Prime Minister Scott Morrison is in Queensland today and will reportedly announce a $10 billion reinsurance pool to benefit some 500,000 residential, strata and business insurance customers along the coast north of Rockhampton.

The plans are based on the Queensland Government contributing to the cost of the fund and will require negotiation between the two levels of government. Premier Annastacia Palaszczuk was this morning in a Cabinet meeting and unavailable for comment.

The Commonwealth also wants a separate scheme for strata holders to be continued in a different form.

Local Government Association of Queensland president Mark Jamieson said he was pleased to see the Commonwealth act on the prohibitive cost of insurance.

“Addressing this market failure through a reinsurance pool will mean better access to crucial home and business insurance cover for the more than 61,000 north Queenslanders who up until now have had to go without because the cost was simply too high,” Jamieson said.

“The need for a reinsurance pool was a key element of the LGAQ’s Federal Budget submission, in support of North Queensland Mayors including Townsville Mayor Jenny Hill and Whitsunday Mayor Andrew Willcox, who have been unwavering in their bid to secure Commonwealth intervention on behalf of their communities.”

The issue had been raised in several inquiries, including by the Australian Competition and Consumer Commission and parliamentary committees, where an alternative or complementary recommendation was that governments invest more in disaster mitigation and infrastructure.

While there were expectations that the major parties would each promise more infrastructure investment in the lead-up to the federal election, the need for negotiations with Queensland over a reinsurance pool adds another dimension.

Labor’s spokesman on northern Australia, disaster and emergency management, Senator Murray Watt, this morning took to Twitter to accuse the Coalition of doing nothing on the issue for eight years. He said unless Morrison could say how much premiums would fall, and when, the announcement should be regarded as “more spin & marketing to get him through an election”.

On Queensland local radio, Morrison suggested there had been some speculation that premiums could be slashed by up to 50 per cent. He said the government had more conservative expectations but did not detail them.

“We’re serious about supporting northern Australia as a place to live, a place to work, and for people to raise their families and live their lives,” Morrison said.

“And this is one of the practical things we’ve got to do to ensure that that lifestyle can be maintained.”