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Connexus : Issue 36
Cyclone Yasi in Queensland and flooding in Victoria," he says. "We aim to deal with each person's needs individually over the long term and we keep them on the radar. We don't see it as an opportunity to advertise our services." Weather put mecu service centres in Brisbane, Townsville and Kerang in Victoria out of action for short periods. Many staff had to move furniture and other possessions to higher ground. All staff were offered up to 10 days of paid leave to help them deal with their problems. At CUA, staff were quick to reopen branches after the Queensland floods and Cyclone Yasi. "It was magnificent the way our people found their way to work even when roads were closed and public transport wasn't operating," says Whitehead. "We had all but one Brisbane branch open the day after the floods. In Emerald, which suffered terribly over the summer, we had to relocate a branch, and staff were operating out of temporary premises within a couple of days." In Toowoomba and the Darling Downs, heartland of MARC MCCORMACK connexus www.abacus.org.au 42 Counting the costs Credit union and building society phones rang hot across the nation as members sought comfort and reassurance in the immediate aftermath of the wild weather. However, as hardship calls decreased, so did estimates of the likely costs to the sector. "We're a strong, profitable business and we take appropriate steps to ensure that members and the credit union are appropriately protected in situations like this," says mecu's Rowan Dowland. Chris Whitehead at CUA expects flood costs to run into six figures, but that won't make a significant impact on the bottom line. "We're not seeing big credit issues." Despite the severity of the 'inland tsunami' created by Queensland's floods, Heritage Building Society also expects the bottom-line impact to be relatively small. CEO John Minz estimates that donations, fee waivers and other costs have so far amounted to around $300,000 (including $100,000 to the premier's appeal and $15,000 donations to local flood appeals in Toowoomba and Grantham). "Of the 35,000 properties on our books, 43 were affected by flood or stormwater. In 20 of those cases, there was water but no damage," says Minz. "We initially received about 200 applications for hardship assistance, but within weeks a lot of those people had overcome their problems. They were back at work or had resolved insurance issues." He expects the broader economic impact on Queensland to be relatively short term, with reconstruction kick- starting the non-mining sector and the mines getting back to business. "Other sectors such as retail are likely to hurt for longer, and a fear factor will affect property sales, at least for the short term, in flood-affected areas," he says. The floods have emphasised the problem of underinsurance, says Dowland. "There's a conversation going on in the banking sector about what responsibility organisations have to lend on property that can't be insured." No mecu member who had a loan to finance property which was destroyed in the 2009 Victorian bushfires has had to carry the burden of any unwanted ongoing debt, he says. "We had exposure to loans worth several million dollars on property that was damaged or destroyed, and we were determined that all members who were adversely affected would be able to get on with their lives as quickly as possible." He expects a similar situation in Queensland after the floods. Whitehead says natural disasters can be life-changing for people, especially if insurance doesn't fully cover their lost property. He also says the issue of underinsurance needs to be addressed. "CUA was fortunate that very few damaged assets on our books were underinsured. However, if people do need to redraw for repairs, the loan will be based on the original valuation of the property, or an increase in value if that has occurred. Not on any decrease since the original agreement." "...a fear factor will affect property sales, at least for the short term..."