The Insurance Council of Australia (ICA) has unveiled the industry’s policy recommendations for the next Federal Government, calling for a comprehensive range of initiatives that will protect hundreds of thousands of Australians living in harm’s way from natural disasters, as well as improve insurance affordability outcomes for home owners and businesses.
The centrepiece of the policy document, Advancing Australia’s Resilience, is a call for a Flood Defence Fund (FDF) – a $30.15 billion investment over 10 years to protect the country’s most at-risk catchments in Queensland, NSW and Victoria.
The proposed FDF would split the $30 billion cost between the Federal Government and the State Governments of NSW, Queensland, and Victoria, which are the jurisdictions with the most high and extreme flood-exposed properties.
The Council says the FDF would:
- Deliver new critical flood defence infrastructure ($15 billion);
- Strengthen properties in harm’s way ($5 billion);
- Help local Government undertake managed relocation (buy-backs) ($10 billion);
- Future-proof existing flood mitigation infrastructure ($150 million);
Flood is Australia’s costliest extreme weather type, but of the 1.36 million properties facing flood risk in
Australia it is estimated that more than half do not meet modern flood resilience planning and building standards.
The Council says the FDF is “a big idea to confront a big problem”. The floods of February-March 2022, three years ago this week, caused the loss of 23 lives, devastated communities, and saw insured losses of almost $6.4 billion.
“We know there is no silver bullet. However, if we don’t do anything, insurance customers, governments and taxpayers will continue to pick up the much higher costs of rebuilding every time there is a natural disaster and insurance risks becoming unavailable and affordable for those Australians who need protection the most,” said ICA CEO, Andrew Hall.
“In a cost-of-living crisis, it is important that all our efforts go into measures which will bring downward pressure on premiums, and this can only be achieved through a strong partnership between insurers and governments.
“Insurers stand ready to play their part in this important reform, but significant new government investment is the only way to reduce extreme weather risk and must underpin our future collaborative endeavours,” he said.
Advancing Australia’s Resilience also outlines other initiatives that would deliver improved outcomes for Australian homeowners and businesses, including:
- Resilience and mitigation measures: strengthening the Disaster Ready Fund; better data and flood mapping; improving disaster response and funding arrangements; cyclone-proofing Northern Australian homes; better land use planning; improving building resilience;
- Regulatory and legislative reform: abolishing state insurance taxes, right-sizing regulation; undertaking civil liability reform; expanding home ownership with Lenders Mortgage Insurance;
- Business and industry support: lowering risk for small businesses and not-for-profits; addressing motor trades skills shortages; strengthening motor trades skills shortages; enhancing cyber security; improving outcomes for strata communities.
The ICA says it is committed to working closely with the State and Federal governments on solutions that will help future-proof Australia.
“Consumers however cannot wait for mitigation and risk reduction programs to offer the critical protection and price relief needed. Immediate action is also essential – with tax and regulatory reform offering the best opportunity to ease cost pressure on insurance premiums in the near term,” said Mr Hall.
Resilient Building Council CEO and founder, Kate Cotter said large-scale resilience investment and innovation was urgently required for Australia to reduce risk and cost of living pressures.
“We support ICA’s call for big ideas to solve big problems, including the Flood Defence Fund and expansion of the Resilience Ratings Scheme,” she said.
The Council has identified 24 catchments across Australia where high flood risk results in potential risk to life, increased flood damages to homes and businesses and contributes to insurance affordability pressure. They are:
Queensland
Brisbane River
Burnett River
Condamine-Culgoa Rivers
Fitzroy River
Logan-Albert Rivers
Maroochy River
Mulgrave-Russell Rivers
Pine River
Pioneer River
Ross River
South Coast
New South Wales
Clarence River
Hawkesbury River
Hunter River
Macquarie-Tuggerah Lakes
Murray Riverina
Murrumbidgee River
Namoi River
Richmond River
Sydney Coast-George River
Tweet River
Wollongong Coast
Victoria
Goulburn River
Yarra River.
