EXPLANATORY STATEMENT
Issued by authority of the Assistant Treasurer and Minister for Financial Services
Terrorism and Cyclone Insurance Act 2003
Terrorism and Cyclone Insurance (Declared Terrorist Incident—Perth CBD) Declaration 2026
The Terrorism and Cyclone Insurance Act 2003 (the Act) establishes the framework for the Australian Government’s terrorism reinsurance scheme. Where the Minister makes a declaration that an incident is a terrorist incident for the purposes of the Act, that declaration renders terrorism exclusion clauses in all eligible insurance contracts of no effect.
The purpose of the Terrorism and Cyclone Insurance (Declared Terrorist Incident—Perth CBD) Declaration 2026 (the Instrument) is to declare a terrorist incident for the purposes of the Act. Section 6 of the Act provides that if, after consulting the Minister administering the Australian Security Intelligence Organisation Act 1979, the Minister is satisfied that a terrorist act has occurred in Australia, or two or more related terrorist acts have occurred in Australia, the Minister must declare that the act constitutes, or the acts together constitute, a terrorist incident for the purposes of the Act. The term ‘terrorist act’ is defined by reference to section 3 of the Crimes Act 1914 and section 100.1 of the Criminal Code Act 1995.
The Act requires the Minister to consult the Minister administering the Australian Security Intelligence Organisation Act 1979 before making a declaration. The Minister consulted the Minister for Home Affairs on 10 February 2026. Targeted consultation was also undertaken with the Attorney-General’s Department and the Department of Home Affairs.
Following consultation, the Minister is satisfied that the that the attempted bombing of a crowd of people which occurred in the suburb of Perth, Western Australia, on 26 January 2026, is a terrorist act.
Declaration of the terrorist incident is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Instrument is not subject to disallowance or sunsetting (see item 31 of the table at section 10 and item 63 of the table at section 12 of the Legislation (Exemptions and Other Matters) Regulations 2015). It is appropriate that the Instrument be exempt from disallowance and sunsetting as it provides impacted persons and insurance providers with certainty and ensures business continuity. The Instrument will be registered on the Federal Register of Legislation to ensure appropriate transparency.
The Instrument, once registered on the Federal Register of Legislation, cannot be revoked. This is to ensure policyholders have certainty on whether eligible claims can be paid out.
The Instrument commences the day after it is registered.
Details of the Instrument are set out in Attachment A.
A statement of Compatibility with Human Rights is at Attachment B.
ATTACHMENT A
Details of the Terrorism and Cyclone Insurance (Declared Terrorist Incident—Perth CBD) Declaration 2026
Section 1 – Name
This section provides that the name of the instrument is the Terrorism and Cyclone Insurance (Declared Terrorist Incident—Perth CBD) Declaration 2026 (the Instrument).
Section 2 – Commencement
This section provides that the Instrument commences on the day after the Instrument is registered on the Federal Register of Legislation.
Section 3 – Authority
The Instrument is made under the Terrorism and Cyclone Insurance Act 2003 (the Act).
Section 4 – Definitions
This section provides that the definition of the Act means the Terrorism and Cyclone Insurance Act 2003.
To assist readers, an explanatory note in this section alerts readers that expressions have the same meaning in the Instrument as in the Act as in force from time to time, in accordance with paragraph 13(1)(b) of the Legislation Act 2003.
Section 5 – Declaration of terrorist incident
This section provides that the attempted bombing of a crowd of people which occurred in the suburb of Perth, Western Australia, on 26 January 2026, is a terrorist act and constitutes a declared terrorist incident.
For the purposes of the Act, this declaration renders terrorism exclusion clauses in all eligible insurance contracts to have no effect.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Terrorism and Cyclone Insurance (Declared Terrorist Incident—Perth CBD) Declaration 2026
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Terrorism and Cyclone Insurance (Declared Terrorist Incident – Perth CBD) Declaration 2026 (the Instrument) declares a terrorist incident for the purposes of the Terrorism and Cyclone Insurance Act 2003 (the Act).
The Act establishes the framework for the Australian Government’s terrorism reinsurance scheme. Where the Minister makes a declaration that an incident is a terrorist incident for the purposes of the Act, that declaration renders terrorism exclusion clauses in all eligible insurance contracts of no effect.
Section 6 of the Act provides that if, after consulting the Minister for Home Affairs as the Minister administering the Australian Security Intelligence Organisation Act 1979, the Minister is satisfied that a terrorist act has occurred in Australia or two or more related terrorist acts have occurred in Australia, the Minister must declare that the act constitutes, or the acts together constitute, a terrorist incident for the purposes of the Act. The term ‘terrorist act’ is defined by reference to section 100.1 of the Criminal Code Act 1995.
After careful consideration, the Minister is satisfied that the Perth incident that occurred on 26 January 2026 is a terrorist act. This Instrument therefore declares the terrorist incident and is declaratory in nature.
Human rights implications
This Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Instrument is compatible with human rights as it does not raise any human rights issues.