Emphasise disaster mitigation, not recovery, ALGA & insurance industry tell Parliament

The Australian Local Government Association has told a Senate inquiry that new legislation to create a natural disasters emergency response fund ought to focus on mitigation measures before a calamity occurs, rather than only on recovery efforts.

The Senate Finance and Public Administration Committee is examining the Emergency Response Fund Bill 2019 and Emergency Response Fund (Consequential Amendments) Bill 2019, which could allow the Commonwealth to provide additional funds for emergency response and recovery following natural disasters that have “significant or catastrophic” consequences.

“If it is the case that the Commonwealth has decided that disaster mitigation projects can be funded from the Emergency Response Fund (post a disaster occurring in an area), this decision will be strongly welcomed by ALGA, although it raises the obvious question of why pre-disaster mitigation aimed at preventing or minimising damage from potential natural disasters is excluded,” the ALGA submission said.

“In such an instance ALGA would urge that the Bill be amended to enable funds not debited from the account in any financial year to be redirected to pre-disaster mitigation funding.”

ALGA and other respondents noted a 2014 inquiry by the Productivity Commission which found 97 percent of disaster funding went into reconstruction and recovery, with three percent on mitigation and community resilience measures.

“The Productivity Commission highlighted the value of disaster mitigation expenditure and raised the idea of a $200 million per annum mitigation program,” ALGA’s submission said.

“The Australian Prudential Regulation Authority and the Insurance Council of Australia, as recently as September 2019. have called on the Government to adopt the Productivity Commissions recommendation.  

“ALGA has consistently advocated for the establishment of a targeted disaster mitigation program at a level of $200 million per annum for four years. 

“In addition to disaster mitigation, such funding would have co-benefits that accrue even in the absence of a natural disaster.”

Benefits to communities may include short-term employment, more reliable services, more connected communities and lower insurance premiums, the ALGA submission added.

The Insurance Council of Australia’s submission said investing in preventative mitigation infrastructure is a risk reduction measure that is poorly addressed by government.

“Appropriate disaster mitigation serves to protect exposed communities, ultimately reducing the need for recovery funding raised through taxpayers and lowering premiums for those living in highly exposed areas,” the Council’s submission said. 

“Whilst a cliche, the phrase prevention is better than the cure is the rule in most policy areas, except it would seem in disaster management.”

The Australian Business Roundtable for Disaster Resilience & Safer Communities, whose members include the CEOs of companies including Westpac and Optus, recommended “governments at all levels increase funding for mitigation works” to make communities safer and more resilient. 

The Australian Red Cross, which has responded to disasters in Australia for more than a century, also urged the legislation to direct funding from disaster recovery to disaster risk reduction.

“Boosting investment in disaster risk reduction will help communities get better at anticipating hazards, withstanding adversity, reducing costs and recovering more quickly,” its submission said.

“It will create jobs and make communities stronger.” The Australian Technology Network of Universities and other university associations objected the Bill’s proposal to transfer about $3.95 billion from the Education Investment Fund to create the emergency fund.

Image: Brisbane floods by Andrew Kesper