Damage bill for floods in NSW and Queensland already expected to top $5 billion as questions are raised about who should pay

Flooding in NSW and Queensland has caused massive damage to several towns and cities — and the costs have to be borne by someone.

Local councils are facing staggering multimillion-dollar damage costs from devastating flooding “natural disasters” that have decimated local communities.

Damage caused by flooding in New South Wales and the “rain bomb” that hit Queensland is already estimated to cost around $5 billion — and this does not include the cost of constructing new infrastructure to better protect properties or to relocate susceptible homes.

The massive bill is just a taste of things to come with experts warning the cost of extreme weather events is expected to be around $25 billion a year by 2100. This figure does not include costs for repairing public infrastructure, only damage to private property.

In the Lismore City Council area alone, which saw homes flooded last week that have never been inundated before, the damage bill for the most recent disaster is expected to top $500 million.

Lismore Council general manager John Walker said the cost just to fix the road infrastructure would be north of $200 million.

“It’s probably much higher than that because so many of the rural roads are just gone, it’s not just a few potholes,” Mr Walker told news.com.au.

He can’t see how the total cost to council would be less than $500 million.

The damage to council’s own buildings has not yet been assessed but is expected to be significant. Council owns many properties in the CBD — the epicentre of the disaster — and Mr Walker said it had lost its art collection including the $1 million masterpiece Hannah Cabinet. Its gallery was flooded, as well as the civic hall and other historic buildings.

One sewage treatment plant has also been lost and another damaged. Water supply pumps will need repairs.

“In our view, this was a natural disaster, not just a flooding event, because of the extent of the damage,” Mr Walker said.

“The big problem was that people assumed the water would never reach the second level but it did, and there were ceiling collapses and stored goods were damaged.”

The estimated bill doesn’t include damage to private homes or state infrastructure, or funding required to build structures to prevent future flooding.

“It mounts every day, the more we think about it,” Mr Walker said.

The staggering repair cost has raised questions about how recovery efforts will be funded and who will bear the cost of making communities more resilient to future extreme weather.

The flooded Lismore city hall on March 1, a day after the city was hit by a record flood. Picture: Stuart Cumming

The flooding in Lismore was unprecedented. Picture: Stuart Cumming

Lismore is just one of 17 local government areas in NSW hit by recent flooding, the others were Armidale, Ballina, Bellingen, Byron, Clarence Valley, Coffs Harbour, Glen Innes Severn, Hornsby, Kempsey, Kyogle, Lismore, Nambucca, Port Macquarie/Hastings, Richmond, Tenterfield, The Hills and Tweed.

These other councils are also facing million-dollar damage bills.

In neighbouring Byron Bay shire, which includes the heavily impacted Mullumbimby area, the council is estimating the damage bill will top $100 million.

More councils could also be added to the list with heavy rain now impacting parts of Sydney.

News.com.au has asked the NSW Government if it has estimated a state-wide figure for damage but it has not yet responded. Queensland has already estimated its recovery programs and support measures for flooding will cost it between $2 billion and $2.5 billion.

Prime Minister Scott Morrison is also expected to visit Lismore on Wednesday to announce funding support for reconstruction, businesses and families, amid accusations the Federal Government has been missing in action during the devastating NSW floods. Labor has called on him to immediately declare a national state of emergency.

Insurance claims top $1.45 billion

Meanwhile the Insurance Council of Australia (ICA) said Tuesday claims from 80 local government areas related to floods in south east Queensland and in NSW was now estimated to be around $1.45 billion. About 69 per cent of claims were from Queensland and 31 per cent from NSW.

It said around 80 per cent of the claims were for domestic property, 17 per cent were for motor vehicles, and the remainder were commercial property claims.

The cost of extreme weather events will likely become a greater burden as climate change kicks in and makes disasters more frequent.

Climate Valuation analysis has estimated damage costs for private property across Australia will rise by a staggering 257 per cent, from an average of $7 billion in 1990, to $25 billion in 2100.

The hazards that are expected to contribute most to this increase are flooding, coastal inundation and extreme wind including cyclones.

Climate Valuation chief executive officer Dr Karl Mallon said climate change would worsen the impacts of extreme events.

