Australian Floods Expose Gaping Holes in DEM Data for the Nation - When is $200 million more than $6 billion?

By David Hocking

Geographically speaking, Australia is pretty flat except for one or two mountain ranges running down the coastal fringe. When it rains in this country, as it has recently, it comes with a vengeance built on 10 years of drought. What looked like a record year for our struggling farmers turned out to be a devastating second “blow below the belt.” I often wonder what drives our farming community to keep going.

One of the interesting outcomes of the Queensland floods has been the sudden recognition by governments that our digital elevation data are not good enough to deal with such events. It seems that this revelation came not as a result of the constant wining by the spatial industries, but rather the concerns of the insurance sector. Not willing to let a good opportunity pass, SIBA responded to press coverage of this sudden interest by our federal government by suggesting it might be wise to first discuss the details with the sector that actually understands this technology. The response from both the insurance sector and the federal government was refreshing.

Of course I’m not for a moment suggesting that our indisputable logic about why there is a need for high resolution digital elevation data swayed the powers that be - that would be too much to hope for. No, it was sheer panic that drove this interest. Let me paint a graphic picture of what fear looks like.

In Australia (and I assume the case is similar elsewhere) a mortgage is covered by insurance, particularly if it exceeds a specific percentage of the market value of the dwelling. Without such insurance being available to a prospective purchaser there is no loan. First problem for governments - a potential strike of capital (i.e. no loans for high risk properties).

Now we address the issue of those who have fairly good equity in their home (prior to the floods). Suddenly, certain homes have dropped significantly in value as they are now seen to be in a high flood prone area – of course they always have been, it’s just that no one who handles planning in government ever took the time to develop a high resolution digital elevation model (DEM) to isolate those high risk areas from urban infill. Hmmm, is there a potential class action suit here?

Sadly, only a small number of insurers have their own high resolution DEMs so the hit was significant to many insurers. The drop in values has come at a time when flood affected homeowners need to borrow for repairs. The banks now have to re-evaluate the loan-to-equity relationship and the news is not good - the result, a potential strike of capital. This is further exacerbated by the likelihood that insurers will no longer insure certain properties due to the high risk of flooding. So once an insurance policy expires, getting it renewed will be difficult indeed. This, too, may create problems for the banks.

SIBA has met with advisers to the Australian government minister responsible for this problem and the fact that they responded to our call is an encouraging sign. But, being somewhat cynical in nature, I suspect that the need will evaporate with the flood waters over time (a relative short time).

The spatial industry - and in fact we are discovering many other industries, too - has been asking government to collect more data, more often and at high resolution so that decisions are based on fact rather than vested interests. SIBA has for the past 10 years been fighting for free and open access to government spatial data. Over the past four years we have had very encouraging signs that this is about to happen.

Sadly though, the first thing the minister wants to do at this very stressful time is to slow down the process of developing a high resolution DEM by demanding that the insurance industry kick in half the cost, or that companies be charged for the data. This shows a poor understanding of the needs of government for these data, let alone the wider community and businesses - and is contrary to all the evidence. It seems that $200 million or so for a high resolution DEM and a national spatial data infrastructure (NSDI) is too much to bear. Apparently they can’t see the value, despite the fact that the clean-up in Queensland and Victoria will be in excess of $6 billion.

Published Monday, February 21st, 2011

Written by David Hocking

Published in


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