Regional communities can take years to recover economically from natural disasters with the impacts often spilling over to nearby regions.
A report released by SGS Economics & Planning and Suncorp Insurance highlights the importance of rapid insurance payments and the need to protect regions from future disasters.
The report, Economic Recovery after Disaster Strikes Volume Two, models the economic impact from the Townsville floods in January 2019, the Black Summer bushfires in East Gippsland and Batemans Bay in December 2019-January 2020, and the east coast hailstorms in January 2020, and shows insurance has been crucial for restoring local economic activity.
Regional Australia faces not only an increased risk of disasters but takes longer to recover owing to a narrower economic base, with East Gippsland’s bushfire impacted economy not expected to recover until after 2022.
Suncorp Group CEO Steve Johnston said last summer demonstrated that communities need to be better protected from Australia’s changing climate.
“Disaster mitigation, rather than disaster clean-up, is what Australia needs to focus on. Preparing our homes and communities to better withstand extreme weather is a smarter investment than rebuilding.
“Yet governments spend 97 percent of disaster funding on mopping up and just three percent on preparation,” he said.
Economic stress often extends beyond the locations hit by natural disasters.
The 2019 Townsville floods caused a $2.5 billion reduction in the region’s Gross Domestic Product, with the ripple effect impacting surrounding regions including Ayr, Charters Towers, Cairns, the Whitsundays, Mackay, and outback Queensland, the report shows.