Natural disasters could cost NSW $9bn a year by 2060, analysis finds

Modelling suggests climate change and population growth must be mitigated to avoid high damage bills and coastal hazards will dominate risk in future

The New South Wales coastline is increasingly at risk of severe natural disasters, with the state on track for an annual damage bill of $9bn by 2060 if the effects of climate change and population growth are not mitigated.

Fresh analysis from the NSW Reconstruction Authority revealed that while the highest natural hazard risks historically were from fires and heatwaves – and, at the moment, storms and floods – coastal hazards will dominate in years to come.

The modelling was contained in the state’s first-ever disaster mitigation plan being released on Friday. It was created to help NSW communities better prepare as the state grapples with the impacts of climate change and population growth.

“We know disasters will continue to occur,” the plan said.

“While some disaster scenarios are too terrible to imagine, they have a realistic probability of occurring over our lifetime.”

The plan outlines that while there was “often little we can do about the hazard itself”, risks can be lowered by reducing exposure and increasing resilience.

It also included lists of the LGAs most at risk for natural disaster damage costs, with the Northern Beaches to overtake the Central Coast by 2060.

The NSW Reconstruction Authority’s deputy chief executive, Simone Walker, said that while some had expressed worry about “creating concern in community” with the league tables, she hoped people felt heard and supported.

“This is concern they live with on a daily basis,” she said.

“One drop of rain in Lismore and people are heightened. This is a known unknown for these communities. What they want to know is that the state government, local government and their community has a plan to address it.”

The new plan will be launched by the reconstruction authority alongside the planning minister, Paul Scully, and emergency services minister, Jihad Dib.

Scully said that historically 3% of funds were spent on disaster prevention and 97% afterwards, but that needed to change.

“Every dollar we invest in better preparing communities reduces future costs and will help make communities more resilient,” he said.

Dib said the plan was the government “shifting the dial in how we address disasters as well as making sure we do not inadvertently put people in harm’s way through bad planning decisions”.

Government modelling revealed almost 10 million people were predicted to be living in NSW within the next 20 years, with growth expected in urban centres and along the coast.

“While population growth and climate change individually affect NSW’s future risk profile, the interplay between both can make them more acute,” the plan said.

“Climate change is increasing the severity and frequency of natural hazards and increased development in these areas means more people are exposed.”

About 85% of the state lived within 50km of the coast, which made the population “particularly vulnerable to the impacts of coastal inundation and erosion”.

The “multi-hazard” plan was designed to reduce the costs and impacts of natural disasters across the state.

It identified 37 actions to be undertaken over the next two years, pending funding commitments, including developing a statewide evacuation infrastructure framework and a policy for large-scale relocations.

The scheme will draw on the experience of residents in the Northern Rivers that were heavily flooded in 2022. Flooding affected 98 out of 128 local government areas in 2022.

On Thursday, the NSW auditor general, Margaret Crawford, released a report that found there had been no plan in place to guide the temporary housing response in the wake of the 2022 floods and responding agencies.

Crawford found the temporary housing provided in the northern rivers “did not meet the demand” and that there was still an “extensive waitlist for this housing and few people are exiting”.

“Broader housing challenges across NSW … are contributing to the risk that individuals may not be able to be rehomed for a significant amount of time,” the report read.

“The lack of plans in place to specifically guide the temporary housing response contributed to the NSW government’s inability to meet forecast demand.”

Cover photo: A cyclone causes damage off the east coast of Australia. Modelling of natural hazard risks was contained in NSW’s first-ever disaster mitigation plan being released on Friday.
Photograph: Dan Peled/AAP