I'm a little late in commenting on this one, but it is a topic that deserves consideration nonetheless. In the wake of the tragic bushfires - although we shouldn't lose sight of the fac
I’m a little late in commenting on this one, but it is a topic that deserves consideration nonetheless. In the wake of the tragic bushfires – although we shouldn’t lose sight of the fact that the threat of further damage and loss of life remains – some commentators have discussed issues about the equity of giving assistance to uninsured householders. For instance, Piers Akerman and the Insiders panel discussed it on Sunday.
Janet Albrechtsen also made it the topic of her weekend column, as she laid out an argument for compulsory home insurance. The crux of her argument is:
The ICA [Insurance Council of Australia] says that 24.5 per cent of Victorians do not have home and contents insurance – up to 30 per cent in the areas affected by bushfires. That figure will only rise if people work out there is no point insuring if government will step in and save them. It may be an irresponsible decision not to insure but it is an entirely rational decisions if you know you don’t need to insure. And the money to bail out those people has to come from somewhere. Each of us will end up paying for the irresponsible decisions made by others.
So, a lot of this commotion seems to be driven by those ICA numbers – that 24.5% of Victorians do not have home and contents insurance. It makes it sound as if one in four of the Victorians left without homes could be sticking their hand out for a new home and belongings – relying on either government (i.e., taxpayer-funded) support or the proceeds of bushfire fundraising.
But is that number a valid indicator of how many uninsured people will want assistance? The report on that ICA study (which was based on survey data from Roy Morgan Research) is available here. Looking through the detail of it reveals a few things that should be considered caveats about that 24.5% figure. Among those caveats is the following:
… some survey respondents might be expected to state they do not have building insurance even if their building was insured but the cover was obtained by the another party (e.g. partner, spouse or parent) … The key implication of this issue is that it is difficult to use the Roy Morgan Research data to estimate the total number of non-insured or the rate of non-insurance. [pp. 9-10]
In other words, the researchers noted that the data set had some significant limitations for estimating uninsured rates. The report explained that some steps were taken in analysing the data to try to correct for these limitations, but the base estimate of uninsured rates from this data set appear to be higher than in other research.
Another issue is that the rate being reported is for those who do not have building and contents insurance; the rate of those who do not have building insurance would be considerably lower. Although that exact figure is not reported for Victoria, Figure 22 in the report suggests it might be between 10-12% – but bear in mind that this is the number of survey respondents not personally covered, and likely an overestimate of the uninsured households. By comparison, other studies cited in the report found that the rate of households not covered by building insurance is closer to 4%. Thus, the number of people needing their home to be rebuilt without an insurance policy to cover the costs – the main issue in many of the pieces written about this problem – looks to be much lower than the 24.5% figure suggests.
Finally, the report indicates that those who are most likely to be uninsured are the people who have valuable assets to insure but do not readily have the funds to do so (e.g., retirees who have mortgages). I suspect that imposing compulsory insurance on these groups might be cast as the form of tough love Albrechtsen endorsed in her “compassionate conservatism” column. It’s going to be a considerable financial stressor for them now – but if their house is burned to the ground, they should be thankful for it.
But it suggests that developing the argument based on an inflated estimate of the uninsured rate, and casting the people who are uninsured as “irresponsible”, masks the underlying issue – that there are groups within the population who are much more exposed to risk because they may possess the assets, but cannot find a way to cover the costs of insuring those assets. That is something worth discussing, and it seems to provide an important reason for supporting the ICA’s call to include insurance issues in the Royal Commission into the bushfires. But it is a different issue than the one that the single, flawed number which was typically reported led the media to discuss.
(Thanks to joe2, and an anonymous tipster who noted this segment on ABC Melbourne 774 with Jon Faine)
Janet Albrechtsen has taken an e-mail exchange with playwright David Williamson as the basis for her most recent column. Responding to Williamson’s claim that “conservatives lack compassion”, Janet argues that conservative policies do demonstrate compassion but that conservatives do not do a good job of marketing their compassionate credentials. Unfortunately some of the evidence and argument she draws on to back up her argument are rather shaky.
Janet is one of the few pundits who has had much to say about John Howard’s recent newspaper columns in the SMH and The Australian, which were based on the his lecture at the Menzies Research Centre [PDF transcript]. Albrechtsen proposes that “Howard made a compelling case” that conservative policies help the greatest number of people and provide a safety net for the underprivileged.
Albrechtsen points, in particular, to the Howard Government’s “Work for the Dole” program as one of the substantial reforms that provided the best long-term outcomes and demonstrated the conservative approach to compassion. This ignores the fact that while introducing their “mutual obligation” scheme, the Howard Government also dismantled the Working Nation programs the had been initiated in 1994 to provide training and employment to long-term unemployed. The Keating Government had already adopted the notion of a “job compact”; it can be argued the distinct approach of the conservative government was to reduce the resources being assigned to strategic training initiatives.
Albrechtsen’s reliance on the Howard Government’s record of compassionate reform is also undermined by some obvious cases where there was a distinct lack of compassion: WorkChoices, the removal of unfair dismissal protections, and the Pacific Solution, for starters. But Jason Whittaker makes a broader point about the compassion embodied in many conservative policies – it is conditional and exclusive. The Howard Government’s form of compassion was extended preferentially to those who met their criteria for being appropriate Australians – so, middle-class families were recipients of far greater rewards from the government than same-sex couples, for instance (or aged pensioners, as Ken Lovell notes).
Albrechtsen also undermines her argument by drawing false equivalence between conservative and progressive policies. For instance, she suggests that:
[T]he Australian Human Rights Commission’s report has exposed that under the Rudd Government children are still being held indefinitely in our detention centres. Yet the silence from activists has exposed previous calls for compassion from an uncaring Howard government as bogus, politically motivated stunts. The new-found silence suggests they do not care much about detained migrants, at least not enough to protest against a Labor government.
The Rudd Government announced that from July 2008 children would not be held in immigration detention. The AHRC’s report certainly does not give the new government a clean bill of health on its treatment of children – however, it does note that children are no longer held in immigration detention centres. The concerns the report raises involve several cases in which they found children had been housed – usually, it seems, for a relatively short time – in immigration residential centres and transition accommodation. While this might mean that the Rudd Government’s record is not spotless on children in detention, it is disingenuous to suggest that we should be just as outraged as when it was government policy to hold children in detention centres for what, in many cases, turned out to be a period of years.
Albrechtsen continues her argument by proposing that conservatives engage filters that refine our compassion and direct it to rational and appropriate ends. For instance, she dismisses concern about David Hicks’s treatment as fashion – others, such as myself, would argue that it involved respect for the rule of law and fundamental human rights. She shows no insight that there are any policies of the Howard Government or conservatives in general that could be criticised as lacking compassion; instead, Janet’s final solution is that conservatives need to do a better job of recognising and selling their compassion.
Perhaps that would be easier if the evidence for it wasn’t so inconsistent and contradicted.