Infrastructure upgrades critical to protecting Australian homes

During the 2019–20 bushfires, almost one-third of Australians were living in an LGA that experienced a significant fire.

In 2022, close to 70 per cent of Australians were living in a LGA impacted by flooding, while a similar figure were living in an area impacted by damaging storms.

Taken together, this means that in 2022, around 18 million Australians were living in an LGA impacted by at least one recent natural disaster – some areas having weathered multiple events of flooding, storms or fire in only three years.

According to KPMG, the number of people living in natural-disaster impacted areas is now more than double the average for the past decade. That’s why the firm is pushing for critical infrastructure upgrades to protect Australian homes, as it is becoming increasingly clear that large-scale action is needed to safeguard lives and property in an age where extreme events are increasingly more frequent.

Terry Rawnsley, urban economist at the firm, said it is clear that some infrastructure will struggle to cope with the continuing effects of climate change.

“A significant portion of our current infrastructure was originally constructed to withstand weather conditions based on historical patterns,” he explained.

“It is highly probable that natural disasters and extreme events will continue to present substantial fiscal risks and impact to Australia's productivity. Therefore, we must act now to ensure we have resilient infrastructure for future Australians.”

Mr Rawnsley said that governments and infrastructure players should be evaluating the long-term utility of infrastructure that’s going into place now to ensure that Australian homes are safe now and into the future.

Failure to do so would see an exacerbating cost crisis for individuals and governments alike, as insurance premiums rise to cover the increasing damage, and more frequent repair is needed in communities across the country.

The value of insured losses caused by natural disasters already reached a record high of almost $7 billion in 2022.

Moreover, the Australian government’s Disaster Recovery Funding Arrangements (DRFA) paid $3.1 billion in 2018–19 and 2021–22. This is expected to double over the next three years.

Mr Rawnsley noted that infrastructure upgrades are particularly necessary to protect the most vulnerable to disaster.

“Disaster costs are not born equally across our communities, and it is often those with the least capacity to absorb these costs that are impacted the most,” he said.

With the country bracing for a summer with a high-fire risk, Mr Rawnsley noted that there is no time to delay action.

“It is crucial to incorporate adaptation measures into ‘business as usual’ retrofitting and infrastructure replacement. Failing to do so will render the infrastructure less efficient and more prone to long-term disruptions,” he said.

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