The next federal budget should prioritise funding for disaster mitigation, the Insurance Council of Australia (ICA) has told Treasury.

ICA’s pre-budget submission also calls for greater consultation on funding for the Australian Prudential Regulation Authority (APRA), “which ultimately derives funding from an industry levy”.

It notes last year’s Productivity Commission inquiry into natural disaster funding arrangements recommends allocating more money for mitigation, rather than for recovery.

“Increased mitigation funding should be conditional on matched funding contributions from the states and territories,” the submission says.

It says states with high exposures could get a larger share.

Although the Federal Government has long had a formal cost-recovery policy for APRA, ICA says there is little consultation on the level of industry funding and a lack of accountability on how it is used.

Insurers want to comment on APRA’s funding, with a final budget for the authority and a summary of stakeholders’ responses submitted to the Government.