A right wing editorial I can agree with.

[weemadando]

I would usually find myself laughing heartily at the views espoused by Albrechtson, but in this case I wholly agree.

[quote="Janet "The Screeching Harpy of the Right" Albrechtson"]
Stop bailing out the irresponsible



Janet Albrechtsen Blog | March 01, 2009 | 216 Comments

SOMEONE had to say it. The Insurance Council of Australia has bravely come forward to make the obvious and rational point amidst the emotional brew of the Victorian bushfires. The ICA is advocating mandatory home and contents insurance for those who live in bush-fire prone areas. The critics will say a bunch of insurers would say that, wouldn’t they? They are looking for more business, right?

Of course, they are. But that does not detract from the logic of their central point. Indeed, more of us need to point out the illogical outcomes that flow when we encourage people not to insure their homes. “Why would you pay insurance premiums for 15 years when you know the bloke next door (without insurance) is going to get his home rebuilt to the same standard or higher?” ICA spokesman Paul Giles said. “We have compulsory third-party personal insurance for motor vehicles and you have to wonder why we are not having this discussion.”

It is tempting to dole out taxpayer dollars payouts to those hit by brutal fires. Images of people who have lost their homes are powerful. Yet, it makes no sense to encourage people to look to government for help when things go wrong rather than take responsibility by insuring their homes.

The ICA 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.

The situation is made worse by the unintended consequences of the Fire Services Levy. The levy in NSW and Victoria is imposed on policy-holders and effectively doubles the cost of home insurance. As The Sun-Herald pointed out, the levy accounts for 75 per cent of the total budget for the NSW Fire Brigade and 77 per cent of the Melbourne Metropolitan Fire Brigade and the Victorian County Fire Authority. So we are talking about serious sums of money being funnelled into the fire brigades by those who insure.

The perverse incentives arising from the imposition of this levy are clear enough. By making insurance more expensive, the levy encourages fewer people to take out insurance. The end result is those who act responsibly by insuring – and funding the fire brigades - end up paying for those who behave irresponsibly. Instead of slugging those people who do the right thing, a better solution is to expect each of us to pay for basic services such as fire brigades. Instead of a levy, government should be dipping into consolidated revenue.

The Sun-Herald reported NSW Emergency Services Minister Steve Whan as saying that “it seems heartless and a little too early to be quibbling over money while the fires are still burning and the final extent of this tragedy is still not known. People all over the country have donated generously to the bushfire victims without thinking about whether they were insured.”

Whan is wrong to mistake heartfelt charity for ill-conceived government policy. It is only right that people have donated in droves. But it is wrong for government policy to encourage people to take the path of irresponsibility knowing that others will bail them out. That is not heartless. That is common sense, a commodity often in scarce supply when you entrust governments to spend your money wisely and fairly.
[/quote]

[thejester]

I don't agree with it at all. Dear Janet's attempts to create political capital for her bankrupt ideology under a cloak of 'let's look at this rationally' is disgusting - but even ignoring that, it makes some sweeping assumptions to back up the argument. It utterly fails to acknowledge that what happened on Black Saturday was far in excess of anything ever experienced before. Fair enough, if you live on a farm or on the outskirts of a tiny country town you should be prepared to lose your home (though this raises question of ability given the drought etc, but that's another debate). But if you live in suburbia, or the middle of a relatively large country town? I don't think you can seriously call it 'irresponsible' to not prepare for your entire fucking town to be consumed in a wall of flame, as opposed to an individual property.

[Dominus Atheos]

I'm not sure which political ideology supports free taxdollar givaways to large corporations. Right-wingers should hate it since it's contrary to the free-market, and it doesn't follow any left-wing position I'm aware of. Nationalization would, but that's not what's going on here. I suppose it's the political ideology "Rob from the poor to feed the rich" which (at least in America) is the ideology embraced by both political parties.

[weemadando]

So Jester, you think it's fair that someone who didn't bother to have insurance for their home gets a free rebuild at taxpayer expense while the person who has paid insurance has to go through the whole procedure with their insurance company and hopefully come out the other side with enough funds to rebuild a house that will likely be valued a great deal higher than the insured value due to Australia's borked real estate market?

I don't think either scenario is fair, but by hte same measure I have zero sympathy for those who want to cry poor after failing to insure themselves against such a scenario which, in Australia, is always just a matter of time.

