Report urges shift to preventative infrastructure spending to combat natural disasters
Clean-up costs from natural disasters will rise to nearly $40 billion a year by 2050, even without the impact of climate change, according to a new report.
The Australian Business Roundtable for Disaster Resilience and Safer Communities assessed the total economic costs of natural disasters in Australia over 10 years to 2016 at $18.2 billion annually, and has forecast this will rise to $39 billion annually by 2050.
A new report prepared for the Roundtable by Deloitte Access Economics has urged governments to shift the funding balance from recovery to resilience.
Governments are currently spending about 10 times more money on cleaning up disasters than on building resilient infrastructure and disaster mitigation projects.
The federal government rejected a Productivity Commission proposal to increase natural disaster mitigation spending at the same time it attempted to pressure state governments to accept a drastic cut to recovery spending.
The Commonwealth invests about $50 million a year on adaptation funding, but spends more than $500 million on average on post-disaster relief and recovery.
The Business Roundtable for Disaster Resilience – established in 2012 and comprising corporations like Westpac and Insurance Australia Group – said spending $250 million a year on preventive infrastructure, such as flood levees, would slash recovery costs in half and generate savings of more than $12 billion by 2050.
It notes however, that funding resilience measures “can be challenging for councils, who are major local asset owners”.
“Co-funding from state and federal governments is often available for recovery after disasters, but is harder to secure for pre-disaster mitigation work.”
The report suggests changes are required beyond funding, particularly in regards to policy settings and frameworks. It further recommends that natural disaster risks should be considered for new land releases, that recognised risks be mitigated early in planning phases, and that roads, bridges and other critical infrastructure be built or repaired to withstand natural disaster risks.