New research from Deloitte Access Economics quantifies the cost of natural disasters and recommends national investment in disaster resilience and mitigation as the most effective way to protect people and communities.

Deloitte's new “Update to the economic costs of natural disasters in Australia” report forecasts natural disasters will sap the Australian economy of at least $73 billion a year by 2060, almost double the $38 billion annually on average now. It was commissioned by the Australian Business Roundtable for Disaster Resilience & Safer Communities, which includes IAG and Munich Re as members.

“We must all continue to invest in increasing resilience to protect communities and ultimately, save lives,” IAG MD and CEO Nick Hawkins said.

Since 2012, the Roundtable has been advocating for greater action and investment in mitigation to protect Australians from the economic, emotional and social impacts of natural disasters. It aims to bring to light the true cost of natural disasters to make a clear economic case for building Australia’s resilience.

“The latest research tells us that severe weather events are becoming more frequent and severe in a changing climate and will have a greater economic impact, so it’s critical that building resilience across the nation is a priority,” Mr Hawkins said, praising the establishment of the National Recovery and Resilience Agency and the Australian Climate Service.

“Action to limit climate change must be coupled with interventions to better prepare communities. This continues to require a collective effort from all levels of government, businesses and the community, and we’re encouraged by governments at all levels taking actions to integrate natural disaster resilience into the future planning for Australia’s cities, towns and regions,” Mr Hawkins said.

Deloitte estimates the cost of natural disasters to the Australian economy will almost double by 2060 even under a low emissions scenario, and $1.2 trillion in cumulative costs is likely over the next 40 years, pushed higher by population growth, climate change and rising property values.

NSW and Queensland face an $800 billion natural disaster by 2060 bill as two thirds of Australia’s costs from natural disasters will be in incurred in those two states as they become more exposed to tropical cyclones and floods as oceans warm.

Click here to read the full report.