ICA research reveals the cost of extreme weather on Australian households

New research commissioned by the ICA has found that extreme weather events over the past 12 months have cost Australian households an average of $1,532.

This marks a significant jump in costs compared to a 10-year rolling average of $888, according to the McKell Institute report commissioned by the ICA.

The steep increase is attributed to a number of factors, including the record-breaking February and March floods, the resulting insured costs and uninsured damages, the rising cost of goods and tax-payers funding government recovery expenses.

The report estimated that direct costs from extreme weather events would grow by 5.13 per cent each year as a result of increasing weather events. By 2050, Australian households would pay an estimated average of $2,509 each year, which equates to a total of $35.24 billion.

The McKell Institute has suggested that its cost calculations are relatively conservative, having excluded intangible, indirect costs such as increases in grocery and fuel prices, as well as social impacts such as homelessness, loss of work or mental health disorders.

The report recommends for federal and state governments to apportion greater budgetary spend in resilience building and future-proofing initiatives, with less emphasis on reactionary efforts such as recovery and disaster relief.

To read the full The Cost of Extreme Weather report, click here.