Kathryn Matthews, Director of the Economic and Infrastructure Advisory Group at Deloitte, presented at our seminar entitled 'Adaptation and Disaster Risk Reduction: Shared Risks to Shared Values: A Business Case' on Tuesday 24 June 2014 in Melbourne. Held as part of our Sustainability Leadership Series, the seminar brought together experts and practitioners from across government, business, academia and civil society to provide the business case for disaster risk reduction and climate adaptation. For more information about this seminar and the UNAA Sustainability Leadership Series please visit www.unaavictoria.org.au/education-advocacy/masterclasses/

1. Building our Nation’s Resilience
to Natural Disasters
Kathryn Matthews
Melbourne, 24 June 2014
Australian Business Roundtable for Disaster
Resilience and Safer Communities

3. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
Background to the Paper
• Roundtable members

4. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
What is the (economic) problem?
• The problem is large: The total economic costs of natural disasters in
Australia are estimated to average around $6.3 billion per year – every year.
• And it is getting larger: In today’s money (i.e., taking out inflation), the
total annual cost of natural disasters is forecast to reach $23 billion by
2050.
• An ounce of prevention would make sense: An increase in pre-disaster
resilience expenditure could see Australian Government expenditure on
future natural disaster response costs cut by 50%.

5. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
Why will costs rise?
• Conservative costing: Even after allowing for inflation, costs will rise
notably. That isn’t due to any allowance for the effects of climate change.
• People and place: Partly the lift in costs will be due to population growth.
And partly it is because population density will lift
• Housing and infrastructure values will lift too.
• But another factor will be WHERE we will live: Australians will
increasingly live in the ‘pretty bits’ of our nation. But many of them are low
lying coastal regions, which tend to be more at risk in natural disasters.

6. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
It can be done … History proves it, and a range of economic studies
suggest the same
Case Studies – Range of Benefit Cost Ratio of specific resilience measures

7. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
So ‘prevention’ makes sense. But why is it so hard?
• Good progress has been made in some areas: for example, the
National Strategy for Disaster Resilience, Geosciences Australia,
Bushfire and Natural Hazards CRC.
• But fresh impetus and new approaches are required if we are to
address the most difficult challenges, such as existing settlements.
• Improving resilience can be achieved with the combination of:
• aligned government financial support (consistent with reduced future
disaster relief and recovery costs to government)
• appropriate price signals from business, and
• increased awareness of risk by individual home owners.
• However the coordination challenge is large and alignment of
incentives is critical.

8. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
The key recommendations
1. Coordinate: Improve coordination of pre-disaster
resilience by appointing a National Resilience Advisor and
establishing a Business and Community Advisory Group.
2. Commit: Commit to a long term annual pre-disaster
resilience fund.
3. Invest: Identify and prioritise pre-disaster investment
activities that deliver a positive net impact on future
budget outlays.

9. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
Building a more resilient Australia

10. Building Our Nation’s Resilience to Natural Disasters © 2014 Deloitte Access Economics Pty Ltd
Where to next?
• The Productivity Commission is considering these issues
and due to report at the end of the year
• A second paper on the issues around data and research is
being finalised now
• To get involved go to the website and register interest.
http://australianbusinessroundtable.com.au/