[ray245]

So Jester, you think it's fair that someone who didn't bother to have insurance for their home gets a free rebuild at taxpayer expense while the person who has paid insurance has to go through the whole procedure with their insurance company and hopefully come out the other side with enough funds to rebuild a house that will likely be valued a great deal higher than the insured value due to Australia's borked real estate market?

I don't think either scenario is fair, but by hte same measure I have zero sympathy for those who want to cry poor after failing to insure themselves against such a scenario which, in Australia, is always just a matter of time.

It's not about who deserve it more at the moment, it's about doing things to prevent things from going worse.

[mr friendly guy]

I had a look at some of Janet Albrechtsen's blog, and how do you stand her? Just reading some of the articles makes one want to cringe.

She didn't realise that Larry Flynt asking for a bailout of the porn industry was meant to be a joke? She thought it was actually serious? Good lord.

Any way, back to the topic at hand she does have a point. People have to take some responsibility for their poor planning. Unless you are dirt poor, insurance is generally a good idea because you never know what could happen. Every year I at least hear a report of a home burned down (although not due to arson or bushfires).

Unless you were that wacko priest who God told him there will be a bushfire to punish Victoria for their abortion laws, (but he conveniently didn't tell the rest of the state), chances you wouldn't have predicted the magnitude of this bushfire. However it seems just silly that you couldn't predict your house may be lost of fire and really you should have insurance (unless your financial situation is really crap, then I can understand that).

edit - I would suggest a compromise measure, where the Government bails you out this time, but there are strings attached, such as it becoming compulsory to get home and contents insurance if you still live in certain high risk areas.

[thejester]

So Jester, you think it's fair that someone who didn't bother to have insurance for their home gets a free rebuild at taxpayer expense while the person who has paid insurance has to go through the whole procedure with their insurance company

Wow, it's attack of the buzzwords:

- 'fair': rebuilding peoples lives > fairness.

- 'didn't bother': says who? The article says that roughly a quarter of Australians don't have home and contents insurance, of which roughly a third live in bushfire-affected areas (itself a ridiculously broad term). Given that most areas of Victoria have been in drought for the better part of ~10 years, the idea that these people are loaded but simply didn't bother with insurance because they were too busy buying utes or TVs isn't a given.

- 'taxpayer expense': I'm a taxpayer and I say go for it. Rather that than being given $900 to go buy myself a big TV, or millions on a water pipleline, or whatever other project the government is undertaking. Is there any serious suggestion that the majority of taxpayers object to this use of their money?

and hopefully come out the other side with enough funds to rebuild a house that will likely be valued a great deal higher than the insured value due to Australia's borked real estate market?

I'm not sure how this is relevant. It can be valued as high as it wants (having said that I doubt the real estate bubble is much of a problem in Marysville), as long as people get enough money to rebuild their homes.

I don't think either scenario is fair, but by hte same measure I have zero sympathy for those who want to cry poor after failing to insure themselves against such a scenario which, in Australia, is always just a matter of time.

In what sense was the destruction of towns and the deaths of nearly 200 people in a single afternoon 'a matter of time'?

[ray245]

I had a look at some of Janet Albrechtsen's blog, and how do you stand her? Just reading some of the articles makes one want to cringe.

She didn't realise that Larry Flynt asking for a bailout of the porn industry was meant to be a joke? She thought it was actually serious? Good lord.

Any way, back to the topic at hand she does have a point. People have to take some responsibility for their poor planning. Unless you are dirt poor, insurance is generally a good idea because you never know what could happen. Every year I at least hear a report of a home burned down (although not due to arson or bushfires).

Unless you were that wacko priest who God told him there will be a bushfire to punish Victoria for their abortion laws, (but he conveniently didn't tell the rest of the state), chances you wouldn't have predicted the magnitude of this bushfire. However it seems just silly that you couldn't predict your house may be lost of fire and really you should have insurance (unless your financial situation is really crap, then I can understand that).

edit - I would suggest a compromise measure, where the Government bails you out this time, but there are strings attached, such as it becoming compulsory to get home and contents insurance if you still live in certain high risk areas.

The problem is most of the world is afraid to separating the difference between punishing the industry and punishing those who are responsible for this mess.

