A new report by SGS Economics and Planning for Suncorp shows that regional cities and towns face the dual threat of increasingly volatile and severe weather and a narrow economy that intensifies the impacts and delays recovery.
The report Economic Recovery After Disaster Strikes investigates the experience of three recent natural disasters - Cyclone Debbie (QLD & NSW in 2017), Tathra bushfires (NSW 2018) and Hobart flood (TAS 2018) - to provide a comparison of the economic impact of disasters based on size, location and population density.
Report co-author Terry Rawnsley, Principal and Partner at SGS Economics & Planning, said the speed of the disaster response, and injection of funds, were critical to the strength of the long-term recovery.
“If people see recovery occurring quickly after a natural disaster, it boosts confidence and encourages people to stay. We know once people leave it is very hard to get them back, forever changing the community,” Rawnsley said.
“The impact of a major natural disaster to a regional city or town is like a factory or mine closing – this has a range of flow on effects with widespread and long-term impacts across the whole economy and community."
The report found the Tathra bushfires on the New South Wales South Coast hurt the local economy by an estimated $207 million (or a 33.7 per cent) decline in local GDP. This was a significant economic impact, primarily driven by disruption to the town’s key tourism sector. Conversely, Hobart showed more resilience when hit with a flood in 2018 with an estimated $908 million (or a 7.5 per cent) decline in local GDP.
“Our changing climate will see the increasing prevalence and severity of natural disasters, which means there is a growing risk of Australia’s economic performance being undermined," said Rawnsley.
More than one in ten Australian's live in small regional towns and many more in regional cities. Despite increasing risk of natural disasters, 95 per cent of disaster funding is directed to clean-up and recovery, rather than prevention.
"Governments need to do more to mitigate and prevent natural disasters," said Rawnsley.