Poll pressures Politicians seeking election in the wake of devastating natural catastrophes may finally be heeding calls for resilience spending By Wendy Pugh
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fter years of insurers beating the drum, disaster resilience has become an electoral issue as voters prepare to go to the polls in May following a Federal Government term virtually bookended by two of the nation’s worst natural catastrophes. Insurance affordability and resilience was particularly on the radar in northern Australia, before the recent Queensland and New South Wales floods. Prime Minister Scott Morrison announced a cyclone reinsurance pool last May while visiting the region, as well as $600 million for mitigation under a six-year Preparing Australia Program. Labor upped the ante in January, committing to spend up to $200 million a year on prevention and resilience, revamping the Emergency Response Fund and creating a Disaster Ready Fund. Insurers have become even more vocal on resilience this year as bushfires, hailstorms and floods and the expected impacts of a changing climate have given the issue traction. The Insurance Council of Australia (ICA) released its pre-election policy platform in February, titled Building a More Resilient Australia. The policies include a call for federal funding of at least $200 million a year over the next five years, matched by states and territories for a total $2 billion commitment. The document notes “welcome
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investments” including the $600 million program announced by Mr Morrison and $40 million to make strata buildings more resilient, but says more is required. “In an election year our simple message is this: in the face of worsening extreme weather the next Australian Government must boost investment in stronger homes and the local infrastructure that make communities more resilient,” Chief Executive Andrew Hall says. “This means subsidies to improve the resilience of the nation’s homes and businesses to cyclone, flood and bushfire, as well as projects that protect the community, like levees, floodways and prescribed burning.” Insurers have paid out more than $11 billion for natural disaster claims since late 2019 and the cost of the recent floods is still climbing. The total includes $2.3 billion for the 2019/20 Black Summer bushfires, $1.1 billion for the Halloween hailstorms and around $760 million for storms in Victoria and South Australia late last year. Shortly after the ICA released its policy document, torrential rainfall began in Queensland and NSW, triggering the flooding catastrophe. Claims had reached an estimated $2.4 billion by the start of this month. The Federal Government’s final budget before the election, delivered on March 29 against the floods backdrop, highlights immediate responses, while releasing an
additional $150 million for recovery and post-disaster resilience measures from the Emergency Relief Fund for 2022-23, targeted at the hard-hit regions. Other natural peril preparation measures are also included. Mr Hall says spending on flood-affected regions is welcome, but dozens of communities in Australia remain exposed to perils like cyclones and require similar assistance to “uplift their mitigation”. The Productivity Commission says 97% of disaster funding is spent after a catastrophe and just 3% spent on measures beforehand. “In the lead-up to the election in coming weeks it is incumbent upon the Government to not only assist with recovery, but announce further investments to better protect communities from the impacts of extreme weather,” Mr Hall says. Labor Party Assistant Financial Services spokesman Matt Thistlethwaite tells Insurance News the party is targeting emissions reduction and resilience measures to address climate change and extreme weather impacts. “We see it as a problem that needs a solution, and we look forward to working with the insurance industry to deliver that solution by reducing Australia’s emissions and protecting communities and households through mitigation,” he says. Projects including flood levees, sea walls, cyclone shelters and evacuation centres, supported by a Disaster Ready Fund,
