The Challenge

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Overview    

The challenge that brought six organisations together to form the Australian Business Roundtable on Disaster Resilience and Safer Communities is:

  • The frequency and severity of natural disasters and their associated costs to Australians’ lives, livelihoods and property are increasing.
  • Our nation’s public investment in building community resilience represents around only 3% of what it spends on post-disaster recovery and reconstruction.
  • To truly build the resilience of our communities and reduce the threat of significant economic and social dislocation created by natural disasters, greater investment and a broader shared response is required.

Meeting this challenge requires navigation of many complex, often opposing social, political and economic factors. 

It requires leadership at all levels of governments, business and community and a collective will to achieve lasting results for the nation.

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The increasing cost of natural hazards

The natural disasters of the past five years have caused billions of dollars worth of damage to private property and public infrastructure.

Among the unprecedented number of events, the 2010-11 Queensland floods and Cyclone Yasi led to more than $4 billion in reconstruction and recovery costs to the Australian Government and insurers paid more than $3.7 billion to policyholders.

Even before the events of the last five years Australia’s annual average insured losses due to natural hazards has been estimated at around $1 billion (Ryan Crompton and John McAneney; The Australian Journal of Emergency Management, Vol. 23 No. 4, November 2008.)

In addition to the economic costs, the social costs to the Australian community are high.  Between 1980 and 2010, natural hazards have caused the deaths of around 959 people in Australia with many more injured. Affected communities often feel the impact of economic disruption and social dislocation for years after events.

The challenge is not new to Australia

As early as 1819, Governor Lachlan Macquarie issued a general order for settlers to avoid developing in areas that were known to be flood prone. This shows just how long governments and communities have been grappling with this challenge. His general order of Wednesday 15 March 1819 reads:

“When the too fatal consequences of years has shown the Sufferers the inevitable consequences of their wilful and wayward habit of placing their Residences and Stock Yards within the reach of floods and whilst it must be still in their Remembrance, that many of the deplorable losses would have been in great Measure arrested had the Settlers paid due consideration of their own interests, and to the frequent Admonitions to remain within the flood marks of the townships assigned to them on the high lands. Those, who notwithstanding shall perversely neglect the present admonition and Exhortation to their own Benefit, must be considered wilfully and obstinately blind to their own interests and undeserving any future Indulgences.” (Macquarie 1819)

What’s driving the increased cost?

There are a number of factors contributing to the increased economic and community impact of natural disasters.

Population density is increasing  generally, with concentrations emerging in areas prone to natural disasters, particularly coastal areas.  Around 80% of Australia’s population lives within 50km of the coast.  One quarter of Australia’s population growth is within 3km of the coastline.  These population centres are exposed to some of the most damaging extreme weather events, such as tropical cyclones, storm surges, hailstorms and coastal river flooding.  More property in these areas means a higher cost of damage from natural disasters.

A lack of national, comprehensive data and mapping has undermined understanding of natural hazard risk by governments and the community.  This has contributed to poor planning decisions leading to property development in areas of significant risk.

Inappropriate building design and construction has been widespread, leading to a built environment susceptible to damage.  Local, state and national governments have not invested adequately in strategic disaster mitigation initiatives and infrastructure.

Potential changes in climate is likely to lead to further increases in the frequency and severity of weather related losses in Australia.

Without appropriate risk assessment, mitigation and adaptation measures to offset these uncertainties, the cost of insurance is very likely to rise, with some locations becoming too expensive for consumers to bear the cost or causing some insurers to withdraw.  As this occurs, governments will be called upon to cover the cost of repair and reconstruction currently met by insurers.

Investing now to reduce the future cost of recovery

Our national perspective on natural hazards has historically focused on responding and rebuilding after an event rather than preparation and mitigation.

There is a need for greater emphasis on community adaptation to extreme weather events, including stronger building codes to protect structures from extreme weather hazards; more risk-appropriate use of land and greater emphasis on hazard mitigation infrastructure.

To make our communities stronger and better able to withstand catastrophes, investment in disaster mitigation and resilience strategies must increase.  The $27 million per annum allocated for mitigation works under the National Partnership Agreement on Natural Disaster Resilience is inadequate. 

The emergency management community generally accepts that one dollar spent on mitigation can save at least two dollars in recovery costs.  Australian Government spending on mitigation initiatives represents around only 3% of what it spends on post-disaster recovery and reconstruction.

*Funding provided to States and Territories for disaster resilience initiatives under the National Partnership for Natural Disaster Resilience
**Funding provided to States and Territories for recovery and reconstruction under the Natural Disaster Relief and Recovery Arrangements.

Based on these figures, as well as the flood levy introduced to meet the cost of rebuilding Queensland, it is arguable the Government’s funding of disaster recovery and reconstruction is unsustainable in the medium to long term. 

Government interest and activity in the area of disaster resilience has increased. Yet the economic and political investment of all three levels of Government remains well short of what is required to seriously tackle both the existing and potential future impact.

Where mitigation investment is best spent

Additional investment is needed to fund mitigation inititaives such as:

  • Improved land-use planning: Commitment by Government to develop national landuse planning criteria that prohibits inappropriate land-use in Australia.
  • Improved building standards: Commitment by Government to improve the community's disaster resilience by modernising the Building Code of Australia to include minimum standards for the durability of property to natural hazards.
  • Improved community infrastructure: Recovery funds dedicated to preventative infrastructure projects including barrages for unusual tides, levee banks, sea walls, properly maintained fire breaks and access trails, improved drainage and dams.

It is in the national interest to prioritise public policy and funding for natural hazard mitigation initiatives to make communities safer and more resilient and reduce the social and economic cost of natural disasters. 

The outcome of the current debate is of critical national and economic importance to governments, businesses and individuals.

 

“There is a need for a new focus on shared responsibility; one where political leaders, governments, business and community leaders, and the not-for-profit sector all adopt increased or improved emergency management and advisory roles, and contribute to achieving integrated and coordinated disaster resilience.

“This new focus on resilience calls for an integrated, whole-of-nation effort encompassing enhanced partnerships, shared responsibility, a better understanding of the risk environment and disaster impacts, and an adaptive and empowered community that acts on this understanding.”

Council of Australian Governments - endorsing The National Strategy for Disaster Resilience February 2011

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