Floods hit the disadvantaged hardest and drive them deeper into poverty

When it comes to extreme weather events, Australians are hit hard. From bushfires, heat waves and droughts through to floods, the country experiences it all. But where and which Australians experience climate vulnerability is not an equal playing field.

People and communities who are already facing economic and housing insecurity—two forms of social disadvantage—are also more susceptible to climate-related disasters and suffer disproportionate impacts.

This is particularly concerning given the increase in prevalence of climate-related hazards in Australia, which are projected to become even more frequent in the coming decades.

Already, compared to similar developed countries, Australians bear the second-highest per capita economic costs and insured losses from extreme weather.

The estimated losses from climate-related disasters amount to AUD$4.5 billion annually, and a sizable proportion of this damage is caused by flooding.

We know that certain groups are more vulnerable to floods—those experiencing material deprivation or lower socioeconomic status—but we wanted to understand if these groups are also more likely to live in flood-prone areas.

Our analysis for a new Victorian Council of Social Services report on the 2022 Victorian floods found that 59% of regional flood-affected areas already had poverty rates above the regional average.

After the floods, these effects were exacerbated by increases in poverty, risk of depression and unemployment rates.

Who is most affected by floods?

Our analysis looked at which communities and cohorts were most affected by the flood and how this exposure affected people's economic, social, physical and mental well-being.

In October 2022, Victoria had its wettest month since records began in the early 1900s, which led to flooding across the state from the Goulburn to the Maribyrnong river systems.

These floods took two lives and damaged or destroyed 5017 homes and businesses.

For the analysis of spatial injustice—the unequal opportunities and resources that exist due to location—before and after the floods, we identified that 90% of the flood-affected areas were regional and 10% were in Metropolitan Melbourne.

Socioeconomic and demographic data from a range of sources were overlaid on the flood map to establish a baseline of which groups were exposed to the flood and how the disaster affected communities.

Before the floods

How communities fare and bounce back after a disaster is, in part, explained by the capacities and resources they have prior to the disaster event.

2021 census data helped us profile communities before the 2022 flood events to understand which were more or less likely to be exposed to the hazard and what social disadvantages they experienced.

We also used ABS's Index of Household Advantage and Disadvantage (IHAD), a measure of socioeconomic status, to provide the full picture.

This data showed us that people experiencing the highest socioeconomic disadvantage—who are overrepresented in regional areas—were more likely to live in flood-affected regional areas (33.96%, roughly 1 in 3 households) than unaffected regional areas (28.06%).

Similarly, a majority, 59%, of affected regional areas had a rate of poverty above the regional average.

In the heavily affected areas of Rushworth, Wodonga, Mooroopna, Robinvale, and Seymour, more than one in six people were experiencing poverty.

Aboriginal and Torres Strait Islander people, as well as culturally and linguistically diverse people, were more likely to live in regional flood-affected areas too.

While lower socioeconomic groups have fewer assets at risk, researchers have consistently found that the relative economic burden of floods is higher for lower socioeconomic groups.

Lower socioeconomic groups and those in poverty are less likely to afford insurance, more likely to experience homelessness and unemployment, and have less funds available for emergencies.

Economic resources provide a buffer when people and communities need to respond and recover, and a lack of financial capacity undermines people's ability to adapt and bounce back.

The analysis suggests a significant spatial injustice, as those most exposed to the disaster are also those who are most vulnerable.

After the floods

We conducted another analysis of how communities fared after the floods by comparing exposed and unexposed communities.

To do this, we used the Household Income and Labour Dynamics of Australia (HILDA) survey to find individuals with similar demographic characteristics, socioeconomic and health status one year before the disaster to see how they differed by exposure to the floods.

We looked at income, employment and labor force participation, and health and well-being.

There was a considerable drop in disposable income between 2021 and 2023 for households affected by the floods compared to those who weren't—AUD $439 less per week, which amounts to an AUD $22,818 shortfall over a year.

We also found an increase in the poverty rate after the floods, with one in five people experiencing poverty in exposed areas.

These economic hardships may be explained by the rise in unemployment and labor force non-participation, which rose for affected areas from 31.1% in 2021 to 34.5% in 2023.

This rate of unemployment and non-participation was 9.6% higher than the unaffected group.

There were also impacts on well-being with heightened risk of depressive symptoms and a reduction in physical and social functioning.

Strong social connections within a community support health and well-being and are important for disaster recovery.

A reduction in social functioning in affected communities is concerning, as it could undermine the bonding social capital needed to bounce back from hazards.

Improving disaster preparedness

A clear picture emerges: there is considerable overlap between social disadvantage and the risk of exposure to floods.

Victorians who face poverty and disadvantage were more likely to live in the path of the 2022 floods, and there is a significant toll for affected communities.

Thinking about social disadvantage needs to be at the forefront of disaster preparedness, as susceptibility and exposure overlap, increasing risks for communities that already face stiff challenges.

Mapping out the social vulnerabilities is instrumental for preparedness, response and recovery efforts.

The 2020 Bushfire Royal Commission identified the need to address vulnerability and foster disaster resilience, which led to the development of initiatives, including the Disaster Ready Fund.

In our report, we recommend that Commonwealth government programs aimed at risk reduction should prioritize equity for people experiencing poverty and disadvantages and that community leadership from affected communities is critical.

State governments should consider climate risks when developing new projects and establish resilient housing programs in flood-prone areas to help people with limited individual resources for adaptation.

These measures would go a long way in increasing resilience to climate-related disasters.

More information:
Ripple Effects: Spatial injustice and the 2022 Victorian floods: vcoss.org.au/climate-change-en … 6/03/ripple-effects/

Provided by University of Melbourne