Natural hazards-related public spending in New Zealand: Tracking costs over time by the nature of spending

Insurance Australia Group (NZ) commissioned Sapere to examine central government spending on natural hazards—how well it is captured, where it is focused, and how it has changed over time. We found:

1. Significant central government spending: Between 2010 and 2025, $18.4 billion was identified in government appropriations, plus $14.1 billion in public insurance spending (partly funded by levies and reinsurance).
2. Spending is increasing and recovery-focused: Most spending follows major events and is focused on recovery, with baseline spending also rising.
3. Wider costs are even larger: IAG NZ estimates the annual cost of natural hazards could be as much as 4.3% of GDP when private costs and broader social and economic costs are included. Australian analysis suggests direct costs may understate true economic costs by at least 50%.
4. Other parties bear major costs: Local government, iwi/Māori, insurers, private entities and households also incur significant expenses.

With data limitations, we took a conservative approach building on earlier work by the Office of the Auditor-General that likely underestimates spending. We identified areas of improvement that would help including better reporting, clearer categorisation, and coordination with other government levers. Addressing those areas of improvement would enhance understanding and in time potentially effectiveness.

The report was written by Angus White, Corina Comendant, Douglas Yee, and David Moore.

Thanks to those that engaged with us as part of this work.

Further information about this work can be found on the IAG website: New Zealand’s $64b spend on natural hazards heavily skewed to recovery over resilience