The annual cost of natural disasters in Australia is expected to skyrocket, doubling by 2030 and more than tripling by 2050, according to two recent reports.
The reports, launched by the Australian Business Roundtable for Disaster Resilience & Safer Communities, reveal the cost of natural disasters will spike from $9 billion to $33 billion over the next 34 years.
Speaking on behalf of the Roundtable, IAG Managing Director and CEO Peter Harmer says the reports reveal that social devastation and the impacts to infrastructure can be the longest lasting and most significant consequences of natural disasters.
“We need to do more to help our communities prepare for and recover from disasters. Sadly the devastation of bushfires, flood and earthquakes on our communities can last for years, if not decades,” Harmer says.
Roundtable member and Australian Red Cross Director of Australian Services Noel Clement says framework developed in The Economic Cost of the Social Impact of Natural Disasters reveals the true cost of natural disasters was at least 50% greater than previously estimated.
The report found that when social impacts such as mental health issues, family violence, chronic disease and alcohol misuse are included, the total cost of natural disasters would average $33 billion per year in real terms by 2050.
“Deloitte’s modelling showed that last year’s spate of natural disasters left a damage bill of more than $9 billion, which was about 0.6% of our Gross Domestic Product, and this is expected to double by 2030,” Clement says.
“Governments, business and communities need to work together to address the medium and long-term social impacts of natural disasters through further investment and research into community resilience programs.”
The Building Resilient Infrastructure report found that $17 billion will need to be spent on the direct replacement of critical infrastructure such as roads, railways and hospitals up to 2050, as a result of natural disaster events.
The reports deliver the first economic analysis of the social impact of natural disasters and the benefits of ensuring infrastructure assets are more resilient to extreme weather events.