The financial industry must stay alive if people are afraid of governments going on a nationalization spree even if the government is punishing those that are responsible for these mess.

I have no problem with bailing out the financial industry, as long as the government realise bailing out a company is different from bailing out a CEO.

[Darth Wong]

rebuilding peoples lives > fairness.

Rebuilding houses is not the same thing as rebuilding lives. Nobody has an intrinsic right to live in a particular house at a particular address. The government has an obligation to keep people from starving to death or dying of exposure, but that means offering shelters and state-subsidized housing for needy people, not becoming a zero-premium home insurer.

'didn't bother': says who? The article says that roughly a quarter of Australians don't have home and contents insurance, of which roughly a third live in bushfire-affected areas (itself a ridiculously broad term). Given that most areas of Victoria have been in drought for the better part of ~10 years, the idea that these people are loaded but simply didn't bother with insurance because they were too busy buying utes or TVs isn't a given.

Why not? They can afford to own homes, but they can't afford insurance? Insurance is part of the cost of a home. If you can't afford the insurance, you should have bought a smaller home or chosen to live in an apartment. Do you have any grasp of what it means to people who work hard and live within their means to see other people being irresponsible and getting effectively paid for it?

Why should anyone buy insurance in these areas if the government will step in anyway? Shouldn't everyone just drop their insurance policies, secure in the knowledge that the government has effectively made itself into a free insurer?

[ray245]

Crap, keep forgetting the difference between the housing sector and the banks. Even then, we have to take into account that people tend to be too dumb when it comes to making a sound economic decision for their own lives.

After all, when given the choice between a new Plasma TV or an insurance, most people will only bother with a physical good.

[Crown]

Why not? They can afford to own homes, but they can't afford insurance? Insurance is part of the cost of a home. If you can't afford the insurance, you should have bought a smaller home or chosen to live in an apartment. Do you have any grasp of what it means to people who work hard and live within their means to see other people being irresponsible and getting effectively paid for it?

Why should anyone buy insurance in these areas if the government will step in anyway? Shouldn't everyone just drop their insurance policies, secure in the knowledge that the government has effectively made itself into a free insurer?

I think it is important to note that this was essentially a state-wide-disaster and it is inconceivable that the government wouldn't rebuild their homes. After all these people do pay land and other local taxes, so if the entire locality is wiped off the map, isn't it reasonable to assume that the rebuilding bill should be picked up by the government?

I guess my stance is one of scale; burned your housed down by accident and didn't have home insurance? Ooops, sucks to be you. Your house and entire community get completely wiped off the face of the Earth through no fault of your own? Insurance or no insurance, you should have your home rebuilt by the government.

[weemadando]

Why not? They can afford to own homes, but they can't afford insurance? Insurance is part of the cost of a home. If you can't afford the insurance, you should have bought a smaller home or chosen to live in an apartment. Do you have any grasp of what it means to people who work hard and live within their means to see other people being irresponsible and getting effectively paid for it?

Why should anyone buy insurance in these areas if the government will step in anyway? Shouldn't everyone just drop their insurance policies, secure in the knowledge that the government has effectively made itself into a free insurer?

I think it is important to note that this was essentially a state-wide-disaster and it is inconceivable that the government wouldn't rebuild their homes. After all these people do pay land and other local taxes, so if the entire locality is wiped off the map, isn't it reasonable to assume that the rebuilding bill should be picked up by the government?

I guess my stance is one of scale; burned your housed down by accident and didn't have home insurance? Ooops, sucks to be you. Your house and entire community get completely wiped off the face of the Earth through no fault of your own? Insurance or no insurance, you should have your home rebuilt by the government.

But then what happens to all the people who HAVE paid insurance? What do they get out of it? They just get to keep their no claim bonus and get their house rebuilt by the gov't too?

It is just particularly annoying to me that we seem to have this complete disregard for personal responsibility in Australia, instead assuming that the government will come along and save us from anything that happens.

And yes - these were firestorms of a huge scale, but the simple fact is that every summer we have fires, some years they are god-awful. And if you live in the bush you really have no goddamn excuse for crying foul when you lose your house and don't have it insured.

I can understand the gov't rebuilding the infrastructure and civic facilities - after all that's their job (and all of those would have been insured), but rebuilding private homes where the owner was too fucking lazy to get it insured? Fuck that.

