“It’s the big-ticket issues: do I stay? Do I rebuild my house? How do I rebuild my house? Do I reopen my business in this location? Can I get finance to do it?

“All those sorts of things will start being decided fairly soon. [The danger is] the government will face a decision already taken by the community that will be locked in and hard to reverse.”

Bligh, Queensland premier during the state’s 2012 flood disaster, welcomed the ongoing NSW Flood Inquiry and the creation of the Northern Rivers Reconstruction Corporation.

She said the joint letter to the NSW premier should not be viewed as a criticism of the government.

“I know when I was Queensland premier that I didn’t face anything like what has happened in Lismore,” she said.

“And the purpose of the letter was to say [to the NSW government] that you’re not on your own. The corporate sector is here to help.

“We wanted to put into their thinking that residents and businesses are starting to get their insurance payouts and talking to their banks. So, if there is going to be any changes, that people will be looking for clarity now.

“It’s going to be a hard slog for everyone.”

The flood inquiry, headed by former top public servants Mick Fuller and Professor Mary O’Kane, is due to report to Perrottet on causation and future land-use planning and management by June 30. However, the government has not given a timeline for its formal response, which will be implemented by the reconstruction corporation headed by David Witherdin.

Lismore City Council released a discussion paper this week arguing for a planned retreat from the most high-risk flood areas of North and South Lismore, funded by a federal or state government land-swap arrangement to allow residents to move to higher ground.

It also argued for the protection of the central business district and land on the eastern side of the Wilsons River through flood-mitigation measures and the possible expansion of its city centre onto a nearby flood-free golf course.

The paper said further measures were required to protect the commercial heart of Lismore, which would be uninsurable after the March flood unless mitigation measures were undertaken to reduce the risk of frequent flood inundation.

State member for Lismore Janelle Saffin said she has asked asked NSW Treasurer Matt Kean to urgently take up the issue of a flood reinsurance scheme for the Northern Rivers region with the Commonwealth.

“In this current flood disaster we are again faced with a large number of uninsured properties because households and businesses have been priced out of flood insurance,” Saffin said.

“Our region needs a Commonwealth government-backed scheme similar to the Northern Australia Cyclone Reinsurance Pool that covers cyclone and cyclone-related flood damage in cyclone-affected areas – backed by a $10-billion government guarantee.”

Deputy Premier Paul Toole, who has responsibility for the reconstruction, said the NSW government understood the need for recommendations and action to be taken quickly to assist in the affected communities’ recovery and will respond to the recommendations as quickly as possible.

“In the meantime, the NSW government established the Northern Rivers Reconstruction Corporation, which through coordinating the planning, rebuilding and construction work of essential services, infrastructure and housing, includes having ongoing discussions with the Insurance Council of Australia and major insurers,” he said.

The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.