The Insurance Council of Australia (ICA) has expressed its frustration at the lack of preventative measures the country’s government has adopted to tackle the economical and societal impacts of natural catastrophe events.
In the aftermath of severe flooding in the Townsville and Queensland areas of Australia, which resulted in billions of dollars of economic losses, the ICA has highlighted a lack of funding targeting prevention rather than response.
The most recent ICA industry loss estimate for the flooding event hit AU$1.04 billion (US$737.4 million), an increase of AU$434 million from the previous month.
The ICA notes a pledge from the Government of $3.9 billion for the natural disaster Emergency Response Fund, $322 million to help flood-affected citizens in North Queensland, and a further $8 billion to be spent on infrastructure. Furthermore, up to $300 million in grants has been promised to assist flood-hit farmers’ rebuilding, the replacement of livestock and the replanting of crops.
While these funds will be welcomed, the ICA highlights that, “None of this money appears to be directed towards preventing natural disasters or making homes and businesses more capable of withstanding the impact of floods or cyclones.”
Being able to leverage readily-available funds post-disaster is vital and certainly essential to the rebuilding of individuals, communities and economies. However, research has shown that money spent on prevention is far more sustainable, while potentially reducing the insured and uninsured loss when disaster inevitably strikes.
“The Coalition has ignored the Productivity Commission, which recommended the Commonwealth invest at least $200 million a year in mitigation and resilience projects (matched by state and territory governments). At present about 97 per cent of disaster funding goes to clean-up and recovery, and only 3 per cent on prevention,” says the ICA.
Ultimately, the ICA feels that a large share of the Emergency Response Fund should have been directed to a program of investments in “nation-building infrastructure projects” that look to solve the problem of natural disasters rather than consistently rebuilding both people and communities.
“The failure of governments to treat flood mitigation and resilience projects as critical investments in the economic future of natural disaster-prone communities is short sighted and disappointing.
“The ICA is committed to working with the Federal Government, along with state and local governments, to enhance community resilience and disaster prevention,” concludes the ICA.
