For residents in Australia’s disaster-prone areas, costs are growing as well as risks

SYDNEY – On New Year’s Eve in 2019, the residents of Mallacoota in south-east Australia were enjoying the summer holidays and preparing for year-end festivities when the town was confronted by a “tower of fire”.

An out-of-control bush fire engulfed the town, forcing thousands of people to flee to the beach or a nearby lake.

There was no way to evacuate, as the one road in and out of the town was closed by the authorities due to the danger.

Ms Carol Hopkins and her husband Greg, who have lived in the town for 16 years, were at their house as it faced an inferno that was later described by many residents as “apocalyptic”.

“We were at the foot of the fire,” she told The Straits Times. “It was a tower of flames that had decided to eat our house.”

Incredibly, Ms Hopkins recalled, the flames were “within seconds” of reaching the house when the wind changed direction. Their home was saved.

Ms Hopkins, who works in disaster recovery for the Red Cross, said they were lucky, but added: “There is no comfort in that, though, because the fire burned a lot of other houses when it changed direction.”

Like most residents in the town, she and her husband, a builder, decided to stay. But, more than three years on, they have learnt that living in a town surrounded by bushland and at high risk of fires can be costly.

Only about 23 of the 120 homes in Mallacoota that were burned have been rebuilt, due mainly to the complexity and costs. While all Australians have faced growing building costs in recent years due to a scarcity of materials and workers, those in Mallacoota face extra burdens.

First, a shortage of properties makes it hard to find accommodation for visiting builders and tradespeople.

Second, the region has been designated a “bush fire-prone area” by Victoria’s state government, meaning that houses are often more expensive to build. They must include protections such as window and gutter guards, or use only specific types of less-flammable timber and other materials.

“Everyone is out of pocket,” Ms Hopkins said. “We are not a wealthy town... For residents who were trying to rebuild, the last three years have been a perfect storm of difficulties with planning processes, bush fire ratings, Covid-19 lockdowns, constant rain and the impact of housing shortages.”

Mallacoota, which has about 1,300 residents but attracts thousands more during the holiday season, is not the only community battling the rising costs of disasters.

In Australia, which is highly vulnerable to the impacts of climate change, regions hardest-hit by disasters such as fires and floods often find that the tragedy and trauma are followed by a hefty financial price tag.

For those who rebuild, or whose houses are intact, an additional concern is the soaring cost of insuring properties in areas vulnerable to disasters.

A report released last week by the Actuaries Institute found that home insurance premiums in the nation’s highest-risk properties, such as those in flood-prone areas, spiked in the last year by up to 50 per cent, compared with a 28 per cent jump nationwide to A$1,894 (S$1,650) a year.

For 171,000 households in the riskiest flood-zone areas, the cost of insuring against floods alone would be about A$8,800 a year.

Often, those living in the riskiest areas have low incomes and cannot afford to move elsewhere, but are the least able to afford the higher insurance costs. Some end up uninsured.

“Exposure to natural perils dominates the premiums for affordability-stressed households,” the report found.

Across Australia, climate change has been adding to the frequency and intensity of weather-related events such as floods, bush fires, droughts and cyclones.

In towns such as Lismore in New South Wales, which was hit by record floods in 2022 that killed five people and destroyed thousands of homes, many residents have struggled to find accommodation, let alone insure it when they do.

Mr Jon O’Brien, a social justice advocate for the Uniting Church, told ST that residents in disaster-hit areas often face the direct costs of damage to their property as well as a range of indirect expenses.

Often, these residents may face health problems, such as respiratory conditions due to smoke inhalation, as well as mental health issues related to experiencing trauma and loss.

“We have to be aware that inaction on climate has enormous costs and that those costs fall most heavily and intensely on the people who are least able to meet them,” he said.

The current Labor government, elected in 2022, has begun adopting more ambitious measures to reduce carbon emissions, marking a departure from the previous Liberal-National coalition government’s notorious reluctance in taking strong climate action.