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1.3 Embed Resilience

Victoria’s changing climate is leading to more frequent and severe natural hazards and emergencies including bushfires, extreme heat, and flooding. It is also increasing the likelihood of extreme weather events occurring consecutively, or even at the same time.1 This was demonstrated during 2019–20, where drought and bushfires were rapidly followed by storms and flooding. The COVID-19 pandemic rapidly followed this series of emergencies, compounding their effects.2

Climate change and its impact on natural disasters has a human and a financial cost.3 These include loss of life, negative impact on health and wellbeing, reduced safety, biodiversity loss, and damage to property, infrastructure, agriculture and industry.4 The economic costs from bushfires alone are projected to rise from an average of $172 million a year in 2014 to $378 million a year by 2050.

Heatwaves caused by climate change are expected to cost Victoria $179 million annually by 2030,5 and could cause an extra 6214 deaths in Victoria by 2050.6 The costs associated with severe natural disasters can be much greater. For example, the economic costs to agriculture of the 2010–11 Victorian foods were estimated at $1.5 billion to $2 billion, including lost pasture, crops, stock and equipment.7 Costs associated with Victoria’s Black Saturday bushfires were estimated at more than $4 billion.8

Climate change is not the only risk Victorian communities face. The COVID-19 pandemic has led to health and economic damage worldwide. The speed of change is increasing, and risks can escalate rapidly.9 Infrastructure, and the communities it serves, urgently need to adapt to this changing landscape. This will involve taking practical actions to manage risk, increase protection, and strengthen resilience.10

Victoria’s coastal areas face increased flooding and erosion

Victoria’s coasts are home to nearly 14% of the state’s population11 and they receive around 70 million visits each year.12 Victoria’s coasts have special significance to many of Victoria’s First Nations peoples. Coastal infrastructure supports communities and industries, including tourism and fishing, and caters for residents and seasonal tourists.

For instance, Lorne welcomes an extra 20,000 people during the annual Pier to Pub swim, a 20-fold increase of its normal population.13 Rising sea levels and increasing heavy rainfall are projected to increase coastal erosion and flooding, damaging many low-lying ecosystems, infrastructure, and homes.14 More frequent storm surges can make this worse.

Victoria is heavily exposed to rising sea levels. A sea level rise of 0.8 metres would put $18.3 billion of infrastructure at risk of inundation and erosion, including: 15

31000 to 48000 homes valued at 6.5 10.3 billion 300dpi
31,000 to 48,000 homes valued at $6.5 to $10.3 billion
527 kilometres of roads valued at 9.8 billion 300dpi
527 kilometres of roads valued at $9.8 billion
Up to 2000 commercial buildings valued at 12 billion 300dpi
Up to 2000 commercial buildings valued at $12 billion

Valuable infrastructure is close to the coast, including buildings, hospitals, roads, rail, electricity, telecommunications, stormwater, drainage, and sewerage assets. Rising sea levels have social and economic impacts beyond the infrastructure itself. Erosion is visibly threatening the Great Ocean Road’s $1.1 billion

visitor economy,16 while Phillip Island17 and Inverloch18 are witnessing the loss of popular beaches. Coastal ecosystems could also change, affecting biodiversity. For example, mangroves usually found in coastal saline water have begun appearing in the Gippsland Lakes.19

Resilient infrastructure can better withstand extreme events

Victoria’s social and economic well being depends on its critical infrastructure.20 Critical infrastructure supports services which are essential for everyday life, such as food, water, energy, transport and health care.21 It is also essential for the community, economy and governments to withstand and respond to crises.22

A disruption to critical infrastructure can have significant implications, affecting supply chains and service continuity.23 The 2019–20 summer bushfires demonstrated the vulnerabilities of communities when critical infrastructure fails in an emergency. Thirty-eight towns lost communication, mostly caused by power outages, and impassable roads cut off 17 of these towns.24 Similarly, a changing climate will alter the environmental conditions under which infrastructure must perform. In contrast, the COVID-19 pandemic highlighted the adaptability of

Victoria’s infrastructure, as critical infrastructure services and networks were able to reconfigure quickly and offer different models of delivery.25 Digital technologies played a major role in supporting business and community resilience, highlighting the importance of technology and innovation in prevention, preparedness, response and recovery. Infrastructure will need to be resilient so it can be relied upon during a crisis, or in changing social, economic, and environmental circumstances.

