Natural disasters like bushfires, floods and cyclones aren’t rare or unpredictable. They’re inevitable and should be planned and budgeted for accordingly.

But currently, the federal budget only includes disaster recovery spending for events that have already happened. The prospect of future disasters, no matter how certain, are treated as unquantifiable 'contingent liabilities' and excluded from budget estimates. 

This paper reveals the Commonwealth spends around $1.6 billion a year on disaster recovery, but only budgets for $215 million – creating a $6 billion gap over the forward estimates.

The paper argues that estimated future disaster costs should be included in existing budget lines, a straightforward fix that would not only improve the accuracy and transparency of the budget, but provide greater incentive to invest in disaster adaptation and resilience – spending that not only protects lives and communities, but also reduces long-term costs.