THE government may set up an inquiry to examine whether states should be forced to take out commercial insurance for natural disasters, as it seeks to secure the final vote to pass its $1.8 billion flood levy.
South Australian independent Nick Xenophon, who is now the pivotal figure, wants to relieve the burden that disasters place on the taxpayer.
The government already has sufficient lower house crossbench support for the levy, after concessions last week collectively worth $150 million over the budget period. It has the backing of the Greens and Family First's Steve Fielding in the Senate.
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Treasurer Wayne Swan hinted at an inquiry when he told Channel Ten there was a ''legitimate question'' being raised about what the states had done on insurance. ''It is probably timely for us to evaluate all of those questions, to have a good hard look at them to see what the implications are for the future.''
Senator Xenophon said the ''big picture'' was why the flood levy and spending cuts were needed. ''It's because the government of Queensland failed to take out appropriate insurance,'' he told Channel Nine.
He said that if he supported the levy, ''I want to make sure this is the last time Australian taxpayers have to pay a disaster levy''.
Senator Xenophon said Western Australia, South Australia, Victoria and New South Wales all had forms of natural disaster insurance; Queensland, the territories and Tasmania did not. ''There ought to be a system where the states have a huge disincentive if they don't take out natural disaster insurance … Now is the time to fix this.''
