Government response on Natural Disaster Funding

The Australian Government has recently released a response to the Productivity Commission Report on Natural Disaster Funding.

This commissioned inquiry is the first comprehensive review of disaster funding arrangements in more than a decade.

While disaster management, including risk management and planning, recovery and mitigation, is primarily a responsibility of state and territory governments, the Australian Government will always have a role in supporting states affected by natural disasters.

But the findings of this independent body have made it clear that change is needed.

Since the Commission’s report was published, the Government has been working with states and territories to develop and test a new disaster recovery funding model which will meet the needs of all jurisdictions.

The new model will provide states with funding to rebuild essential public infrastructure based on an upfront assessment of damage and estimated reconstruction prices, rather than the current reimbursement model.

This will provide states with more autonomy to rebuild in the most effective way including improving the resilience of infrastructure for the long term, while also ensuring better budget certainty through the upfront estimate of costs.

These changes will not alter the level of support the Australian Government provides to jurisdictions. Instead, it aims to strike the right balance between recovery and mitigation by reducing barriers to ‘building back better’ when appropriate.

As part of this model, the Government is also exploring the option of states using any cost efficiencies on future mitigation activities.

“We will continue to work with states and territories over the next two disaster seasons to further develop and refine the new arrangements. Current disaster funding arrangements will be maintained during this time” said MP Michael Keenan.

“The Government remains committed to providing high-level strategic direction for all governments to boost resilience to natural disasters through our National Strategy for Disaster Resilience. Importantly, this strategy is aligned with many of the report’s recommendations” said Keenan.

Keenan also said that the government has also made significant investments in disaster mitigation, including:

  • $52 million over 2 years to extend the National Partnership Agreement on Natural Disaster Resilience (NPA) by two years to 30 June 2017
  • $15 million over three years to 2016-17 to implement a National Bushfire Mitigation Program, and
  • $14 million annually for a national aerial fire-fighting capability (NAFC).

The Government’s response is available at Australian Government response to the Productivity Commission Inquiry into Natural Disaster Funding Arrangements page.