The Actuaries Institute has called for increased government investment in climate adaptation and artificial intelligence (AI) safety as part of its 2026–27 federal budget submission, released Friday.
The professional body’s submission identifies five priority areas for government funding, with climate resilience and AI capability among the most critical needs facing Australia’s economy.
Climate adaptation measures top the institute’s recommendations, citing disaster costs currently at $38 billion annually and forecast to reach $73 billion by 2060. The submission emphasises proactive investment in resilience infrastructure to reduce long-term fiscal impacts.
“We must invest proactively in resilience measures that protect communities and reduce the long-term fiscal impact of natural disasters,” said Elayne Grace, CEO of the Actuaries Institute.
The institute recommends establishing a National Adaptation Investment Framework and removing state-based insurance taxes to improve affordability. Research shows 15% of Australian households faced extreme home insurance affordability pressure as of March 2024.
The submission also advocates for implementation of the National AI Plan and the establishment of an AI Safety Institute to build sovereign capability while managing risks. Recommendations include investment in local AI development, computing infrastructure, and widespread adoption support for small and medium-sized enterprises.
Health system reform is the third priority area. The submission highlights Australia’s fragmented personal risk protection system, spanning 22 funding mechanisms totalling $18 billion annually. Mental health workers’ compensation claims cost four times more than other claims and have grown 43% over the past decade.
The institute urges a comprehensive review of the personal risk protection system and continued focus on National Disability Insurance Scheme sustainability, including addressing workforce supply constraints and implementing new planning frameworks.
Life insurance modernisation recommendations include a federal recommitment to a product rationalisation framework, enabling consumers in legacy products to transfer to contemporary products with appropriate protections.
Intergenerational equity measures, particularly reforms to housing affordability and the tax system, round out the five-point submission. Rising house prices relative to wages in metropolitan areas create intergenerational inequity, while climate-driven price declines in high-risk regions could drive geographic inequity.
“Australia faces a pivotal opportunity to capture AI benefits while managing risks through the National AI Plan and AI Safety Institute,” Grace said. “Combined with essential reforms to health, disability and insurance systems, these measures will strengthen both our economic capabilities and social foundations.”
The submission acknowledges that most priority areas require collaborative approaches with state and local governments.
