The Insurance Council of Australia (ICA) and insurers are calling on the federal government to extend the Disaster Ready Fund's (DRF) funding past the five-year budgeted commitment.
The ICA welcomed the establishment of the DRF's October budget, which will invest up to $200 million annually into disaster mitigation for five years from the next financial year. However, it is now calling for the extension of the funding to a 10-year rolling program as the impact of climate change worsens.
“We don't have to look far in our past to see the impacts of extreme weather and why there is an urgent need for more investment and collaboration in disaster resilience to better protect Australian communities from worsening extreme weather,” said ICA CEO Andrew Hall (pictured above). “Given the long-term challenges of climate change in Australia, investment in disaster resilience will clearly be required well beyond the five years budgeted for Disaster Ready Fund spending.”
The ICA explained that an ongoing DRF will help Australians receive the benefits of resilience and mitigation investment for the coming years and enable governments and communities to plan long-term projects to address skyrocketing insurance premiums.
The representative body calls on the government to index DRF funding to ensure the funding does not fall short in real terms due to rising inflation
“A 10-year indexed program would cost the budget about $2.5 billion over the medium term, $1 billion less than the cost of disaster recovery payments and allowances in 2022 alone,” the ICA said.
In its pre-budget submission, the ICA detailed nine policy areas where insurers want the federal government to prioritise to address rising premiums and reduce extreme weather risk for communities including:
“The Insurance Council is eager to collaborate with the Commonwealth in the budget to develop further positive policies to improve the affordability and availability of insurance in a changing climate,” Mr. Hall said.
Last month, the Royal Automobile Club of Queensland (RACQ) urged the federal government to ensure that disaster resilience funding is spent correctly.
Josh Cooney, general manager of advocacy at RACQ, said the government's decision to increase disaster mitigation funding to $200 million is essential to improving Queensland communities' extreme weather resilience.
“We know Queensland is the country's most vulnerable state when it comes to extreme weather, and we need to ensure investments from this fund are being spent on the right things without being caught up in bureaucracy and red tape,” Mr. Cooney said in a previous statement.
Meanwhile, the National Insurance Brokers Association (NIBA) called on the government to fill gaps in its disaster mitigation strategy, including providing grants to Australian homeowners in disaster-prone areas.