Legislative Assembly for the ACT: 2003 Week 2 Hansard (5 March) . . Page.. 531..
MR WOOD (continuing):
very low income and do not have the ready cash or otherwise to look after themselves for that short period. That is basically the process. That service is now up and running and I will catch up with you one day about how it is going. I guess that it will be fairly busy.
MRS CROSS: Thank you, Mr Speaker. My question is to the Treasurer, Mr Quinlan. I refer the Treasurer to his comments on ABC radio today when he indicated that the territory may have been underinsured following the 18 January bushfires. Minister, what is the process that the territory undertakes to insure that government assets, and are you of the view that this process has been adequate in light of the 18 January bushfires? In your answer, Minister, please indicate whether you, as Treasurer, will be making a submission to the McLeod inquiry about the state of the territory's insurance.
MR QUINLAN: Thank you, Mrs Cross. First of all, I want to reassure the house that I am very satisfied that the insurance coverage we have now is as good as it could have been. We actually sent some officers overseas to London to renegotiate insurance policies, and to enhance them, back in about March of last year.
We are underinsured in as much as we do have to pay an excess. We will be paying an excess of probably $5 million-somewhere between $4 million and $5 million on the coverage of the various assets lost. We will be paying another $4 million excess on the policy that covers the pine forests. The coverage is fairly good. The coverage of insurance effectively includes replacement, as opposed to the written-down value of the assets, and it also incorporates some elements of clean-up associated with those assets.
I may have given the impression this morning that we may not have been fully covered because the policy also covers fire fighting, but fire fighting that can be attributed to trying to save the insured assets only. Let's take the pine forest, for example. It is a moot point as to how far close the fire fighting had to be to the pine forest before it could be described as trying to save the pine forest, as opposed to putting out the fire there and then. We will have to negotiate.
The government has employed Price Waterhouse insurance services to act as our experts, so that we have experts on the ground. Certainly, the insurance companies have made sure that they have experts on the ground. The reports and briefings that I have had indicate that, so far, everything is being done in a reasonable spirit of goodwill. We have not yet got to the tug-of-war stage, if we ever do.
In relation to the forests themselves, the policy does cover even the cost of replanting, however, we do not know whether that means replanting with more radiata pines-we have not tested that yet-or replanting with something else. Certainly, some of the insurance cover of our assets allows those assets to be replaced with something different, but nevertheless to the replacement value of the original asset.
I think the policy was as good as it gets. We will have to take into account, let me say, the fact that the pine forests have had visited upon them, now, three catastrophic events: the Christmas fires of nearly a year and a half ago, a wind strike that knocked over parts of the pine forest down near the base of Stromlo and even across into Weston, and then the latest catastrophic fires. The probability of getting insurance again on pine forests in