The Actuaries Institute has responded to the 2025-26 Federal Budget with a call for a more deliberate, future-oriented policy approach to manage systemic risks linked to climate change and technological disruption.
While recognising the government’s efforts to alleviate near-term cost-of-living pressures, the institute emphasised that long-term planning remains essential to safeguard Australia’s economic sustainability.
Elayne Grace, CEO of the Actuaries Institute, said the budget offers necessary relief but must also support broader structural priorities.
“The institute recognises the impact of cost of living pressures on Australian households and supports targeted relief measures. However, these short-term measures must be balanced with strategic investments in our long-term economic future,” she said.
The institute referenced recent insurance data showing average annual losses from extreme weather events now exceeding $4.5 billion – more than twice the 30-year trend.
Grace noted growing affordability issues in home insurance, with some households paying premiums equivalent to nearly ten weeks of annual income, especially in high-risk flood zones.
“Our research reveals that one in seven Australian households now experience extreme affordability pressure for home insurance, with premium quotes of nearly 10 weeks of annual income for these households. This disproportionately affects those already facing financial stress, particularly in areas with high flood exposure,” she said.
Echoing the need for longer-term thinking, the Insurance Council of Australia (ICA) reiterated its proposal for a $30.15 billion Flood Defence Fund.
The plan, which would span 10 years and involve joint federal-state investment, includes:
An ICA spokesperson welcomed continuity in current resilience programs, but noted that the budget did not provide new investment in disaster mitigation.
“Driving down this risk through resilience investment will be essential to building a more resilient economy and better protecting Australian homes and businesses,” the spokesperson told Insurance Business.
The National Insurance Brokers Association (NIBA) also pushed for more proactive government action. Its pre-Budget 2025-26 submission recommended scaling up the Disaster Ready Fund, launching a national co-funded household resilience scheme, and forming an advisory council on emerging risks.
Beyond climate adaptation, the Actuaries Institute highlighted the rising importance of artificial intelligence and data governance. It called for clearer national direction and stronger safeguards around emerging technologies.
According to the institute, actuaries are uniquely positioned to help guide ethical AI development through their experience in modelling risk and analysing complex data environments.
The Financial Services Council (FSC) described the budget as delivering stability ahead of the federal election.
CEO Blake Briggs acknowledged continued support for superannuation compliance and tax provisions for managed investment trusts. He added that while regulatory improvements are a step forward, more significant economic reform is needed.
“As one of the largest contributors to the domestic economy, this continued fine tuning of the financial services framework is welcome; however, there remains significant opportunity for the next parliament to refocus on economic growth and regulatory simplification opportunities to grow the economy,” he said.
The FSC has advocated for reforms such as simplifying breach reporting, easing the rationalisation of legacy financial products, and standardising labels for responsible investment products.