Infrastructure resilience can be improved in different ways, including by building to different standards and designs, building in safer places, or having better integrated plans to protect and rapidly repair it when damaged. Resilience considerations should be central to infrastructure investment decision-making. The infrastructure Victoria builds now will need to serve communities for many years to come.

Communities need to build resilience too

Infrastructure can support community resilience, for example by providing emergency shelter during extreme heat events, by enabling transport and communications during times of emergency, or by supporting emergency services’ response.

However, the intensifying nature of extreme events will place escalating demands on even the most resilient infrastructure and challenge the capacity of emergency services.26 Communities must form realistic expectations of emergency services’ ability to mitigate risk or respond in the face of catastrophe. This also means that communities and individuals must maximise their own preparedness for potential disasters, based on an informed understanding of the available emergency response.

An inquiry into the 2019–20 Victorian bushfire season identified that, despite considerable progress, a challenge remains in ensuring people have a clear understanding of the risks they face.27

Community resilience is based on more than the infrastructure and services that support it. Resilient communities work together to cope with emergencies, to strengthen essential infrastructure and facilities so that support systems continue to function when needed. They stay informed, so they are better able to make decisions and take action before, during and after emergencies.28 Victoria’s shared responsibility approach to emergency management leverages local knowledge, resources and experience in emergency planning, and helps to develop community resilience.29

Recommendations to embed resilience

Infrastructure Victoria is making the following recommendations to embed resilience. They can also help climate change adaptation (see section 1.2). Elsewhere we make recommendations to improve the resilience of telecommunications infrastructure (see recommendation 85), make social housing suitable for changing climates (see recommendation 94) and create climate-adapted facilities for rural communities (see recommendation 90).

Recommendation 18: Invest in protection and adaptation for Victoria’s coasts

In the next year, develop clear guidance on coastal adaptation planning, including thresholds, triggers, and planning guidelines to support local area decision-making. Invest in coastal protection upgrades and maintenance, including beach and protection and rehabilitation, and storm surge protection, over the next eight years.

Victoria’s coasts are vulnerable to climate change, erosion, increasingly severe storm surges, rising sea levels and population growth.30 Left unchecked, these events and activities will threaten residential, commercial, and industrial property, as well as essential public infrastructure.31

Victoria’s culture is indelibly influenced by the coast. With 2000 kilometres of Victorian coastline,32 almost one in five Victorians live near the coast, and 80% visit coastal areas each year.33 Coastal areas drive regional economies, with contributions from ports, trade, fisheries and tourism. Coasts also have heritage value with complex histories and meaning, including places of natural significance and the past and present traditions of Aboriginal Traditional Owners.34 Faced with rising sea levels and extreme weather, coastal communities will urgently need to adapt and make difficult decisions about when to protect or modify infrastructure, or when to retreat and let nature take its course.35

The Victorian Government’s Marine and Coastal Policy guides decision-makers in the planning, management and sustainable use of Victoria’s marine environment.36 It outlines different adaptation actions to help manage climate change impacts on coastal communities, including by redesigning or enhancing protection of assets. It also considers retreating from threatened areas by relocating assets.37 This usefully sets out a pathway approach to guide decision-making but fails to offer any guidance on what circumstances or thresholds should trigger a particular response.

At the same time, many of Victoria’s coastal protection assets are in poor condition or are approaching the end of their life.38 These include a mix of natural and built infrastructure to help protect against inundation and erosion, including sea walls, artificial headlands, dune management and beach nourishment. The Victorian Auditor-General found coastal asset maintenance has been reactive and not wholly effective, focusing on assets in the worst condition or repeating the previous year’s activities rather than taking a risk-based approach.39 Victorian Government agencies tasked with coastal protection have unstable and unreliable funding, causing more coastal infrastructure to degrade and extending maintenance backlogs.40 For example, Parks Victoria costed its backlog at over $5 million for three years running.41

