Insurance companies want big increase in govt disaster mitigation spending
Australia’s biggest insurers want the government to revisit the plans to dramatically increase natural disaster prevention spending, which the commission believes will save billions in post-catastrophe clean-ups.
As the damage wrought by Cyclone Debbie continues to mount, Insurance Australia Group and Suncorp have hit back at politicians’ accusations companies are “stingy” with claims, and have called on the government to adopt the recommendation it commit to an annual $200 million spend on mitigation. The proposal, part of the Productivity Commission Inquiry into Natural Disaster Funding Arrangements, was rejected by the government two days before Christmas last year, after it sat on the report for two years.
“There is overwhelming evidence that shows the economic and social impact savings which upfront mitigation funding could achieve and this is being ignored,” IAG chief executive Peter Harmer told The Weekend Australian.
“The government response in late December …. was disappointing and did not go far enough, particularly in the area of funding for disaster resilience and mitigation.
“We have been advocating for some time that there needs to be a different approach to natural disaster funding, with more focus on mitigation, to avoid some of the impacts we are seeing.”
As of yesterday, insurers had received nearly 47,000 claims from Queensland and NSW policyholders for insured losses stretching to $413m. It is estimated losses will break $1 billion.
The federal government invests about $50m a year on adaptation funding but spends more than $500m on average on post-disaster relief and recovery.
The Australian Business Roundtable for Disaster Resilience said spending $250m a year on preventive infrastructure, such as flood levees, would slash recovery costs in half and generate savings of more than $12bn by 2050.
“The recommendations of the review included significantly reducing recovery funding provided to states, while increasing mitigation funding over time,” a government spokeswoman said……. http://www.theaustralian.com.au/business/news/insurers-call-for-disaster-mitigation-increase/news-story/acf1ecfd783c1422864a4c7ad21908a3
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