Bushfires: Pennies on prevention could save the states millions

Today in The Australian

With the flames still raging, it is too early to tell how great the losses from this season’s bushfires will be. Already now, however, the ­commonwealth government has pledged $2bn for a National Bushfire Recovery Agency, while the NSW government has announced an additional $1bn in recovery funding.

About Henry Ergas

Henry Ergas AO is a columnist for The Australian. From 2009 to 2015 he was Senior Economic Adviser to Deloitte Australia and from 2009 to 2017 was Professor of Infrastructure Economics at the University of Wollongong’s SMART Infrastructure Facility. He joined SMART and Deloitte after working as a consultant economist at NECG, CRA International and Concept Economics. Prior to that, he was an economist at the OECD in Paris from the late 1970s until the early 1990s. At the OECD, he headed the Secretary-General’s Task Force on Structural Adjustment (1984-1987), which concentrated on improving the efficiency of government policies in a wide range of areas, and was subsequently Counsellor for Structural Policy in the Economics Department. He has taught at a range of universities, undertaken a number of government inquiries and served as a Lay Member of the New Zealand High Court. In 2016, he was made an Officer in the Order of Australia.
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18 Responses to Bushfires: Pennies on prevention could save the states millions

  1. stackja

    Today in 1939 devastation. Lesson learned? No! This time?

  2. stackja

    Bushfires: Pennies on prevention could save the states millions
    HENRY ERGAS

    But as Australia Day approaches, perhaps we could learn a lesson from the past. In March 1819, after floods had swept through the Hawkesbury River catchment near Sydney, governor Lachlan Macquarie issued an order to be read in every church and chapel for the three ensuing Sundays.

    It was, the order declared, the new settlers’ “wilful and wayward Habit of placing their Residences within the Reach of the Flood” that had caused “the deplorable losses which have been sustained within the last few years” — losses which “might have been in great Measure averted” had regulations limiting the area of settlement been respected.

    Macquarie didn’t demand that the settlers recant their sins, as would have been common in the previous century. Nor did he offer to compensate them for the losses they had incurred, as became common in the century after his own.

    Rather, very much in the spirit of the Enlightenment, he told them to mitigate risk by rationally controlling their exposure to that “impetuous element which it is not for Man to contend with”.

    Two hundred years later, as disaster once again devastates families and communities, Australia should at long last heed his call.

  3. News in 2027:

    The Federal government pledges $10 billion to bushfire recovery, the states say it’s not enough.

    The Bushfire Royal Commission points out that more action to clear fuel loads in forests needed to prevent another catastrophic bushfire.

    Fire chiefs say fuel load reduction does not prevent catastrophic bushfires. Rural fire volunteers say electric fire trucks have proven to be unworkable as constant power outages mean they can’t charge their vehicles.

    Greens and students worried about climate change call for more action as we now have only 10 years before we reach a tipping point.

    The US, UK, Russia, China and India have the biggest economic, wealth and health booms in history, as cheap and reliable energy boosts all aspects of life. The EU is still considering increasing their carbon tax to prevent catastrophic climate change.

  4. Roger

    Bushfires: Pennies on prevention could save the states millions

    And when it comes to private property being destroyed, one would think the insurance companies would be lobbying government to do just that.

    If they would listen, that is.

  5. Mark A

    bemused
    #3290934, posted on January 13, 2020 at 11:22 am

    Hope not, but I think, you are on the money, Nostradamus, move over.

  6. max

    the ­commonwealth government has pledged $2bn for a National Bushfire Recovery Agency,

    Government is not charity!

    Not Yours to Give
    “Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money. ”

    https://fee.org/resources/not-your-to-give/

  7. Rohan

    Roger
    #3290938, posted on January 13, 2020 at 11:24 am
    Bushfires: Pennies on prevention could save the states millions

    And when it comes to private property being destroyed, one would think the insurance companies would be lobbying government to do just that.

    If they would listen, that is.

    Maybe if the insurance companies hold class actions against the States for neglegence on behalf of thier customer, then the States will wake up.

  8. Professor Fred Lenin

    It was good to see comrade Albanese and the crack Shock Attack Group from the alp Politburo bravely ,side by side with their fellow travellers from the Gangrene Anti Klimate Destruction Brigade talking the fires out ,yes talking ,the fires go out due to lack of oxygen ,the talkers use it all up ,what hope has a poor fire got against lying politicians ?
    If all the bullshit talked about these fires was laid ennd to end ? Words speak louder than actions .

  9. Cui Bono

    Putting it on the plastic. Way to go ‘superior economic managers’.