To support communities to proactively plan for coastal hazard risk, the Victorian Government should specify appropriate thresholds or triggers for each type of adaptation action under the Marine and Coastal Policy. Guidance should support local area risk assessment and decision- making on coastal hazards, aiding communities to implement the pathway approach to coastal adaptation planning outlined in the policy.42 The implications for Victoria’s statutory and policy planning framework can be considered to better manage new development and make any necessary changes in land use.43 To further safeguard Victoria’s coasts, the Victorian Government should commit at least an extra $30 million for coastal infrastructure maintenance and upgrades in the coming eight years. This would provide funding certainty for agencies involved in coastal protection, building on previous one-off funding commitments,44 while allowing for more strategic management of coastal assets most at risk

Coastal management and adaptation in Queensland and Western Australia

QCoast2100: coastal hazards adaptation program
QCoast2100 is a $13 million Queensland Government commitment to support local councils in proactively managing the risk to coastal development.45 The program provides the funding, tools and technical support for coastal councils to prepare and implement adaptation plans and strategies to address coastal hazard risks. The program has supported 31 out of 41 eligible councils to develop a Coastal Hazard Adaptation Strategy addressing coastal hazard risks related to climate change. It includes all ‘at risk’ major urban centres and more than 90% of the ‘at risk’ population along Queensland’s coast.

QCoast2100: coastal hazards adaptation program
QCoast2100 is a $13 million Queensland Government commitment to support local councils in proactively managing the risk to coastal development.45 The program provides the funding, tools and technical support for coastal councils to prepare and implement adaptation plans and strategies to address coastal hazard risks. The program has supported 31 out of 41 eligible councils to develop a Coastal Hazard Adaptation Strategy addressing coastal hazard risks related to climate change. It includes all ‘at risk’ major urban centres and more than 90% of the ‘at risk’ population along Queensland’s coast.

Western Australia Coastal Zone Strategy

The WA Coastal Zone Strategy46 is an integrated framework for coastal management and adaptation. Together with the State Coastal Planning Policy47 and the Coastal Hazard and Risk Management and Adaptation Planning Guidelines,48 it outlines Western Australia’s approach to coastal planning and management, including the Western Australian Government’s position on coastal protection measures to mitigate the impacts of coastal erosion and inundation.

The strategy stipulates that coastal protection works should only be undertaken as a last resort, when justified in the public interest to protect high value property and infrastructure, with funding based on a ‘beneficiary pays’ principle to minimise the risk to public funds. Wherever possible, existing developments should use planned or managed retreat. Where retreat is not viable, design approaches to accommodate risk should be considered.

Recommendation 19: Build back better after emergencies

In the next year, consider policy changes and funding mechanisms so high priority public infrastructure destroyed by emergencies is built to a more resilient standard or in less vulnerable locations.

Resilient infrastructure supports communities to withstand, respond to, and recover from the impacts of disasters, emergencies and extreme weather events. These events can destroy public infrastructure, showing its susceptibility to damage. From 2002–03 to 2010–11, about 1.6% of Australia’s total public infrastructure spending was on restoring critical infrastructure after extreme weather events. Directly replacing Australia’s critical infrastructure will need an estimated $17 billion from 2015 to 2050 due to the impact of natural disasters. Most of this cost will be borne by governments, and ultimately taxpayers, as owners of these assets.49

Community recovery and rebuilding after natural disasters is an opportunity to reassess the resilience of lost or damaged infrastructure, including its location and construction quality. The urgency to rebuild can overwhelm careful consideration of future needs, and insurance policies often only fund ‘like-for-like’ reconstruction. Infrastructure damaged by emergencies is clearly vulnerable. Simply replacing it does not increase resilience and risks the same damage reoccurring.

The Productivity Commission observes that governments overinvest in post-disaster reconstruction and underinvest in measures that limit these impacts in the first place. As such, natural disaster costs have become a growing, unfunded government liability.50 Carefully targeted investment in resilience measures now will reduce government expenditure on natural disaster relief and recovery by more than 50% by 2050.51 Infrastructure Australia has called for greater focus on resilience and infrastructure maintenance, noting the frequency and intensity of extreme weather events is increasingly likely to threaten certain assets.52

The Victorian Government should consider measures to enable resilience when rebuilding infrastructure destroyed in emergencies. It should also review agreements so insurance payments can be used to fund more resilient infrastructure rather than a ‘like-for-like’ rebuild. For example, roads could be rebuilt to be more resilient to flood or fire, or community and emergency services infrastructure could be consolidated in a safer place or built to a higher standard.

