Increasing cost of living, natural disasters and rising insurance costs

Increased costs of living is a very big issue across Australia and continues to increase.

A key ABS document provides valuable information in regards to increasing Living Cost Indexes (LCI) and CPI.

Increasing interest rates over the year have contributed to annual living cost rises ranging from 5.3 per cent to 9.0 per cent for different household types. Most households recorded higher rises than the 5.4 per cent annual increase in the CPI.

A significant difference between the Living Cost Indexes and the CPI is that the Living Cost Indexes include mortgage interest charges rather than the cost of building new dwellings.

Higher automotive fuel prices and insurance premiums also contributed to increases in annual living costs for all household types.

The document includes LCL and CPI information since 1986, and highlights the current high LCL's and CPI's.

There is a really good graph of real household disposal income in Australia since 1960 - it is scary..

Major concerns in relation to natural disasters, inadequate mitigation expenditure, cost of living and rising insurance costs

There are major concerns in relation to natural disasters, inadequate mitigation expenditure, cost of living and rising insurance costs for Australians.

Number 1 concern relates to inadequate natural disaster management and inadequate mitigation expenditure.

The Disaster Ready Fund (DRF)is the Australian Government's flagship disaster resilience and risk reduction initiative:

Australia's exposure to disaster risk continues to increase, with new risks emerging at an accelerated pace. Extreme heat, heavy rainfall, coastal inundation, and bushfires are increasingly impacting our communities, environment and economy.

The Australian Government has announced up to $1 billion for the Disaster Ready Fund (DRF) over five years, from 1 July 2023. Round One provided $200 million of Commonwealth investment for 187 projects in 2023-24.

The DRF is the Australian Government's flagship disaster resilience and risk reduction initiative which will deliver projects that support Australians to manage the physical and social impacts of disasters caused by climate change and other natural hazards.

The DRF was established through the Disaster Ready Fund Act 2019 and replaces the Emergency Response Fund which terminated on 30 June 2023.

The DRF is a positive step forward but the author considers not adequate for the nation. The shift of relative funding effort towards up front mitigation and resilience building is a good step forward but will unlikely be anywhere near adequate to greatly reduce ongoing natural disasters.

Just 3 per cent of disaster funding is invested prior to an event to reduce the impact of future disasters, as noted in a Deloitte Access Economics (2022) report https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-dae-economic-reality-check-minderoo-foundation-17012022.pdf: This percentage may have changed a little with the DRF funding.