Disaster resilience: According to a Deloitte Access Economics Report commissioned by the Australian Business Roundtable for Disaster Resilience and Safer Communities, natural disasters in Australia are expected to cost $33 billion per year by 2050.

The Australian Business Roundtable for Disaster Resilience and Safer Communities was formed to provide expertise, research and resources to Governments.

The report entitled ‘Building resilient infrastructure’ which was published this month, points out that the majority of the costs incurred by natural disasters such as bushfires, floods, storms and cyclones will be borne by Australian Governments and ultimately taxpayers.

In addition to the direct costs of rebuilding, the indirect costs associated with losing infrastructure services are substantial according to Deloitte Access Economics. Indirect costs include delays, interruption to services, financial losses, plus stress and anxiety.

The Australian Government Productivity Commission and Infrastructure Australia have previously highlighted the need to prioritise investments that limit the extent of damage from natural disasters in Australia.

Disaster resilience for natural disasters

The Productivity Commission’s Natural Disaster Funding Arrangements inquiry report in 2015 highlighted that Governments tend to over-invest in reconstruction following natural disasters and under-invest in mitigation that could limit the potential impact in the first place.

Infrastructure Australia’s Australian Infrastructure Audit report 2014 recommended increased focus on resilience and improving the maintenance of existing infrastructure. This report also noted that the frequency and intensity of extreme weather events is increasingly likely to pose a threat to infrastructure assets.

Determining the most appropriate resilience measures prior to both a natural disaster and to the construction of infrastructure can be challenging but invaluable. A detailed assessment of the likelihood of a hazard affecting an asset and an analysis of the resilience options that could be implemented is a very important part of determining which resilience measure is most appropriate.

Deloitte’s report highlighted three case studies which demonstrated that taking resilience into account prior to initial investment approvals would alter the ultimate infrastructure investment decisions. The three case studies were as follows:

• The loss of electricity caused by the 2007 bushfires in Victoria
• The flooding of a highway bridge in regional New South Wales
• The loss of telecommunications services as a result of the Brisbane floods in 2011

The Deloitte Access Economics ‘Building resilient infrastructure’ report clearly highlights the need to incorporate natural disaster resilience into project decision making processes in Australia. These natural disasters also need to be included in a company’s risk profile right from the start of the project planning phase.

At an expected cost of up to $33 billion per year by 2050, it is clear that neither Australian Governments nor businesses can afford to ignore the financial impacts of natural disasters and the economic cost of climate change. To read more click here.

Mr Jonathan Coppel, Productivity Commissioner – Natural Disaster Funding, Productivity Commission attended the 5th Australian and New Zealand Disaster and Emergency Management Conference in May 2016 as a Keynote Speaker and presented the key findings in the Federal Government’s Productivity Commission’s final report into Natural Disaster Funding Arrangements. Click here to read more.