Opportunities for economic reform within fire management across South East Australia

· Despite this relentless commitment to inquiries, in 2014, a report released by the Productivity Commission into Natural Disaster Funding Arrangements found that government natural disaster funding arrangements had been inefficient, inequitable and unsustainable. 'They are prone to cost shifting, ad hoc responses and short term political opportunism.' The Productivity Commission lamented that the funding mix was disproportionately recovery-based and did not promote mitigation. It observed that the political incentives for mitigation were weak, 'since mitigation provides public benefits that accrue over a long-time horizon,' and that over time this would create entitlement dependency and undermines individual responsibility for natural disaster risk management.'

· A report by the Australian Business Roundtable for Disaster Resilience & Safer Communities suggests that a mitigation expenditure in the order of $5.3 billion over the period from 2020 to 2050 (in present value terms) could generate budget savings in the order of $12.2 billion for all levels of government, or $9.8 billion when looking at the Commonwealth government budget only. If successfully implemented, it could see Australian and State Government expenditure on natural disaster response fall by more than 50 per cent by 2050.

These words highlight the huge importance of increasing pre disaster fire mitigation in Australia, opportunities to progress this, taking a long term view and providing budget savings.

The USA is addressing forest fuels and resilience particularly in western USA, particularly at the wildland urban interface as outlined in "Confronting the Wildfire Crisis". The scale of employment and financial benefits is staggering and should be considered for Australia:

The investments in fuels and forest health treatments will create an estimated 300,000 to 575,000 jobs, protect property values and small businesses, and stimulate local economies. In time, as we alter the trajectory of wildfire in the West, we can bring down the Forest Service's annual wildfire suppression costs-which averaged more than $1.9 billion per year from 2016 to 2020-and devote the funds to further restoring forest health and reducing wildfire risk in fire-adapted forests nationwide.

There are a range of other opportunities to improve the use of government funds in fire management. One opportunity area is reducing the high expenditure on large aircraft and increasing mitigation. In the 2019/20 RFS annual report, financial details were actual total expenses in 2020 was $869,534,000; grants and contributions in 2020 was $929,705,000 and aircraft hire in 2020 under Grants and Subsidies was $255,510,000.

Another opportunity area is the need to review of the increasing bushfire insurance costs and optimising insurance approaches, and hopefully reduce these costs. A 2019 USA example is outlined in "Fighting Wildfires with Innovation".

There are many other fire management economic reform opportunities across the spectrum of mitigation, prevention, suppression and recovery, some of these are outlined above and a number in Attachment 1.

Failure to implement the identified and critical bushfire economic opportunities will result in continued large and intense bushfires across landscapes, devasting large areas, communities, ecosystems and flora and fauna.