Economic Resilience Report – from an Australian Bank

CBA Building Martin Place

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From the Continuity Central website, notice of a new report titled Economic and community resilience: the impacts of natural disasters; Sept. 20.  This is a useful, informative 24 page document, and I recommend you read the full report. From the summary of findings provided by Continuity Central:

A new publication from The Commonwealth Bank of Australia (CBA) explores the lessons that governments, financial institutions and retailers around the globe can learn from Australia’s experience of the longer-term impact of natural disasters on personal income and the wider economy. [Emphasis added ]

Analysis in the report provides new insight into the short and longer term effects that natural disasters can have on sources of income, salary levels and salary recipients. For example, it shows that it takes from 6 to 18 months for the majority of personal income sources to return to pre-disaster conditions, with very high proportions of people receiving some form of government support to rebuild their lives in the interim.

Other key findings are:

• There are four main factors that shape the pathway to personal income recovery in the disaster affected communities: scale, frequency of disasters, local industry profile and proximity to population hubs;

• Frequent, repeated disasters can hinder personal income recovery. For example, the cumulative effect of flood and cyclone damage is still hurting North Queensland, with key agricultural industries (sugar cane and tropical fruits) having insufficient recovery time between events. As a result, increasing proportions of people are relying on unemployment benefits as their only source of income, with average salary amounts continuing to decline

• Even when people are not directly impacted by natural disasters, they can feel they are – two thirds of Australians believe the recent natural disasters had a negative impact on the national economy;

• Some disasters such as the 2011 Queensland floods are of such magnitude that they impact on the broader economy. However at a macro-economic level, the economic cost of disasters is usually recouped in the subsequent rebuild. For instance, tradespersons engaged in rebuilding activity can look forward to strong employment opportunities;

• Local industries are affected differently by natural disasters. Where agriculture is dominant, what is grown or farmed matters. For example, crops that rely on established trees, like bananas grown in North Queensland, may take multiple seasons to recover, impacting heavily on local employment prospects;

• Proximity to large towns/cities makes a difference to personal economic recovery. For the Victorian bushfire communities, the close proximity to metro-based sources of employment and services helped residents to maintain employment and local residency. Whilst high proportions of bushfire-affected residents migrated in the aftermath of the disaster, the majority moved less than 50 km away;

• Localised disasters have a truly national impact – almost four out of ten Australians say they were impacted by recent natural disasters (affected either directly, or indirectly through family and friends).

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