Strategy needed to mitigate fire risks

A bushfire near Fingal in northeast Tasmania. Picture: AAP

In its pre-budget submission a few weeks ago the Insurance Council of Australia called on the federal government to step up funding for natural disaster mitigation.

The submission, which went unreported, follows years of the insurance industry trying to get the federal government to look at ways to mitigate the impact of the increasing number of natural disasters in Australia.

If the terrible events of the past few months have any lessons, it is the need for the federal and state governments to develop a national strategy for coping with natural hazards such as bushfires in a way that includes the broader business community and particularly the insurance industry.

The industry has been warning of the increasing risks of major natural disasters for decades as it is on the front line dealing with the shellshocked public as it recovers from the latest tragedy.

It is a sector that does extensive research into the potential of natural disasters both in Australia and around the world.

It is sad fact that, despite increasing evidence of severe natural disasters such as floods, cyclones and bush fires, the insurance industry response has to get channelled into yet another unread pre-budget submission.

When management consultants are brought in to advise a company on what strategies are needed, they go straight to the staff who already have clear ideas on what can be done to improve the efficiency of their organisations.

When it comes to bushfire prevention, there are already agencies have very clear ideas on what can be done to help reduce the impact of natural disasters, such as the Insurance Council and federal and state-backed Bushfire and Natural Hazards Co-operative Research Centre, which has access to 200 researchers across Australia, including 100 PhDs.

The debate on how to respond to the bushfire disasters has been charged with understandable emotion and fierce discussion over what should be done about climate change.

While those debates rage, what is needed is a more immediate, focused national conversation on how to handle natural disasters — particularly what preventive measures can be taken, such as land use policy, prioritisation of fuel reduction, building codes, co-ordination of local government, state and federal agencies and a more co-ordinated national disaster response.

A debate over the future of the Adani coal mine is not going to help mitigate next year’s bushfires.

If the latest horrible bushfires have proven anything, it’s that the situation is too serious to rely solely on government to take the initiative.

Industry has to step up to the plate with more constructive suggestions for immediate action and a sense of national urgency about an issue it has been well aware of for decades.

Like it or not, the issue of climate change has split the Coalition since Malcolm Turnbull was leader of the Opposition back in 2008.

While business and the public can and will raise issues of “climate change”, what is urgently needed is that the suffering from these latest bushfires is translated into some much more immediate call to action by industry, disaster agencies and governments.

Bizarrely enough, a research centre that has been focusing on bushfires since 2003 and on broader natural disasters since 2013 is set to lose its funding next year.

The ICA is now stepping up its call for the federal government to extend the centre’s funding to ensure its long-term future.

Given the frequency and the horror of the bushfires, it is bizarre that such a research centre, which by nature works in close co operation with emergency agencies and industry, should be in danger of closing down.

The centre already co-ordinates research, with some of the best brains in the country working on mitigating the impact of bushfires.

If anything, its resources should be increased and government pay more attention to its recommendations.

The ICA submission argues in favour of substantially increasing the emphasis on prevention rather than cure for natural disasters.

As it points out, extensive work has been done in reducing the potential impact of floods. Mitigating the impact of bushfires is more complicated but if anything more urgent.

“The Insurance Council welcomes the creation of the new National Drought and North Queensland Flood Response and Recovery Agency,” it says in its submission.

“However, as we have consistently argued, there needs to be an appropriate balance between the money spent on disaster response activities compared with the funding for disaster mitigation.”

The submission quotes the Australian Prudential Regulation Authority (APRA) in its response to the Northern Australia insurance inquiry report by the Australian Competition & Consumer Commission (ACCC) which points out that “hundreds of millions of dollars each year are spent on disaster funding, but about 97 per cent goes towards clean up and recovery with only 3 per cent going to mitigation and prevention”.

“Addressing this imbalance will save money in the long term by reducing the physical loss and economic disruption caused by storms, floods, cyclones and bushfires,” APRA argued in the submission.

APRA noted that flood mitigation efforts in Roma in southwest Queensland have helped to reduce insurance premiums by as much as 50 to 90 per cent.

The lower cost of premiums clearly reflects a lower risk.

The ICA submission welcomed the announcement by the federal government of an increase of $50m to fund efforts to mitigate the effect of natural disasters.

But it points out that this is well short of the $200m a year the Productivity Commission recommended in its report on National Disaster Funding Arrangements in 2014.

It suggests that the government should “consider the possible synergies of devoting some of the money it has earmarked for infrastructure to projects which would increase the resilience of vulnerable communities”.

The ICA wants more focus on the prioritisation and management of bushfire mitigation efforts.

It is also calling for more work to be done on how older homes in bushfire areas can be retrofitted to improve their bushfire resilience — something that has been done with housing in flood-prone areas.

It also wants more debate on building standards and land use planning in urban fringe residential areas, which are expanding into bushfire-prone areas.

There are plenty of good ideas on what needs to be done to help reduce the impact of another bush fire horror season.

But too many lives have been lost and too much destruction has already taken place to leave it to government alone.

The insurance industry has the experience and knowledge of handling natural disasters and it should be prepared to step up to be part of a national debate and call to action.