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Industry slams budget mitigation ‘failure’

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The insurance industry has criticised the lack of disaster mitigation spending in the new federal budget.

A 2015 report by the Productivity Commission argued at least $200 million a year is needed, but the Government continues to ignore the recommendation.

“The federal budget again fails to deliver on much-needed and overdue nation-building investments in mitigation and resilience,” an Insurance Council of Australia (ICA) spokesman told insuranceNEWS.com.au.

“Though the Federal Government has spoken in the past year about the need for mitigation and improvements to how funding is allocated, including the development of a five-year disaster mitigation framework, this year’s budget allocates only 13% of the $200 million-a-year commitment the Productivity Commission recommended.”

Mitigation has also been endorsed by the Government’s Northern Australia Insurance Premiums Taskforce, ICA says.

And recent state government budgets have also “failed to recognise the urgency and importance” of mitigation investments.

“Hundreds of communities remain vulnerable to the increasingly devastating impact of bushfires, floods, cyclones and storms. Without urgent action on mitigation and resilience, extensive and avoidable catastrophic losses are inevitable.”

The National Insurance Brokers Association says the lack of commitment to mitigation spending is “incredibly disappointing”.

“Mitigation really is the No.1 solution for the challenges we are facing across Australia,” CEO Dallas Booth told insuranceNEWS.com.au. “Without it, the cost of property insurance will continue to escalate, and in certain areas will become increasingly unaffordable.”