The Federal Government should include estimates of natural disaster costs in the budget’s statement of risks, the Actuaries Institute says.

The institute supports the Productivity Commission’s recommendation for more investment in mitigation, following last year’s inquiry into natural disaster arrangements.

“Funds allocated now to appropriate mitigation projects will ultimately reduce the government expenditure for rebuilding key public infrastructure and private assets,” it says in a pre-budget submission.

Although there is more quality information about hazards and risk exposure available, there is a pressing need to communicate it, according to the institute. Including estimates of disaster costs in the budget will promote transparency, encourage planning and remove disincentives to mitigation.

The Productivity Commission found the current treatment of natural disaster costs as an unquantified contingent liability means governments make decisions about disaster risk management without having full information on the potential consequences.