This is the third report prepared for the Australian Business Roundtable for Disaster Resilience and Safer Communities by Deloitte Access Economics.

The Roundtable’s first report, released in 2013, looked at the financial costs of extreme weather events in Australia and the dramatic growth in anticipated costs to 2050. We found that carefully targeted investment in resilience measures now will reduce Australian Government expenditure on natural disaster relief and recovery by more than 50% by 2050. We also found that in 2015 the total economic cost of natural disaster events in Australia exceeded $9 billion, or about 0.6% of gross domestic product. These costs are expected to rise to an average of $33 billion per year by 2050.

Between 2002-03 and 2010-11, more than $450 million was spent each year by Australian governments to restore critical infrastructure after extreme weather events. This equates to about 1.6% of total public infrastructure spending. In addition, it is estimated that $17 billion (in net present value terms) will be needed to directly replace critical infrastructure between 2015 and 2050 due to the impact of natural disasters.

A total of $1.1 trillion will be spent on critical infrastructure between now and 2050. Resilient infrastructure will play a crucial role in helping communities to withstand, respond to and recover from the potentially devastating impact of natural disasters in Australia.

Despite this, the report finds only limited reference to resilience in the cost-benefit analysis guidelines applicable to infrastructure project appraisals. It is concerning that there is currently no requirement for government or the private sector to consider resilience when making investment decisions, nor are there best practice principles to encourage its consideration.