The Australian Local Government Associations State of Regions (SOR) Report 2013 asks whether parts of their shires will become uninsurable (for residents) due to insurers fear of increasing natural disasters due to climate change. (see also climate commission report ”The Critical Decade” Q: With a great number of people in bush towns paying increasing insurance bills, can we pressure insurance companies to, in turn, pressure relevant bodies (CFA, DSE etc) to return to regular burn-off practices.

The 2013-14 State of the Regions Report – commissioned by the Australian Local Government Association (ALGA) and prepared by National Economics – raises concerns that some communities will become uninsurable against natural disasters because the cost of insurance is soaring in line with the increasing incidence of floods, fires and cyclones.

The Report, launched today, assesses the health of the national economy.  It analyses government debt, household wealth, the risk of inefficient infrastructure investment in regional areas and includes a detailed assessment of the effects of the mining industry, concluding that there have been negative effects on areas outside Western Australia and parts of Queensland.

The Report also provides comprehensive economic analysis of every local government area in Australia and outlines the  financial implications for regions at risk of natural disasters.

Leading Economist and co-author, Dr Peter Brain says major disasters can cost between 0.4 and 0.7 per cent of Australia’s gross domestic product (GDP) – the total monetary value of all goods and services produced in Australia.

“We estimate that the Black Saturday Bushfires of 2009 in Victoria would have cost 0.4 per cent of GDP and the Queensland floods of early 2012 would have cost about 0.7 per cent of GDP in recovery expenses.  We’re talking about figures of up to $10 billion dollars,” Dr Brain said.

“It can take communities years to recover from a major disaster and the overwhelming likelihood is that these disasters are going to occur more frequently.  This means that some places may become uninsurable. ”

According to co-author Dr Ian Manning, the  Report evaluates the cost of recent major natural disasters and attempts to identify the cost benefits of mitigation: “Our research highlights the need for the Commonwealth, as the financially dominant layer of Government, to assist with helping communities to be as resilient as possible.”

President of the Australian Local Government Association, Mayor Felicity-ann Lewis says the Report reinforces ALGA’s continued calls for increased federal funding for natural disaster mitigation to ensure that local communities are better prepared in the face of more severe and frequent weather events.

“In ALGA’s latest Budget Submission, we argued that the amount of federal funding devoted to mitigation is not sufficient to meet the needs of local communities.  We highlighted the need for an increase in funding for mitigation to $200 million over four years with a change to funding partnerships between the Commonwealth, State and local governments,” Mayor Lewis said.

“Assisting communities to mitigate against natural disasters is critical in reducing recovery costs and impacts.”

… from the Australian Local Government Association website (ALGA)