Aussie disaster costs to hit $33bn per year

Aussie disaster costs to hit $33bn per year | Insurance Business

Aussie disaster costs to hit $33bn per year
The total annual costs related to natural disasters will hit highs of $33 billion by 2050, according to the Australian Business Roundtable for Disaster Resilience & Safer Communities.

The Roundtable has released two new reports, entitled The Economic Cost of the Social Impact of natural Disasters and Building Resilient Infrastructure, which deliver the first economic analysis of the social impact of natural disasters.

Key findings on the economic impact of natural disasters show that the true cost of a disaster is 50% higher than previously estimated when social costs are included as costs are expected to sky-rocket from $9 billion in 2015 to $33 billion per year by 2050.

Speaking on behalf of the Roundtable, IAG managing director and CEO, Peter Harmer said that the reports demonstrate the importance of resilience planning for communities across the country.

“The reports show the long-term cost of the social impact of natural disasters on our communities and economy, and the benefits of embedding resilience into planning decisions for critical infrastructure,” Harmer said.

“We need to do more to help our communities prepare for and recover from disasters. Sadly the devastation of bushfires, flood and earthquakes on our communities can last for years, if not decades.”

The report calls for a collaborative approach involving government, businesses, not-for-profits and the community to address medium to long-term costs and impacts of disasters and calls for further investment in community resilience programs across the country.

The infrastructure report found that more than $450 million was spent by Australian governments each financial year on restoring essential public infrastructure following extreme weather events between 2002-2 and 2010-11.

Between 2015 and 2050 it is expected that $17 billion, in net present value terms, will be spent on direct replacements of essential infrastructure following natural disasters as total infrastructure spending in Australia is projected to reach approximately $1.1 trillion by 2050.

Fellow Roundtable member and director Australian Red Cross director of Australian Services, Noel Clement said that the first-of-its-kind analysis of natural disasters is an important step for the country.
“This report is the first time that analysis into the economic cost of the social impacts of natural disasters has been conducted, filling a critical gap in the research on the medium and long-term impact of disasters on our communities,” Clement said.
Deloitte’s modelling showed that last year’s spate of natural disasters left a damage bill of more than $9 billion, which was about 0.6% of our Gross Domestic Product (GDP), and this is expected to double by 2030.”
“Governments, business and communities need to work together to address the medium and long-term social impacts of natural disasters through further investment and research into community resilience programs.”