Analysis from KPMG has revealed over two-thirds of Australians are being impacted by natural disasters, emphasising the pressing need for infrastructure investments.
In recent years, the population of local government areas (LGAs)1 impacted by natural disasters has reached record highs.
- During the 2019-20 bushfires almost one third of Australians were living in a LGA impacted by a bushfire event.
- In 2022 around 70% of Australians were living in a LGA impacted by a flooding event.
- In 2022 around 70% of Australians were living in a LGA impacted by a storm event.
This means that around 18 million Australians were living in an LGA impacted by at least one natural disaster during 2022. In some cases, local government areas have been impacted by multiple events over the past three years, while more broadly the number of people living in impacted areas is more than double the average for the past decade.
KPMG Urban Economist, Terry Rawnsley says currently some critical infrastructure will struggle to cope with the effects of climate change.
“A significant portion of our current infrastructure was originally constructed to withstand weather conditions based on historical patterns.”
“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.”
“Governments and infrastructure players must factor long-term sustainability into decision making from the outset,” says Mr Rawnsley.
Disasters are already generating significant cost burdens with the value of insured losses caused by natural disasters in 2022 sitting at a record high of almost $7 billion.
The Australian Government’s Disaster Recovery Funding Arrangements (DRFA) paid $3.1 billion in 2018-19 and 2021-22. This is forecast to double over the next three years2.
Mr Rawnsley said, “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.”
“In the fact of increased risks of disasters, we need to ensure that our existing and future infrastructure is fit for purpose. That’s why 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.”
2. Australian National Audit office
For Further Information
+61 423 868 454