Communities left financially devastated in wake of bushfires

A fire rages through Bilpin, in New South Wales.

The bushfires that have torn through the south coast of New South Wales and East Gippsland since December have killed at least 33 people and burned 11 million hectares of land. More than 2000 houses were destroyed in NSW alone. In Victoria the toll may be as high as 300 homes, with up to 100 elsewhere. More than 1 billion native animals have also been killed.

The impact of the fires on the lives and wellbeing of people, whether directly impacted by the bushfires or subjected to unprecedented bushfire smoke, has been simply devastating.

For those living in areas impacted by the bushfires, the sheer scale of the fires and their timing (during the summer school holidays) have had a crippling impact on many working people, including small business owners.

Offering $2 billion over two years to a newly established National Bushfire Recovery Agency, Prime Minister Scott Morrison said “the surplus is of no focus to me” on January 6.

By comparison, the Queensland government alone spent $7.6 billion in subsidising the coal industry between 2008-14, according to The Australia Institute. And according to the International Monetary Fund Fiscal Affairs Department, Australian subsidies of fossil fuels reached $29 billion in 2017.

The sad fact is that the federal government’s response to the fires has been anaemic. Despite the rhetoric, payments have been minimal and stories of working people struggling to make ends meet in the wake of the fires are multiplying.

The federal government is offering a one-off payment of $1000 to those who have lost their homes in the bushfires and an additional $800 a child (up from the original $400 a child following public outrage). For those who lost their livelihoods, the government is offering access to the Disaster Recovery Allowance (DRA, essentially an equivalent of the NewStart unemployment allowance), for up to 13 weeks.

Payments ‘seriously inadequate’

The payments being offered by the federal government are “seriously inadequate”, according to Australian Council of Social Service CEO Cassandra Goldie.

She called on the federal government to raise one-off payments to $3000 per adult and $1000 per child. Goldie said she feared the DRA, at only $40 a day, “is clearly not enough to get through tough times”.

Payments made by the federal government have been dwarfed by support offered by charities.

The Australian Red Cross — which received $127 million in donations for bushfire relief — is making payments of $20,000 to households who lost their homes. It is also paying $20,000 to the families of those killed to help with unexpected costs, such as funerals, and is making payments to help those affected to pay utility bills.

Workers who have lost their livelihoods, even temporarily, have been doing it tough.

"Now, the fires have impacted the town dramatically, a lot of people have been put off work for I don't know how long, it could be a week, it could be months," Robert Provenzale, a displaced worker from Batemans Bay on the NSW South Coast told the ABC on January 7.

Meanwhile, the owner of the Big 4 Bright Holiday Park told the Sydney Morning Herald on January 20 that, with the park at 5% capacity (against the usual occupancy rate of 95% during the Christmas holidays), they were running a “skeleton scale roster” to ensure staff had at least some income.

Even though economically impacted by the fires, residents of the town of Bright were not able to access the DRA.

The Australian Council of Trade Unions (ACTU) called for DRA payments to be raised to the level of the minimum wage. It also demanded workers indirectly impacted by the bushfires (by impassable roads, for instance) also have access to the payments.

The ACTU also called for increased payments for volunteer firefighters, many of whom have been unable to work for weeks owing to their firefighting commitments. ACTU assistant secretary Liam O'Brien said: "The proposed one-off payment for firefighters will not provide the financial security that households and communities need given the size and scale of this bushfire crisis."

Underinsurance

While insurance companies are busy jacking up the prices of premiums in response to the fires, “underinsurance” means many people impacted by the bushfires will be unable to afford to rebuild.

Underinsurance occurs where the insured value (of a house) is insufficient to fund the cost of rebuilding. According to researchers Chloe Lewis, Christine Eriksen and David Bowman, writing in The Conversation, “a common issue is that people insure based on their home's market value. But rebuilding is often more expensive.”

Rebuilding in fire-prone areas also means meeting the latest construction standards. This raises the cost of a rebuild, in some cases making it prohibitive. The impacts on working people in impacted communities are potentially devastating. For those without insurance, the prospects are even worse.

The bushfire season in eastern Australia has months to run. As evidenced by recent fires near Canberra, the impacts may not be limited to areas already affected.

And while the fires may imperil the promised federal budget surplus, the lived reality for working people in bushfire affected areas is dire.

The government must radically increase its support for all those affected, to ensure that they can rebuild their lives and continue to pay for rent, food and bills while paid work is scarce. Infrastructure damaged during the fires must be quickly repaired, without additional cost to those who use it. 

The ongoing sustainability of rural communities is at serious risk.

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