Leading insurer Suncorp is calling on the next Federal Government to invest in mitigation and resilience projects to protect regional communities from economic ruin following natural disasters.
A report released today by SGS Economics & Planning, and Suncorp shows a disaster’s initial impact on the economies of regional cities and towns can be equivalent to a major employer leaving the town, but insurance payments help to mitigate the initial effect helping the town to recover over the long-run.
The report, Economic Recovery After Disaster Strikes, investigates the experience of three recent natural disasters; Cyclone Debbie (QLD & NSW in 2017), Tathra bushfires (NSW 2018) and Hobart flood (TAS 2018), to provide a comparison of the economic impact of disasters based on size, location and population density.
Suncorp Insurance CEO, Gary Dransfield, said the report reveals the true impact of natural disasters, and the role of insurance to assist Australia’s regional cities and towns to recover.
“Some regional communities may never recover from a natural disaster without insurance, so we must work to ensure people are protected. The Report found, following Cyclone Debbie, without Suncorp’s insurance payouts the Whitsundays would have suffered a permanent loss of 23 per cent GDP,” Mr Dransfield said.
“More than one in 10 Australians live in small regional towns, and many more in regional cities, yet despite the increasing risk, the Federal Government continues to invest 97 per cent of disaster funding in clean-up and recovery, rather than prevention.
“Very little funding is directed towards preventing natural disasters or making homes, businesses or communities more capable of withstanding the impact of fires, floods or cyclones – despite the Productivity Commission recommending in 2014 that the Federal Government should invest $200 million a year in mitigation.
“The next Federal Government needs to treat natural disaster mitigation and resilience projects as investments critical to the economic future of our country, otherwise millions of Australians will remain at risk.
“Only through committed action that builds resilience and reduces the increasing impact of severe weather events can we also shift the dial and make insurance more affordable for regional Australians.”
Australia’s 1,700 towns with populations of less than 10,000 are the most exposed to the economic impacts of natural disasters. Regional cities with larger economies, such as Lismore, Mildura, Busselton, or Port Pirie, are also seriously at risk.