Insurers Regret Meagre Mitigation Investment
The Insurance Council of Australia (ICA) has criticised the federal budget for falling desperately short in its commitment to disaster mitigation spending.
ICA and other groups had urged the Government to listen to Productivity Commission recommendations and set aside at least $200 million a year.
But, as reported in a Breaking News bulletin last week, the budget allocates just a fraction of that amount – $26.1 million – for disaster resilience.
The Government says this will be matched “dollar for dollar” by states and territories.
A further $7.9 million over four years will enable the Australian Competition and Consumer Commission (ACCC) to monitor and report on prices, costs and profits in the northern Australian insurance market.
ICA says this monitoring will not address the real problem, and the mitigation funding is woefully inadequate.
“It is a missed opportunity to invest in urgent nation-building mitigation and resilience measures,” CEO Rob Whelan said.
ICA President and Suncorp CEO Insurance Anthony Day made an impassioned plea just days before the budget, at ICA’s annual dinner.
“Australia must do much more to prevent the impact of extreme weather, rather than throw money at it afterwards in ways that do nothing to reduce the impact of the next cyclone, or flood, or storm,” he said.
“The situation where only 3% of the budget available for natural disaster responses is spent on mitigation and 97% on relief and recovery must end.”
The Actuaries Institute had also called for increased mitigation spending, and is also less than impressed with the budget.
“The institute is disappointed the Government did not announce any significant policy to mitigate against climate change risks, nor did it launch a robust policy framework to fund mitigation and adaptation measures against natural disasters,” it said in a statement.