12 Jan 2017
A government that's underwhelmed by disaster
Disaster season is upon us and weather experts have been warning to brace ourselves for a wild few months with higher than normal cyclone activities in the north and vulnerability to bushfires after last year's big wet.
Those who might be victim to one of summer's natural disasters would have been unimpressed by the Turnbull government's response just days before Christmas to the 2014 Productivity Commission's report into natural disaster funding arrangements. The report was the first comprehensive review of disaster funding arrangements in more than a decade.
The emergency management industry, as well as the insurance sector, have been eagerly waiting to see how the federal government would respond to the commission's solid blueprint for preparing for natural disasters.
Federal Emergency Management Minister Michael Keenan's pre-Christmas four-page response, which took two years, is disappointing.
The key finding of the commission was that 97 per cent of disaster funding is spent after a disaster and only 3 per cent goes toward mitigation and preparedness.
The economic costs of rebuilding communities is shared by all Australians when Commonwealth funds are dispersed for recovery.
The commission's report made some very sensible suggestions as to why we should be boosting investment in disaster prevention: our economy won't suffer as much damage in a disaster, we can unlock productivity gains, and importantly, homeowners and businesses should pay less for insurance as their risk drops.
Investing in a range of measures, such as flood mitigation infrastructure and programs that strengthen homes in cyclone-prone regions, will protect life and property, save taxpayer dollars and grow the economy.
The commission's central recommendation was that the federal government significantly increase its mitigation funding to $200 million a year to be matched by states and territories.
But the Turnbull government has rejected this funding increase, citing concerns raised by the jurisdictions about the drop in recovery funding to pay for mitigation.
They've committed no new funding, simply restating existing national partnership agreements and funding announced by the previous government three years ago. The existing NPA allocates $52.2 million in 2016-17.
Apart from some supporting platitudes around data sharing and better understanding of risk, the overall response suggests the Turnbull government believes the current funding arrangements are adequate, with disaster management remaining primarily a state responsibility.
This approach almost certainly means that the upcoming government response to the Northern Australia Insurance Premiums Taskforce report that's considered the feasibility of options to lower insurance premiums in areas subject to high cyclone risk will contain no commitments to disaster mitigation.
As a nation we should be identifying assets that are vulnerable by location to known impacts of disasters and seeking to strengthen those assets to reduce service recovery time. In these areas we need a targeted mitigation program that reduces vulnerability to the most common types of damage.
This should also be an approach that property investors embrace: projects built with resilience in mind should enjoy greater sales and leasing success by offering assurance about the integrity of the project. And more resilient projects will benefit from greater long-term maintenance savings and higher overall value compared to more vulnerable properties.
We shouldn't put off preparation for resilience for it will cost us a lot more if we do, just as it's done with disease.
In our societal response to human disease we have prevention, treatment and recovery. Treatment is about first aid and modern medicine, and it's received the most attention because it's urgent and can't be postponed.
Recovery is about rehabilitation, supported by ongoing vigilance. Some people, just like some communities after disasters, recover better than others.
The prevention side of public health measures followed last, despite what we now know about its critical importance to longevity.
We should be investing more in mitigation because it's the preventive health piece of the community resilience story.
We shouldn't, however, be framing this as a cost – just as we don't think about public health measures in this way when it comes to disease.
Disaster mitigation should be a central part of the Turnbull government's micro-economic reform agenda.
The total annual cost of natural disasters in Australia is expected to increase from $9 billion to $33 billion by 2050, according to a study last year by Deloitte Access Economics.
Anthony Bergin is senior research fellow at ANU's National Security College and a senior analyst, Australian Strategic Policy Institute
Originally published: The Australian Financial Review. 12th Jan 2017