PM's flood works plan is mine, Joyce says - Sydney Morning Herald

AAP

The federal government will spend $100 million over two years to reduce flood risk in the nation's most vulnerable areas and help lower insurance premiums by more than a third.

Prime Minister Julia Gillard says the money includes $17 million for the flood-ravaged communities of Ipswich and Roma in Queensland and $50 million over two years to help pay for works such as raising the level of Sydney's Warragamba Dam.

"This is a new set of measures to assist with disaster resilience and insurance affordability," she told reporters in Ipswich on Thursday.

"We are trying to get away from that cycle of flooding and then insurance premiums skyrocketing and people being priced out of the market."

Overall, the plan will pump $50 million a year into targeted flood and other natural disaster mitigation projects and set up a National Insurance Affordability Council.

The government says insurance premiums could drop by as much as a third, based on experience in areas in NSW and Queensland where flood mitigation works have been completed.

"When governments at all levels fund mitigation we expect insurance policies for householders to go down," Financial Services Minister Bill Shorten said.

The federal government had spent more than $6 billion in Queensland on disaster assistance and other measures since the devastating floods of late 2010 and early 2011.

Ms Gillard said it was time for all the states and territories to make a greater contribution to flood-proofing communities.

"We want to do more, but we also want to see the state governments acquit their responsibilities," she said.

"Given this is extra resources from the federal government in an area that has traditionally been of state government management and concern, I would expect ... (it) ... to be matched by state government money."

The Insurance Council of Australia (ICA) said the past summer had proved mitigation was urgently needed, with the recent floods in Queensland and NSW caused by ex-tropical cyclone Oswald causing insurance losses of more than $661 million.

Meanwhile, the cost of raising the wall at Sydney's Warragamba Dam is estimated to be $500 million, and the federal funding is contingent on state government backing for the project.

If it were completed, more than 50,000 homes in western Sydney could be removed from a flood-risk zone.

But NSW Greens MP John Kaye said raising the dam wall would be a band-aid solution.

"No dam can ever be made 100 per cent flood-proof," he said in a statement on Thursday.

The NSW Labor opposition has backed the federal government's plan.

"If it's going to decrease the cost of their insurance premiums, where it is costing up to eight thousand dollars a year, then I think families will welcome it," water spokesman Walt Secord told ABC radio.

The NSW government is yet to comment.

In the past decade, floods have caused nearly $4.5 billion in insured losses across Australia, and many communities have been flooded two or three times in several years.