AAP FactCheck

Restoring confidence in public statements by independently testing and verifying the facts

Are natural disasters costing Australia $18 billion per year?

By Tiffanie Turnbull and Louise Evans

The Statement

"$18b is the cost of natural disasters in Australia so there is a cost to not taking action [on climate change]."

Labor leader Bill Shorten. April 17, 2019.

The Analysis

Opposition Leader Bill Shorten claims the government’s inaction on climate change is proving costly, resulting in bigger energy and natural disasters bills. [1]

AAP FactCheck examined the Labor leader’s claim that natural disasters were costing Australia $18 billion per year.

AAP FactCheck found the claim to be true.

Mr Shorten’s office told AAP FactCheck the source of his claim was the Australian Business Roundtable for Disaster Resilience and Safer Communities’ (The Roundtable) report into Building Resilience to Natural Disasters in our States and Territories.

The report, released in November 2017, said the total economic cost of natural disasters in Australia over the decade to 2016, averaged $18.2 billion per year.

It forecast that cost to grow by 3.4 per cent per year and total around $39 billion per year by 2050 [2].

The report’s calculations included emergency response efforts, damage to property and infrastructure, death and injury, effects on health, wellbeing, employment and community, and flow-on effects to businesses and networks such as network outages and disruptions to business and supply chains.

The Roundtable report describes its estimates as “conservative” because they “exclude a number of unquantified impacts” [2].

The Roundtable’s figures are supported by a separate Deakin University study led by Professor Mehmet Ulubasoglu which found the 2011 floods in south-east Queensland alone cost $14.1 billion [3].

The Insurance Council of Australia reported this year’s Townsville floods have already resulted in more than $1 billion in insurance losses. [4].

Prof Ulubasoglu’s study also supports the Roundtable’s prediction that the economic cost of natural disasters will exceed $30 billion per year by 2050 [3].

There are other reports which investigate the economic impact of natural disasters.

The 2018 International Federation Red Cross and Red Crescent Societies' (IFRC) World Disasters Report found the damage bill for the decade in Australia was about $37 billion - an average of $3.7 billion per year [5].

Similarly, the Australian Institute for Disaster Resilience (AIDR) released a government-funded report in April 2018 putting the average annual loss from disasters between 1967 and 2013 at $3.65 billion. [6]

However, both of these reports have narrower scopes than the Roundtable report Mr Shorten referenced. [6] [7]

Based on this research AAP FactCheck concludes Mr Shorten’s claim is true.

The Verdict

  • True - The checkable claim is true.

The References

1: ‘Bill Shorten in the Perth Breakfast Studio’. ABC Radio Perth. April 17, 2019: https://www.abc.net.au/radio/perth/programs/breakfast/bill-shorten/11024322

2: ‘Building Resilience to Natural Disasters in our States and Territories’. Australian Business Roundtable for Disaster Resilience & Safer Communities. (Pages 16 and 20) November 2017: http://australianbusinessroundtable.com.au/assets/documents/ABR_building-resilience-in-our-states-and-territories.pdf

3: ‘Deakin research shows economic impact of natural disasters in Australia’. Deakin University. November 28. 2017: https://www.deakin.edu.au/about-deakin/media-releases/articles/deakin-research-shows-economic-impact-of-natural-disasters-in-australia

4: ‘Insurance losses due to weather catastrophes hit $2.2 billion’. By Mina Martin. Insurance Business Magazine Australia. March 27, 2019: https://www.insurancebusinessmag.com/au/news/breaking-news/insurance-losses-due-to-weather-catastrophes-hit-2-2-billion-163265.aspx

5: ‘World Disasters Report’. International Federation of Red Cross and Red Crescent Societies. (Page 179). 2018: https://media.ifrc.org/ifrc/wp-content/uploads/sites/5/2018/10/B-WDR-2018-EN-LR.pdf

6: ‘Updating the costs of disasters in Australia’. Professor John Handmer, Dr Monique Ladds and Dr Liam Magee for the Australian Institute for Disaster Resilience. Australian Journal of Emergency Management. April 2018: https://knowledge.aidr.org.au/resources/ajem-apr-2018-updating-the-costs-of-disasters-in-australia/

7: ‘EM-DAT Glossary - E’. The International Disaster Database: https://www.emdat.be/Glossary#letter_e

Revision History

  • First published April 17, 2019 16:35 AEST