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Australia must prepare now for climate-related disasters or pay more later, insurance regulator says

Australia must prepare now for climate-related disasters or pay more later, insurance regulator says

Australia’s banking and insurance regulator has estimated the country should be spending about $3.5bn a year to limit damage from climate-related natural disasters, warning the cost of responding to them after the fact is likely to be 11 times greater.



a close up of an old building: Photograph: James Gourley/AAP


© Provided by The Guardian
Photograph: James Gourley/AAP

In a speech on Wednesday, Geoff Summerhayes, an executive board member of the Australian Prudential Regulation Authority, said the cost of pre-emptive action to avoid the impact of disasters exacerbated by the climate crisis was far cheaper than dealing with the aftermath.

Addressing the issue of rising insurance premiums in northern Australia due to an increasing number of claims caused by storms and cyclones, Summerhayes said Apra was concerned general insurance could become unaffordable or unavailable in parts of the country.

He said it heightened the need to both cut greenhouse gas emissions and increase community resilience to extreme climate events, such as last summer’s catastrophic bushfires.

Related: Investors lead push for Australian business to cut emissions more than government forecasts

“Investing in the types of resilience, mitigation and hazard reduction measures needed to better protect Australian communities – and keep insurance affordable and accessible – comes at a cost,” he told an Australian Business Roundtable webinar. “But as we witnessed last summer, failing to take action can be far more costly in the long run, and the price paid is often far more valuable than can be measured in dollars.”

Summerhayes cited research by the business roundtable that predicted the total economic cost of natural disasters in Australia would reach $39bn a year by 2050. Based on evidence from the US that every $1 spent on resilience measures saves up to

$11 in response and recovery costs, he said covering those losses would require the community to invest about $3.5bn a

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‘We must acknowledge what’s happening’ – the hidden devastation of financial abuse | Commonwealth Bank Australia: Next Chapter

‘We must acknowledge what’s happening’ – the hidden devastation of financial abuse | Commonwealth Bank Australia: Next Chapter

Warning: this article contains details that some readers may find distressing.

Six years ago, Jane was able to escape from domestic violence. She had been working tirelessly to support her children and a husband who claimed to have no money. When she left, she discovered he had been earning more than $250,000 a year.

“I had become so tired and so browbeaten just through the process of managing it day by day that I thought, how do I move myself out of this situation?” she says. “It took so much energy to actually pick myself up and take my children.”

Like many victims of family violence, Jane appeared on paper to have it together. She is a former dean of a university, and has a master’s degree. But in private, she was subject to years of financial, emotional and physical abuse that left deep scars on her family.

“I had to stop working because I had a traumatised daughter,” Jane says. “Even now, she still has moments where her trauma becomes so much it is unmanageable. The impact of the financial abuse permeates through everything.”

Australia’s domestic violence laws repeatedly fail victims of abuse. The understanding and management of trauma – suffered by parents and children – is lacking.

For Jane, financial abuse meant she had no choice but to work herself to the bone, frightened by the fallout if she didn’t. Her solicitor husband had withheld his high earnings and left Jane to manage the strain of supporting the household.

“Psychological abuse and financial abuse are part of the same cycle,” she says. “I actually collapsed and had to go to hospital because I had absolutely flogged myself, working incredibly hard with two small children. After we separated, and I received the child support statements, I realised that while

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Australia rushes through tax cuts in COVID-19 economic stimulus

Australia rushes through tax cuts in COVID-19 economic stimulus

By Colin Packham



a large pool of water: Construction workers go about their day near scaffolding at a construction site in central Sydney


© Reuters/David Gray
Construction workers go about their day near scaffolding at a construction site in central Sydney

SYDNEY (Reuters) – Australia’s parliament approved A$17.8 billion ($12.78 billion)in personal tax cuts on Friday, quickly pushing through measures announced earlier this week to support the country’s coronavirus-ravaged economy.

Looking to get 1 million people back to work, Australia’s conservative government pledged billions in tax cuts and measures to boost jobs on Tuesday, the bulk of which are retrospective from July 1.

Australia’s economy saw its worst contraction on record in the second quarter due to the coronavirus and unemployment has hit its highest in over two decades, even as the country managed to contain the outbreak better than many of its peers.

Prime Minister Scott Morrison said on Friday 11 million Australians will benefit.

Video: Federal Budget 2020 reveals Australia headed to record debt of almost $1 trillion (ABC NEWS)

Federal Budget 2020 reveals Australia headed to record debt of almost $1 trillion

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“This is a plan to boost business, to boost jobs,” Morrison told reporters in Canberra. “Our plan for the economic recovery from the COVID-19 recession is moving. It’s happening. It’s law.”

Earlier this week, Australian treasurer Josh Frydenberg said the tax cuts will begin to take effect in December, stoking some concern that much needed stimulus remains weeks away.

The economy has been reliant on a wage subsidy scheme since March but this support will be reduced over the coming months before being stopped in March 2021.

Australia’s economy shrank 7% in the three months that ended in June, the most since records began in 1959, while the unemployment rate hit a 22-year high of 7.5% in July as businesses and borders closed to deal with the coronavirus.

Australia pledged

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Australia central bank warns of business failures as property vacancies rise

Australia central bank warns of business failures as property vacancies rise

SYDNEY (Reuters) – Business failures in Australia are likely to rise with commercial property seen among the hardest hit sectors as a shift to work-from-home arrangements empties offices and major retail precincts, the central bank said on Friday.

FILE PHOTO: A businessman walks past the headquarters of Australia’s Reserve Bank in Sydney, November 3, 2015. REUTERS/Jason Reed

The Reserve Bank of Australia (RBA) said the outlook for commercial property means banks’ impairment rates will likely climb from current low levels while some indebted landlords will find it difficult to meet their debt repayments.

Risks appear highest for retail commercial property, the RBA noted, while adding there was still a high degree of uncertainty about the magnitude and timing of business failures in the country.

Australia has been lauded for its success globally to curb the spread of the coronavirus and open its economy earlier-than-expected though with domestic and international borders still shut, activity is expected to remain subdued for some while yet.

Over the first six months of 2020, the Australian economy contracted by over 7% under the weight of strict mobility restrictions to suppress COVID-19.

The unemployment rate has since risen from around 5% pre-COVID to near 7% with economists predicting it would jump to 10% in coming months.

“Secondary-grade offices appear particularly vulnerable to falling demand, as tenants are often enticed by lower rents during downturns to upgrade to better premises,” the RBA noted.

At the same time, a high volume of new office buildings are due for completion in Sydney and Melbourne this year.

“While most of these new buildings have pre-committed tenants, it will put further pressure on vacancy rates in second-grade buildings,” the RBA said.

Given the deterioration in rental conditions already underway, office and retail property prices could fall sharply, the RBA added.

Investors

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