The Insurance Council of Australia says more resilience and mitigation spending is required after last week’s federal budget allocated $138.7 million over four years for disaster support.

The total includes $73.3 million to help the National Emergency Management Agency assist before, during and after a disaster, plus additional funds for aerial firefighting, maintaining a stockpile of response resources and providing mental health support for emergency service workers.

“We will also continue our work with the insurance sector through the Hazards Insurance Partnership and across the federal government to identify further ways to reduce disaster risk and put downward pressure on premiums,” Emergency Management Minister Murray Watt said. 

The federal government’s previous budget confirmed a $1 billion resilience allocation over five years from 2023-24. The spending, delivered through the Disaster Ready Fund and with matching state and territory funding, has been welcomed by insurers and delivered on a pre-election commitment.

Insurers are looking for that funding to be extended to a 10-year rolling program and for extra spending to pay for home-raising and buyback projects, building on schemes put in place in NSW and Queensland after the record 2022 floods.

“Reducing physical risks to homes and communities before disasters strike is vital to taking pressure off insurance costs in Australia,” ICA CEO Andrew Hall said. “The overall investment in resilience and mitigation remains below where we need to be as a nation.” 

Mr Hall says the budget papers show the forecast cost to the Commonwealth of recovering from the disasters of recent years has increased by almost $4 billion just since December.

The industry continues to work with the government to find ways to reduce insurance costs and build a more resilient nation, including through action on the states’ $6.8 billion stamp duty take on premiums, he says.

The budget papers also say a review will be undertaken of options for the future of the Defence Service Homes Insurance Scheme. 

The external review, to come in the first half of next financial year, will consider how best to ensure eligible veterans and serving members have access to affordable building insurance and “will inform future design improvements to the program”, a Veterans’ Affairs Department spokesperson told insuranceNEWS.com.au.

The scheme has been operating since 1919, with many features of the original program still intact. 

Prime Minister Anthony Albanese said last week the next budget will be brought forward to March, ahead of an election, with the timing on when the nation goes to the polls to be decided.