Disaster mitigation economic opportunities for Australia

Each $1 invested in disaster preparation saves $13 on average in economic costs, and reduces damage and cleanup after a disaster.

Similarly, the American Progress Organisation (2019) found:

Every dollar spent on disaster preparedness can save $4 in disaster response and recovery. In Colorado, a few million dollars in fire breaks and prescribed fires saved almost $1 billion in property during the 2018 Silverthorne wildfire.

Porter et al. (2021) reported even higher ratios in Canada: new builds (30:1), retrofitting (14:1), and national programs (4:1). In Australia, mitigation can save at least $2 for every $1 spent—without even counting broader social and economic benefits.

4. Avoid the costs of massive disaster impacts

The 2019–20 bushfires were estimated by AccuWeather to cause $110 billion in total damage and economic loss.

The estimate is based on independent methods to evaluate all direct and indirect impacts of the fires using a variety of sources.

Even lower estimates suggest a $20 billion impact. These figures highlight the enormous potential savings from mitigation. For example, during the 2018 Buffalo Fire in the U.S., fuel reduction projects saved an estimated $913 million in homes and infrastructure. In the 2012 Waldo Canyon Fire, similar efforts preserved a neighbourhood worth over $75 million.

5. Reduce repeat disaster costs

Repeat disasters such as the Lismore floods and recurrent bushfires show the inadequacy of current mitigation efforts. A proactive approach is needed to stop these cycles of damage and recovery.

6. Set minimum standards for mitigation

Minimum standards should be established for bushfire and flood mitigation. For example, states could be required to conduct prescribed burning on 5–8% of forests annually, with cumulative targets over five years (25–40%). Flood-prone towns and cities should have mandated, co-funded mitigation strategies with clear timelines and accountabilities across all levels of government and insurers.

7. Introduce federal incentives

Federal incentives should encourage states to meet mitigation standards. Current arrangements effectively subsidise poor practices, with minimal prescribed burning and inadequate preparedness. Funding should be linked to performance-based metrics for fire and flood readiness.

8. Revive historic cost-sharing models

Return to the 1960s model of shared funding—one-third federal, one-third state, one-third local government—with contributions from the insurance industry. This model delivered effective infrastructure and could support disaster mitigation projects nationwide.

9. Address insurance and levy cost inflation

Rising insurance premiums, emergency services levies, and stamp duties are unsustainable. Governments must intervene where premiums become unaffordable, tying mitigation to affordability and relief mechanisms.