ICA welcomes federal budget's extreme weather measures

Significant package to help build climate resilience

ICA welcomes federal budget's extreme weather measures

Insurance News

By Roxanne Libatique

With Australia facing extreme weather events more often, the Insurance Council of Australia (ICA) has welcomed the federal government's updated budget for extreme weather resilience.

The ICA said the federal government's revised 2022-23 budget, delivered by Treasurer Jim Chalmers, has laid the foundations for a “significant and bold new start” to governments' approach to improving community and household resilience to worsening extreme weather.

“The Insurance Council welcomes the federal government's budget announcement, which is a historic shift in the right direction to better protect homes and communities from the impacts of extreme weather,” said ICA CEO Andrew Hall. “The Insurance Council has been advocating for just such an approach for some time, and the fact that over the past three years insurers have paid out more than $8 billion in flood claims alone makes this issue and the government's response even more urgent.”

The budget includes a $22.6 million package of measures such as:

  • Creating the Hazards Insurance Partnership to create a forum for ongoing collaboration and engagement among insurers, governments, and other stakeholders to reduce extreme weather risk;
  • Creating a national dataset on insurance affordability, underinsurance, and non-insurance issues to help with policy decision-making;
  • Creating a mitigation solutions repository to hold proven and reliable mitigation measures that can be deployed as appropriate to reduce risks associated with different perils; and
  • Scoping work to identify opportunities for public-private partnerships that reduce risk and put downward pressure on insurance premiums.

The package also aims to develop standard insurance definitions for key natural hazards.

The latest budget formalises the Albanese government's commitment of up to $1 billion over five years to invest in measures to better protect homes and communities from extreme weather through the previously announced Disaster Ready Fund.

“The government has taken this issue seriously since before coming to office, and the prime minister, treasurer, and ministers Stephen Jones and Murray Watt are to be congratulated for delivering on this important policy agenda,” Hall said. “Given the impacts of worsening extreme weather that are being felt all over the country, the community expects industry, governments, and stakeholders to work together.”

The Actuaries Institute has also welcomed the announcement, particularly the climate change measures that underpin net-zero commitment and increased resilience from extreme weather.

“Standout features we commend in this budget are the further strengthening of commitment to address climate change to improve resilience, support for greater access to housing, and setting the stage for the move to well-being budgets in future,” said Actuaries Institute president Annette King.

“While possible reassessment of tax cuts has been deferred, overall, the budget has a commitment to fairness and equity that are guiding principles for the Institute when we assess major public policy developments,” she continued. “It is especially pleasing to see the broadening of focus beyond economic and fiscal outcomes to also consider outcomes in housing, education, social programs, the environment, and health and disability.”

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