The Federal Government will spend an extra $26.1 million this financial year on disaster mitigation projects – but the Insurance Council of Australia (ICA) says this is nowhere near enough.

The cash injection, unveiled in last night’s budget, will be matched “dollar for dollar” by state and territory governments “to help deliver projects that will mitigate the impacts of future disaster events”.

But ICA CEO Rob Whelan says he’s disappointed, and the money does not address the urgent need for “nation-building mitigation infrastructure and resilience measures”.

“The allocation of $26.1 million in disaster resilience programs is well below the minimum $200 million a year recommended by the Productivity Commission and overlooks the endorsement of mitigation by its own Northern Australia Insurance Premiums Taskforce,” he said.

“Without more mitigation spending hundreds of communities that are predictably exposed to the impact of cyclones, storms, floods and bushfires will remain vulnerable to catastrophic losses.”

The Government also announced $7.9 million over four years to enable the Australian Competition and Consumer Commission (ACCC) to monitor and report on prices, costs and profits in the northern Australia insurance market.

Mr Whelan says the insurance industry will cooperate with the ACCC, but believes the move once again fails to address the real problem.

“It is a missed opportunity to invest in urgent nation-building mitigation and resilience measures,” he said.

“The Federal Government has already spent tens of millions of dollars on numerous reports into insurance in northern Australia, which have concluded insurers are operating in a competitive market and are appropriately pricing risk. 

“When mitigation is undertaken and lowers the risks to properties, insurers respond through reductions in premiums.”

More details in our regular bulletin on Monday.