National News

Budget disaster funds misplaced: insurers

The insurance industry body has accused the federal government of failing to do enough to support millions of people living in disaster-prone parts of Australia.

The Insurance Council of Australia said a significant part of the $3.9 billion Treasurer Josh Frydenberg promised to the natural disaster Emergency Response Fund should have been spent on infrastructure projects geared towards solving the problem of natural disasters.

The ICA said only three per cent of disaster funding is spent on prevention, with 97 per cent going on "continually patching up communities and people in the aftermath".

The Treasurer also promised $232 million for flood-affected Queenslanders, an additional $8 billion in infrastructure spending, and up to $300 million in grants to flood-hit farmers.

"None of this money appears to be directed towards preventing natural disasters or making homes and businesses more capable of withstanding the impact of floods or cyclones," the ICA said in a statement.

"The coalition has ignored the Productivity Commission, which recommended the Commonwealth invest at least $200 million a year in mitigation and resilience projects (matched by state and territory governments)."

The ICA, whose members are forced to make huge payouts for events such as last month's cyclones and February's north Queensland floods, last month used the government's own data to identify the 20 most flood-prone federal electorates.

It said 16 were in Queensland, some in marginal seats.

"The coalition has again failed to provide a vision or a sustainable solution for millions of Australians who live in disaster-prone regions," the ICA said.

Insurance losses from the Queensland floods topped $1 billion, taking the total cost of three recent extreme weather events to $2.2 billion even before cyclones Trevor and Veronica are taken into account.

The Actuaries Institute, the industry body representing risk management professionals, also called for long-term climate policy goals.

"The Institute was disappointed that there were no additional measures announced in the budget last night to mitigate climate change or to improve the nation's general resilience against natural disasters," Actuaries Institute chief executive Elayne Grace said.

© AAP 2019