  10. Docket62

    Given the State Governments complete and utter failure to adopt any of the previous RC recommendations – and in many cases simply ignored them – would this lead to the possibility of a civil suit against the government by the insurance companies who have been forced to wear the bill for the losses given these were in all probability – preventable. Is there an action available to those who’s husbands have died fighting the fires?

    I would think so.

  11. Chris M

    If you want to construct a new building in Australia there is a raft of environmental regulations to comply with. If in a known high risk bushfire zone it would be sensible to instead have covered integrated fire fighting measures such as tank / pump / sprinklers and the combustibility of construction materials etc. As in building for the environment. But appeasing the lefts imaginary god Gaia is apparently more important than actual real world environmental risks.

  12. Diogenes

    If in a known high risk bushfire zone it would be sensible to instead have covered integrated fire fighting measures such as tank / pump / sprinklers and the combustibility of construction materials etc. As in building for the environment.

    And if doing so you get no choice in the matter, in NSW& ACT at least – just like BASIX.
    No 1 son works for an insurance company (MV claims), and says wait until the claims are processed and people discover they are woefully underinsured to rebuild the same size house in a bushfire area, you will hear the screams on Mars.

    In the past many insurers would have advised cover on the basis of x m2 house size* $y = cover to rebuild as a new build and adjusted for inflation as the years roll on. For houses built before 1994, the rebuild will now have to account for Basix (adds anywhere between 15-50k depending on house size). Now there is something called BAL which came into force in NSW in May 2019….

    According to home insurance company AAMI, the estimated additional cost for BAL 12.5 to BAL 40 is between $16,000 to $56,000, while BAL 40 is between $19,000 to $73,000.

    Houses in Flame Zones — the highest risk category — could cost an additional $65,000 to $277,000, to meet requirements.

    https://www.dailytelegraph.com.au/lifestyle/home-mag/what-you-need-to-know-about-building-in-a-bushfire-prone-area/news-story/c0d5747aa81cc2d588c6eab0a631b305

    According to No 1 son, as the Bushfires started breaking out last September the Insurance Council wrote to householders in BAL40+ areas to advise they check their cover. According to his counterparts in Household insurance, very few have.

  13. The BigBlueCat

    A quick calculation … 2,000 homes destroyed, and $3 billion in federal and state assistance (excluding all the personal donations). That’s $1.5m per house. I know the assistance will also go to infrastructure, services, public amenities, livestock losses, etc, but still that’s quite considerable given a country home is typically valued much lower than a city one. And of course, there will be many with insurance payouts also.

    But let’s get this right … the states and the feds believe in anthropogenic climate change, yet they have done nothing to reduce the risks (either significantly reducing CO2 (which is useless unless the rest of the world does so too in their worldview), clearing fuel loads, making land under threat accessible, or allowing private landowners from doing the same). And now they try to buy the victims off with assistance? I can only hope a royal commission will find local, state and federal governments delinquent in their responsibilities.

  14. Crossie

    But appeasing the lefts imaginary god Gaia is apparently more important than actual real world environmental risks.

    It’s amazing how devout and committed to the Gaia religion are the people who scoff at Christianity as a fairy tale.

  15. Crossie

    And now they try to buy the victims off with assistance? I can only hope a royal commission will find local, state and federal governments delinquent in their responsibilities.

    That’s not what royal commissions are for, you put one into motion once you have decided on the outcome and listening to ScoMo it’s pretty obvious the outcome will be even more money thrown at “renewables” which will delight the green carpetbaggers.

  16. Alex Davidson

    Further to the comments by Chris M & Diogenes:

    The BAL rating system could have some merit if owners were not prohibited from clearing. In my own case the council applied, without my consent, a so-called ‘Biodiversity Overlay’ over a large part of my property close to my house. “Don’t worry, it’s not a zone, simply an overlay”. However, when I recently ran along to them to beg for their ‘permission’ to add an extension, they insisted that I construct it to flame zone standard rather than carry out the clearing necessary to lower the bushfire risk. All because of their fetish over what is nothing other than the very same scrubland that once covered the entire urban area, and was sensibly cleared to make way for human occupation.

    Eventually after a lot of arguing they ‘allowed’ me to construct to BAL 40, but it still increased the cost by about 20% compared to the cost of clearing sufficient of my own land to achieve a lower BAL rating.

    The fundamental problem here is a loss of ownership rights. All their rules and regulations, zones, overlays, etc, have transferred the essence of ownership – the right of control – from titleholders to petty bureaucrats isolated from the consequences of their actions and with nothing to lose. In doing so they have undermined the very purpose of ownership, turning titleholders into nothing more than unpaid managers forced to bear the costs and risks of plans made by others. It’s communism by stealth.

  17. Tel

    Government breaks your legs, then gives you a crutch and says, “Hey! Without me you couldn’t walk.”

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