The total annual cost of natural disasters in Australia is expected to more than treble to $33 billion by 2050, according to new research.
Natural disasters cost Australia more than $9 billion, or about 0.6 per cent of GDP, in 2015, according to financial services company Deloitte.
But when the impact of mental health issues, family violence, chronic disease and alcohol misuse is factored in, the bill is predicted to balloon by more than 350 per cent within 35 years.
“This report is the first time that analysis into the economic cost of the social impacts of natural disasters has been conducted,” Australian Red Cross director of Australian services Noel Clement said.
“Governments, business and communities need to work together to address the medium and long-term social impacts of natural disasters through further investment and research.”
Studies of the 2010-11 Queensland floods, the 2009 Black Saturday bushfires in Victoria and the 1989 Newcastle earthquake suggest social costs are at least as high as tangible costs such as the loss of property.
The Economic Cost of the Social Impact of Natural Disasters was one of two Deloitte reports released by the Australian Business Roundtable for Disaster Resilience and Safer Communities.
The roundtable is a business group featuring the likes of Mr Clement, IAG chief executive Peter Harmer and Westpac chief executive Brian Hartzer.
The group has urged more collaboration between governments, businesses, not-for-profits and communities, as well as greater investment in resilience programs.
The second report, Building Resilient Infrastructure, said $17 billion in 2016 dollars will need to be spent on the direct replacement essential infrastructure damaged by natural disasters by 2050.
“Designing more resilient physical infrastructure is one thing; but equally important is how we address the less visible, more intangible social impacts both before and after the debris is cleared,” Mr Hartzer said.
“The evidence is clear: if we ignore this side of the equation, the economic costs will only escalate.”