The Insurance Council of Australia (ICA) has urged the federal parliamentary inquiry into local government funding and fiscal sustainability to increase support for local councils to strengthen flood defences amid more frequent extreme weather events.
In its submission, the ICA said councils are facing rising financial pressure as extreme weather continues to impact local economies. Many local governments are now struggling to fund adequate disaster preparedness and recovery measures.
The inquiry provides an opportunity to improve community resilience and enhance insurance affordability in high-risk regions, the ICA added, noting that meaningful progress will require substantial investment from the federal government.
The ICA’s submission outlines four priorities aimed at protecting communities most exposed to severe flood risk.
First, it calls for reducing infrastructure barriers, urging the Federal government to work with state and local authorities to cut red tape and accelerate investment in flood mitigation projects. The ICA identified more than 60 such projects across 17 high-risk catchments in New South Wales, Queensland and Victoria - many of which are delayed due to lengthy approvals, funding shortfalls and limited council resources.
Second, it recommends extending the Disaster Ready Fund into a 10-year, indexed programme focussed on major infrastructure that can significantly reduce risk, rather than smaller-scale initiatives with limited impact on affordability and protection.
Third, it proposes reforms to Disaster Recovery Funding Arrangements to improve coordination between government and insurers, enabling faster recovery funding and more consistent clean-up and debris removal following major disasters.
Finally, the ICA calls for the establishment of a 10-year, A$30.2bn ($19.2bn) Flood Defence Fund, jointly funded by the Federal Government and the governments of Queensland, New South Wales, and Victoria. The fund would target 24 high-priority east coast catchments, with local councils playing a central role in delivery, as around 1.2m properties are currently exposed to flood risk.
The ICA will appear before the Committee on 1 May and discuss these priority areas in more detail.