“The physics are simple, as the Earth becomes hotter, more water from the ocean and land is evaporating and being held in the air, so when a rain event occurs there’s literally more rain that can fall down,” he told news.com.au.

“So that means flood events on average will be more frequent and more severe and damaging.”

The clean up continues in Lismore. Picture: Toby Zerna

Councils cannot bear the burden of these costs alone

Lismore general manager John Walker said council was determined to keep the CBD in its current location despite the devastating flood damage but it would look at flood mitigation and what it could do to protect properties.

“We need to do something more than has been done in the past so that’s going to be a big bill as well,” he said.

“We’ve got to review what we can do but the cost of that will be very, very high so we’ll rely on federal and state funding for this.”

Mr Walker said funding was also needed to possibly relocate homes away from flood plains.

“Some properties are beyond repair and I think we seriously need to look at these areas and make decisions on whether rebuilding is realistic or whether some of that land could be used for flood mitigation,” he said.

“These are big questions that are unresolved but we have to do our studies and have the argument.”

So far the Federal Government has paid $282 million in disaster payments since March 1, to 242,000 people impacted by the floods and this includes $157 million in payments to 135,000 people in NSW.

A joint $434.7 million package released by the Commonwealth and NSW governments includes $210 million to assist affected communities with the clean-up and removal of flood and storm related damage, as well as $1 million grants for impacted councils to help with immediate social, built, economic and environmental needs.

Mr Walker said he was confident more support would be provided.

“We really do need to know what the state and federal governments intend to do, so we can get on with the recovery,” he said.

A makeshift boat ramp during record flooding in Lismore on February 28. Picture: Stuart Cumming

$2 billion ‘rain bomb’

In Queensland, where a separate “rain bomb” also created havoc in Brisbane and other areas, the state government is already estimating its recovery programs and support measures will cost between $2 billion and $2.5 billion.

It expects flooding will reduce economic activity in the state by $1 billion – equal to around 0.25 of a percentage point of gross state product.

Premier Annastacia Palaszczuk said the flood event had impacted 22 local government areas and eight cities.

“Although recovery is well underway, there is considerable work ahead to recover and rebuild,” she said.

Sectors most affected include agriculture, construction, tourism, wholesale and retail trade, transport and recreational and entertainment activities. Private insurance claims are estimated to be around $936 million.

Brisbane City Council says it doesn’t yet have an estimate for its costs but damage to its ferry network will reportedly take three months to fix, while bikeways could take years to repair.

Flooding in the Brisbane suburb of Rocklea. Picture: Liam Kidston

Other councils including Gold Coast City Council have weathered the floods relatively well, with Mayor Tom Tate telling news.com.au its damage bill is expected to be less than $10 million.

“We have come through this remarkably well,” he said.

Cr Tate said less than 80 freestanding houses had seen water inside their homes. Just under 180,000 of the 250,000 dwellings in the area, not including apartments, got water on their property, mainly in their backyards.

Cr Tate said council had done a lot of work to mitigate flooding risk including spending $250 million in the last 10 years on upgrading the stormwater system. It also dredges the mouth of the creek every year so water flushes out quickly, and the height of the Hinze dam had been doubled 15 years ago.

However, council will have to replace a wooden bridge at Tallebudgera Valley and there had been two landslips that needed repairing. Like other councils, the flooding also lifted up roads and these will have to be fixed.

Should coal, oil and gas companies pay up?

Environment groups like Greenpeace Australia Pacific have advocated for a climate compensation fund to help with the cost of natural disaster to be paid for by the coal, oil and gas companies, whose activities are fuelling the climate crisis.

Greenpeace Australia Pacific climate impacts campaigner Martin Zavan said some of the burden could be lifted from communities by asking polluters to cover damage bills instead of ordinary Australians.

“The latest report by the IPCC warns that climate change caused by burning coal, oil and gas, means Australia is facing even more catastrophic extreme weather events of all kinds, with less time between events,” Mr Zavan said.

“This puts local communities in the firing line with compounded climate impacts reducing time for recovery in between.

“Some of the communities affected by the current flood disaster were also hit by flooding last year, and bushfires and heatwaves only years earlier.

“These stacked disasters make recovery much more difficult, and as well as taking a massive economic toll, there is increasing awareness of the negative impacts on mental health.”