Tuesday, 29 March 2022
Key budget takeaways impacting insurance:
- $268.1 million in resilience preparedness related measures
- $9.9 billion in cyber security over 10 years to improve cyber preparedness
- $2 billion expansion of the Home Guarantee Scheme
The Insurance Council of Australia (ICA) today welcomed the Federal Government’s 2022-23 Budget announcement of $268 million in related measures to better protect Australians from the impacts of extreme weather and improve protections against cyber attacks.
Under the Emergency Management Fund, the Government has committed $150 million per annum for recovery and post-disaster efforts over the next two years. An additional $116.4 million has been provided to the Black Summer Bushfire Recovery Program, funding 524 community projects with total program investment of $390 million.
Emergency Management Australia has received an additional $1.7 million to better share data and information across states and territories during large scale disasters.
The ICA has long been calling for the Federal Government to lift its investment in this area, and just last month released its Building a More Resilient Australia report which called for a doubling of Federal Government investment to $200 million in this area over the next five years, matched by the states and territories.
The ICA’s proposed $2 billion resilience investment pipeline included:
- $522 million for local projects such as flood levees to defend regional towns
- $413 million to better protect homes against flood, Australia’s most expensive natural peril, by raising utilities and services above the expected floodline
- $221 million to cyclone-proof more than 44,000 homes in northern Australia
- $712 million to support the selective reduction of fuel in our forests
- $37 million for an improved national flood early warning system, estimated to increase the lead time for flood warnings from 3-5 to 10-15 days
- $10 million to establish a national coastal hazard information database
While the two-year commitment to resilience funding is welcome, sustained and greater funding in this area is required if the risk profile of communities exposed to extreme weather is to change.
The Insurance Council welcomes the Government’s $9.9 billion investment over 10 years to boost the nation’s capacity to prevent and respond to cyber threats.
This follows the release of an Insurance Council report on Monday, Cyber Insurance: Protecting our way of life in a digital world, which highlights the challenges to maintaining and developing a cyber insurance market to support Australian individuals, businesses and organisations operating in a digital economy.
As announced yesterday, the Insurance Council and those members who offer Lenders Mortgage Insurance (LMI) remain concerned about the continued expansion of the Home Guarantee Scheme, which removes the need for eligible borrowers to have LMI.
By displacing a proportion of the LMI market, the cost of providing LMI to borrowers who do not access the Scheme is potentially impacted.
Comment attributable to Andrew Hall, CEO Insurance Council of Australia:
The Insurance Council has long been calling for the level of investment in resilience measures to be increased, so funds confirmed in the Federal Budget are an important step in the right direction.
The funds identified for the northern rivers rebuild is needed to ensure that community can rebuild stronger homes and infrastructure in a way that makes them more resilient to future extreme weather events.
While we are pleased the Federal Government is heeding this important call to step up its funding in resilience measures, there are dozens of other communities in Australia that remain exposed and require similar assistance, and we look forward to working with all levels of Government to assist in resilience and mitigation efforts.
Insurers welcome additional investment in cyber-security and resilience related measures to better protect Australian from the impacts of extreme weather and cyber threats in the digital age. We look forward to working with the Government in these important areas of public policy.