[Beowulf]

I don't even own my home, and yet I have insurance for the contents of my home.

[weemadando]

I don't even own my home, and yet I have insurance for the contents of my home.

Same, even when I have been at my VERY poorest I always have had insurance. And I make it a point to be insured, because you never know what the fuck might happen. I've had to fork out cash for insurace on contents, for a vehicle, for my business. Because it's what you fucking do. It's a matter of personal responsibility.

[Crown]

But then what happens to all the people who HAVE paid insurance? What do they get out of it? They just get to keep their no claim bonus and get their house rebuilt by the gov't too?

I think they should. At the very least their rates shouldn't go up. Why? Were you expecting me to argue differently

It is just particularly annoying to me that we seem to have this complete disregard for personal responsibility in Australia, instead assuming that the government will come along and save us from anything that happens.

And yes - these were firestorms of a huge scale, but the simple fact is that every summer we have fires, some years they are god-awful. And if you live in the bush you really have no goddamn excuse for crying foul when you lose your house and don't have it insured.

I can understand the gov't rebuilding the infrastructure and civic facilities - after all that's their job (and all of those would have been insured), but rebuilding private homes where the owner was too fucking lazy to get it insured? Fuck that.

I think it is prudent to point out that the author is pulling a bait and switch. She's saying; the government bailing out homeowners who didn't have insurance will lead to people saying you don't need insurance and therefore no one will have any because the government will always be expected to do it.

Lets forget that this is a slippery slope of a demonstrable sharp incline, she's basically saying that the government should never change its rules - ever - because it might lead to an erroneous misconception. Boo-hoo.

This isn't the state rebuilding some bogans homes that got destroyed because little Mick was playing with fireworks, this is quite literally the worst and most unprecedented fires in Australia's history. It is well to argue that if you didn't have theft insurance it would suck to be you to be burgled in this day and age, but there must be a reasonable argument to be made that for an eventuality that you can reasonably expect not to see in your lifetime, then you shouldn't be obliged to go out and get insurance for it.

For lack of a better term; 'Acts of God' are just somethings you would expect the government to pick up the tab for.

[thejester]

Rebuilding houses is not the same thing as rebuilding lives. Nobody has an intrinsic right to live in a particular house at a particular address. The government has an obligation to keep people from starving to death or dying of exposure, but that means offering shelters and state-subsidized housing for needy people, not becoming a zero-premium home insurer.

Why not? They can afford to own homes, but they can't afford insurance? Insurance is part of the cost of a home. If you can't afford the insurance, you should have bought a smaller home or chosen to live in an apartment. Do you have any grasp of what it means to people who work hard and live within their means to see other people being irresponsible and getting effectively paid for it?

I love the way you've utterly stripped this of context and transplanted in generic welfare queen arguments. These people don't live in McMansions and have plasma TVs, FFS - they live in the country, in areas that have often been in drought for the better part of a decade. There are no smaller houses or apartments to move to and their income is almost certainly reduced. They could have owned their house ~20 years and simply had to abandon insurance recently due to tightening of the belt.

Why should anyone buy insurance in these areas if the government will step in anyway? Shouldn't everyone just drop their insurance policies, secure in the knowledge that the government has effectively made itself into a free insurer?

Because apart from 'we're going to rebuild' we have no clue as to what the government will actually do - there's no guarntee you'll get the same house or your contents replaced, etc. And again, what happened was the worst natural fucking disaster in Australia's history, a fire totally without precedent. I would agree with 'personal responsibility' if your house burned down from an electrical fault or a tree fell on your roof...but when entire towns are destroyed in a few hours things change.

[Beowulf]

You can reasonably expect to the possibility of your house burning down. It may not happen to everyone, but it happens often enough that it can be expected. The exact circumstance of the entire neighborhood burning down is probably slightly unprecedented, but it's not significantly different than your house burning down. After all your house did burn down (in this hypothetical).

Hurricanes are acts of god. So are rivers overflowing their banks. We still have flood insurance that you can buy.

[Darth Wong]

I love the way you've utterly stripped this of context and transplanted in generic welfare queen arguments.

Is English your first language, moron? These aren't "generic welfare queen" arguments. I'm not talking about them living in the lap of luxury. I know perfectly well what rural living standards often are; my in-laws lived on a dairy farm on an income of less than $20k. That doesn't eliminate the need to insure one's possessions.

