Reinsurance News

Need for mitigation spending highlighted after NSW wildfires

16th February 2017 - Author: Staff Writer

The Insurance Council of Australia (ICA) has highlighted the need for mitigation against natural disasters as New South Wales (NSW) continues to battle severe wildfires and last December heavy rainfall sparked flash floods, in what was described as a once-in-a-half-century weather event.

The ICA said “it’s important to recognise that prevention is better than cure when it comes to disasters,” urging the Federal Government to increase protection spending to AU$200 million (US$153mn) a year.

ICA Chief Executive Officer (CEO), Rob Whelan, stressed insurers’ concerns over a striking imbalance between government funding to prevent or minimise disasters, and the amount spent on recovering from their aftermath.

“Lifting federal mitigation spending to $200 million a year, matched by the states, will save significantly greater sums over time by reducing the need to repeatedly rebuild communities after disasters hit.

“It will also spare many vulnerable communities the distress of seeing homes, business and other treasured possessions destroyed, and improve their long-term viability,” Whelan said.

Though last May’s budget saw federal funding for the National Partnership on Natural Disaster Resilience rise from AU$13.4 million to AU$52.2 million in 2016-17, Whelan said recent catastrophe’s have shown that more needed to be done; “In June last year, Prime Minister Malcolm Turnbull stood on the rebuilt levee system that shielded Launceston from severe flooding, and noted the need for a greater focus on natural disaster mitigation.

“Yet less than six months later, the government announced it would not boost mitigation funding to the level recommended by the Productivity Commission.

“The Productivity Commission found funding for reconstruction and recovery consumed 97 per cent of disaster funding in Australia, compared with only 3 per cent that went towards mitigation and community resilience measures. With predictions that the annual cost of natural disasters will rise from $9 billion today to $33 billion by 2050, starting to reverse this funding approach will save lives, property and money,” said Whelan.

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