The governance and funding of disaster preparedness has become an urgent issue in the wake of recent floods.
Insurers and local governments have joined forces to call for federal and state authorities to urgently prioritise spending on disaster mitigation and to involve local communities in better planning to manage rising climate change risks.
The east coast NSW and Queensland floods, which saw towns inundated at record levels, causing widespread destruction and leaving thousands homeless, were declared a national emergency on 9 March. At time of going to press, the Insurance Council of Australia estimated insurance claims costs of $1.77b.
Linda Scott GAICD, president of the Australian Local Government Association (ALGA), which represents 537 local councils, has urged boards as well as governments to scenario plan better and direct more investment to risk mitigation. “Governments are going to need to rethink how they manage disasters in the light of climate change,” she said. “It’s critical that investment in disaster preparedness and resilience be lifted. We are concerned if this doesn’t happen our assets will be uninsurable.”
Praising the efforts of business during recent recovery efforts, Scott also urged boards that are scenario planning for the future to shift their asset spending to mitigation and prevention. “We need to move funding from nearly 100 per cent spent after a disaster gradually over time, to funding 50–60 per cent going to prevention.”
Insurance Council of Australia CEO Andrew Hall GAICD joined the ALGA in calling for Commonwealth investment in extreme weather resilience measures to double from $100m to at least $200m a year, or $1b over the next five years, matched by the states and territories. This is in line with recommendations from the 2015 Productivity Commission inquiry into disaster funding.
Current legislation allows for $200m per year to be spent from the federal government’s $4.8b Emergency Management Fund — although since 2019, only $150m has been committed.
ALGA is also urging restoration of funding provided through local government Financial Assistance Grants to one per cent of commonwealth tax revenues. “This would further lift the level of preparedness of local government in regional areas where exposure to fires and floods is greatest, but local tax revenue is small,” said Scott.
The ICA is calling for subsidies to improve resilience of homes and businesses to cyclone, flood and bushfire in at-risk communities and protective projects such as levees, floodways and prescribed burning.
Hall said the need has only become more urgent. The ICA’s recent policy document, Building a more resilient Australia, said without increased resilience funding and a change in approach to what we build and where we build it, the risk profile of communities exposed to extreme weather will not change.
The 2020 Royal Commission into National Natural Disaster Arrangements report said direct and indirect disaster costs in Australia were projected to increase from an average of $18.2b per year to $39b per year by 2050, even without accounting for climate change.
In the May 2021 budget, the federal government announced $600m for new disaster preparation and mitigation programs and the establishment of a National Recovery and Resilience Agency in response to the royal commission recommendations. Led by Coordinator-General Shane Stone, it was designed to combine the existing National Drought and North Queensland Flood Response and Recovery Agency with the National Bushfire Recovery Agency, including its $2b National Bushfire Recovery Fund.
Scott said the councils in disaster affected areas were working hard to think about the order of recovery to make sure that critical infrastructure such as mobile phone towers, electricity road and transport networks are prioritised and temporary housing needs to be provided immediately.
“When a disaster occurs the local government of the area becomes the lead agency by default because they have people on the ground. Councils recognise and are proud to take the leadership role but we receive 3 per cent of federal taxation and aren’t able to fund the recovery efforts alone.”
“We are seeing companies set up in impressive ways, allowing staff to volunteer and providing support in local communities.”
She said that an important consideration in recovery is to ensure that procurement of local recovery materials are sourced locally. “It is much better to donate money that locals can use to shop locally.”
“Often we see a terrible pattern of donations undermining the local economy, which then creates job losses.”
Scott also noted In the wake of disaster, communities end up with a bigger headache — piles of donated goods that aren't suitable, which end up as landfill.
“What we saw in places like Bega (after the 2019-20 bushfires), council had an enormous clean up task from the bushfires and also a clean up task from unwanted donations.
She directed people wanting to assist in the recovery effort to a platform called Givit.or.gua, which has partnered with most state and territory governments and is supported by organisations including the NRMA and insurer IAG. It allows people to offer donations, but they are only accepted once a person or agency in a disaster area has identified a need. Charities and local councils have urged people and businesses keen to support recent disaster recovery to check on community needs via the platform first.