Government Ignored Insurance Industry’s Warnings on Climate Disasters and Need to Prepare
The government has ignored repeated warnings by the insurance industry over many years about the increasing costs of disasters as a result of climate change and the need to prepare.
Last year insurance companies slammed the Morrison government's failure to fund climate change resilience programs in the 2019 Budget.
Just some examples of these warnings include:
- The Australian Business Roundtables (including IAG and other insurers) 5 major reports on disaster resilience since 2013
- Insurers warn climate change will increase disaster damage bills (The Australian, Feb 2019)
- Australian insurers say 'act now' on climate change (AFR Feb 2019)
- Government must 'pull its weight' on climate risk (AFR Aug 2019)
- Youi warns on premium risk from climate change disasters (AFR Sep 2019)
“It is deeply ironic that the government has called the insurers to Canberra to remind them to pay claims promptly, when the government has ignored repeated calls by the insurance companies to prepare for disasters that would have reduced the destruction and the massive insurance bill,” says Mark Ogge, Principal Adviser at The Australia Institute.
“The insurance industry has been calling for government action to prepare for disasters like this for many years. Every dollar spent in preparation, prevention and building resilience saves many dollars when disasters hit.
“The tragedy is that the Government has completely ignored these warnings and missed the opportunity to prepare and now ordinary Australians are paying the price.
“The only sustainable solution is a Climate Disaster Levy on fossil fuel producers who are causing the problem in the first place, not leaving taxpayers to shoulder the burden for the government’s intransigence.
“Australian taxpayers shouldn’t have to pay for the externalities of the fossil fuel industry. A Climate Disaster Levy on these companies would be more fiscally responsible, fairer and far better for jobs and the economy.”
The Australia Institute is proposing the creation of a National Climate Disaster Fund, financed by a levy of $1 per tonne of carbon dioxide pollution resulting from all coal, gas and oil produced in Australia. Australia Institute research has shown that such a levy would currently raise around $1.5 billion a year.