Home insurance premiums could be slashed by as much as 70 per cent with the help of a $100 million fund to alleviate flooding in high-risk areas, according to the Federal Government.
Prime Minister Julia Gillard says the money will be used for flood mitigation projects around the country, with $50 million of that to be spent raising the level of Sydney's Warragamba Dam.
A further $10 million will be spent around Ipswich, west of Brisbane, and $7 million will go towards raising the level of the flood levee around Roma in southern Queensland.
"This Government is moving on mitigation with the promise from the insurance industry that when governments at all levels fund mitigation, we expect insurance policies for householders to go down," Financial Services Minister Bill Shorten told reporters in Ipswich.
"The insurance industry's indicated that in a place such as Roma ... home and content policies should and could go down by as much as 70 per cent."
Some home insurance premiums have sky-rocketed in recent years, after devastating floods in Queensland and New South Wales.
The Government last year announced the introduction of a standard definition of "flood" in insurance contracts, because many people discovered they were not covered despite thinking they were.
Ms Gillard says the $100 million investment in flood mitigation projects will help put downward pressure on insurance premiums, although some projects, like raising the level of the Warragamba Dam, will require state government contributions.
"The New South Wales Government has over many years talked about, but done nothing to deal with, flood resilience in that area and so we are putting $50 million on the table to help get it done," she said.
The NSW Government is yet to comment on the plan because it says it has not seen any details.
Infrastructure NSW, which was given the task of coming up with funding priorities on behalf of the Government, last year suggested the dam project should be considered.
"Infrastructure NSW recommends the NSW government review all the major flood mitigation options available, including raising the Warragamba Dam wall, to significantly reduce the potential economic and social impact of flooding in the Hawkesbury Nepean Valley," it said.
When asked about what action the State Government would take in response to the report in January, NSW Premier Barry O'Farrell said: "We're doing the detailed work necessary to follow up on the Infrastructure NSW proposals so that we can make the right decisions".
Local community projects
The remainder of the $100 million package will be available for other flood mitigation projects put forward by local communities.
Ms Gillard has already indicated she would be willing to consider proposals to help the Queensland city of Gympie, which is currently dealing with its fourth major flood in 12 months.
The Federal Government has also announced an extra $85 million to assist flood-affected regions of Queensland and to help protect against future damage.
Just over half the money will go towards a new support package designed to provide specialised assistance, including mental health services, paying casual workers to remove debris, and providing support to farmers.
The remaining $40 million will be used to set up a "betterment fund" to help rebuild local council roads and infrastructure.
Ms Gillard has challenged the Queensland Government to match the contribution.
"We are hoping this fund can help us end some of the cycle where a local road is washed away or a local community facility is hit, money is put into repairing it [and] rebuilding it, and then floods come 12 months later and it is damaged or flooded again," Ms Gillard said.
"We want local government to be able to have the extra resources so that when they rebuild a section of road or they put a roundabout back or they put a community facility back, they can put it there at a standard that it won't be flooded again."
Nationals Senator Barnaby Joyce has welcomed the extra funding for dams, describing Ms Gillard's announcement as a "Damascus" moment.
"I am impressed that within weeks of Labor ridiculing the Coalition's dams policy, they have started adopting it," Senator Joyce said, .
"It is disappointing, however, that the Government continues to make announcements without talking to state governments first.
"The Queensland State Government was willing to put $100 million towards a betterment fund if the Commonwealth matched it. Today, the Commonwealth has announced just $40 million towards such a fund."
© ABC 2013
16:54 EST The Federal Government has brought forward the start date for new farm tax breaks, effective immediately.