Treasury secretary Steven Kennedy has singled out skyrocketing insurance premiums as a major cost pressure for Australian households.
Asked by Greens senator Nick McKim whether price gouging was a concern, Kennedy said some sectors may be rebuilding after a period of very low margins, but noted that one of the strongest price increases in the consumer price index currently was insurance costs.
Treasury secretary Steven Kennedy in a Senate estimates hearing with Finance Minister Katy Gallagher.Credit: Alex Ellinghausen
“Insurance premiums are increasing very significantly,” he said.
Kennedy said there was also issues around the cost of reinsurance – which is insurance for insurers – as well as the increasing risks of natural disasters, particularly in northern Australia. Those issues all contribute to the cost, he said.
“I just want to draw that one out because that is probably the most significant price increase that we’re seeing in a sector at the moment. And distilling competitive market forces versus basically what the economy has given you as a repricing of risks is not straightforward,” he said.
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Asked again whether some corporations were raising prices over and above increases in their input costs, and where price gouging, Kennedy said some potentially were.
“Of course, it’s possible that some have done that,” he said.
Finance Minister Katy Gallagher said the government was investigating whether there were price gouging issues through Craig Emerson’s review of the grocery code of conduct and the consumer watchdog’s supermarket competition inquiry.
“I’m like everyone else, going around doing my shopping and all of that, when you look at some of the prices, there is sticker shock, right?” she said.