The Real Cost of Fire Safety in Australia

by

ACKNOWLEDGEMENT

I certify that the work presented in the dissertation is my own unless referenced

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I would like to express my thanks to my advisor, for his suggestions, comments, patience and understanding. Very special thanks to my parents, my father, my mother, my brother and my sister who were continuously supporting me throughout my life and leaving me free in all my decisions. I would also like to thank my colleagues for his technical support whenever I needed. I would like to thank to Department, all the university managers, teachers and students with whom I have worked.

DECLARATION

I declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. I further declare that this work has not previously been presented in whole or part, for any other award, or published in whole or in part elsewhere, including this university. Furthermore, it represents my own opinions and not necessarily those of the University.

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ABSTRACT

For the first time the total cost of fire in Australia has been estimated. The total cost consists of three components, anticipation, consequences and response. The total cost has been estimated at $12,000 million per annum, representing 1.3% of Gross Domestic Product (2005). 85% of the total relates to anticipation and response, with only 15% related to consequences, which raised questions with respect to the optimality of the current system. To further test the optimality of the system, a structured expert judgement exercise was undertaken. The results further suggest that the current system is not optimal and a reduction in the total cost is possible. Analysis of the data over a 10 year period (1998-2008) shows that consequences are decreasing, while the investment in anticipation and response is increasing, resulting in an increasingly less optimal system. In comparative terms Australia has one of the lowest fire fatality rates in the world, however this comes at a cost, and a sub-optimal system will take resources from other systems which are more needy. The main reason for the sub-optimal nature of the current system is risk perception. Fire is seen as a dreaded threat, and the population perceive the risk to be greater than it actually is (in comparative terms), leading to a disproportionate investment in the hazard. Risk perception is hard-wired, and cannot be reduced; however knowledge of risk perception needs to be considered in investment decisions. Increased investment to address risk perception is not in the best interest of the community, as it will take resources from more needy areas. In order to improve the optimality of the system, an integrated fire risk management approach is necessary, to reduce duplication and ensure efficient use of resources, also market-mechanism should be explored. It is considered that the total cost could be reduced to 1% GDP, which would save the nation $2,000 million annually.

TABLE OF CONTENTS

ACKNOWLEDGEMENT2

DECLARATION3

ABSTRACT4

INTRODUCTION7

Background of the study7

Research Aims and Objectives8

Scope of Research9

LITERATURE REVIEW10

System definition10

Cost in anticipation12

Safety ...