This can help assure communities they will be less vulnerable, reduce emergency disruptions, and reduce recovery and reconstruction costs. This process should consider the standard and location of infrastructure in assessing vulnerability and compare the whole-life costs of building to higher standards with the future risk of damage and repair or replacement costs.

Similarly, the Victorian Government should consider the most appropriate mechanism to fund the costs of ‘building back better’.53 One option is a dedicated recovery betterment fund to supplement insurance payments so infrastructure can be rebuilt to a higher standard, or in a different location. This helps reduce the time it takes to source funding to cover the gap between replacement costs and more resilient infrastructure. For example, in response to the 2019 north Queensland floods, the Queensland and Australian governments established a $100 million fund to build better, more resilient, essential public infrastructure.54

Cost sharing between the Victorian and Australian governments for relief and recovery efforts following eligible disasters is governed by the Disaster Recovery Funding Arrangements 2018.55 Urgent financial assistance is also provided using Treasurer’s Advance funding.56 A review of the Disaster Recovery Funding Arrangements is underway, led by the Australian Government, which will consider how funding can be better used to improve infrastructure resilience during the rebuilding process.57 Any new funding mechanisms should continue to include appropriate cost sharing arrangements between the Victorian and Australian governments.

Recommendation 20: Improve critical infrastructure information flows and embed resilience

Over the next five years, expand information sharing capabilities and embed resilience across and between critical infrastructure sectors and jurisdictions. Among mechanisms to achieve this, consider expanding the Victorian legislated definition of critical infrastructure beyond energy, water, and transport.

Critical infrastructure helps sustain human life and maintain wellbeing. During emergencies and disasters, it is the highest priority to keep communities safe and functioning.

Critical infrastructure resilience refers to its capacity to function or be rapidly repaired during or after emergencies. Critical infrastructure systems, networks and supply chains are increasingly complex and interconnected. Disruptions in one sector can quickly affect others, causing serious cascading failures.

Recent emergencies show that a wide range of infrastructure is crucial to Victorian communities. For instance, telecommunications outages during the 2019–20 summer bushfires impeded rapid dissemination of information to communities at risk.58 Similarly, the COVID-19 pandemic has tested the ‘surge’ capacity of health services59 and showed the crucial function of food and grocery supply chains.60 Emergency events do not respect geographical boundaries or organisational responsibilities. The 2019–20 bushfires highlighted difficulties in sharing information on critical infrastructure assets, particularly when managing cross-border fires. Critical infrastructure operators, sectors and governments limited or delayed sharing information, inhibiting a timely, coordinated response, and good recovery planning.61

The Victorian Critical Infrastructure Register provides a central record of the infrastructure that is most important to the functioning of the Victorian community, to allow for information to be accessed for coordination. However, some forms of infrastructure, like health, and information and communications technology (ICT), are not included. Access to the register is restricted. Deeper consideration should be given to allowing other appropriate agencies to have access, their ease of access, and the ICT systems and capabilities required to achieve this while still maintaining security.

The Victorian Government should improve information sharing capabilities across all critical infrastructure sectors and jurisdictions, building upon the existing Sector Resilience Networks. All critical infrastructure sectors should be required to consider resilience when building and maintaining infrastructure, as is currently the case for energy, water and transport, which are defined as an essential service in the Emergency Management Act 2013.62 Without this requirement, communities are vulnerable to more widespread disruption and higher recovery costs.63

The Australian Government has proposed amendments to the Security of Critical Infrastructure Act 2018 to bring 11 sectors within the scope of critical infrastructure, aiming to better respond to natural disasters and human-induced threats.64 Once implemented, the Victorian Government should review its legislative definition of an essential service to reflect the broader range of infrastructure that is critical in emergencies, while seeking to avoid duplication of obligations for those sectors affected. Updates should encompass existing policy, governance arrangements, and decision-making mechanisms.

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