Welfare queen arguments attempt to diminish the social safety net based on a caricature of luxurious welfare lifestyles. That is not even remotely similar to the point I was making, so either you have a reading comprehension problem or you're a liar.

These people don't live in McMansions and have plasma TVs, FFS - they live in the country, in areas that have often been in drought for the better part of a decade. There are no smaller houses or apartments to move to and their income is almost certainly reduced. They could have owned their house ~20 years and simply had to abandon insurance recently due to tightening of the belt.

Then they could have moved. Nobody forced them to live there, and if the economic situation is such that their present locations are untenable, then they should move. The government has a responsibility to keep people from starving or suffering. It does not have a responsibility to help people live wherever they want to live, regardless of whether economic conditions support those decisions.

Because apart from 'we're going to rebuild' we have no clue as to what the government will actually do - there's no guarntee you'll get the same house or your contents replaced, etc. And again, what happened was the worst natural fucking disaster in Australia's history, a fire totally without precedent. I would agree with 'personal responsibility' if your house burned down from an electrical fault or a tree fell on your roof...but when entire towns are destroyed in a few hours things change.

Explain the difference, apart from scale. As far as an individual household goes, it's the same concept: the house burned down. The fact that it happens to a thousand houses rather than one house doesn't change the concept.

[TrailerParkJawa]

These wildfires are no different than a hurricane in Louisiana, earthquake in California, etc. There should be no gov't rebuilding of home at tax payers expense. It removes responsibility of the home owners from their own property. I'm okay with gov't loans to help rebuild or gov't handouts like blankets and food but there should be no bailout at the expense of those who bought insurance or decided to rent.

[Vympel]

I think it is prudent to point out that the author is pulling a bait and switch. She's saying; the government bailing out homeowners who didn't have insurance will lead to people saying you don't need insurance and therefore no one will have any because the government will always be expected to do it.

It's a classic moral hazard argument - one I think has merit. People are more inclined to engage in risky behavior if they're going to get their ass bailed out for it. I really can't imagine why it's ok that these people didn't have insurance for their home.

[CmdrWilkens]

For lack of a better term; 'Acts of God' are just somethings you would expect the government to pick up the tab for.

Which doens't neccessarily bear back on whether or not the government should mandate insurance for private homes. While such legislation would obviously be speculative at this point one can easily point out that no language requiring homeowners to carry property insurance would prevent the government from helping out in the event of a natural disaster.

[Traveller]

It does raise an interesting point, If I want to drive a vehicle, I *have* to buy auto-insurance, its simply not optional. There are of course varrying levels of insuranace, you can get the bare minimum 3rd party Liability, or you can go to town, whatever you can afford. But, if you rent or own a home, homeowners polices are not mandantory. I find this topic interesting, because I litterally cannot count the number of times over the years, the provincial news runs stories about apartment blocks\houses whatever that have burned down, makeing X people homeless BUT, one thing virtually all these news reports have in common, is how practically of them were insured. Based on how easy it is to turn on the local news and hear that exact same thing (I have no insurance of any kind /sniff), I would say she does have a point. People get hit around this province for all kinds of things, fire, flood, Mudslides, you name it, they all end up on the news and I am honestly trying to think of a time the reporter said they had decent coverage(has that been the case sometimes, probabaly-common, hardly). So of course, when these disasters do strike the un-insured, where do they go? Charity then Goverment, this is of course is entirely understandable, if you need help, you seek it where you can, but thats not the point shes getting at is it now. The end result of the un-prepared for even the smallest personal tradgedy, is that ultimately taxpayers end up footing the bill for people who wont take even the most modest of precautions. I have even seen people go so far as to blame there local town, regional district, or whatever gov't body is closest, for not doing enough to prevent the mudslides[or insert natural distaster here] that just destroyed the un-insured home they had built under that unstable bank in the first place-truth. So the problem\mindset is hardly confined to Australia.

In essence, shes discussing the so-called Free-Rider Problem. Also, just because the article offends the left-wing sensibilites of some people, hardly invalidates her point.

[Phantasee]

I think it would be expected of the government to rebuild all the infrastructure that was wiped out, sewer lines, roads, power, all that jazz that is usually done by a developer the first time around. Right up to putting the gas and power to each lot. But rebuilding the houses is a bit much.