New disaster funding arrangements are set to take effect nationally from 1 July, 2018, according to a senior official of the Commonwealth Attorney General’s Department.

Ms Elizabeth Quinn, Assistant Secretary of the Attorney-General’s Disaster Resilience Strategy Branch, provided the update in response to inquiries about the current status of recommendations of the Productivity Commission inquiry into Natural Disaster Funding Arrangements.

She said the Attorney-General’s Department has been consulting extensively with state and territory governments to develop ‘national disaster funding arrangements that include a new funding approach for the reconstruction of damaged public infrastructure’.

The new approach to funding arrangements would be based on upfront damage assessments and estimated reconstruction costs, rather than the reimbursement of actual costs, which had sometimes occurred years after the disaster.

Following the release of the Productivity Commission’s recommendations in May 2015, the Australian Coastal Councils Association wrote to former Environment Minister, Greg Hunt, expressing grave concerns about a number of the inquiry’s recommendations, including proposals that:
• the Australian Government share of disaster recovery costs be reduced from the current level of 75% to 50%;
• the threshold at which the Australian Government begins sharing recovery costs with a state be increased; and
• the small disaster criterion be increased from $240,000 to $2 million per event.

The Australian Government response to these recommendations indicates that because of the significant level of concerns about any proposal to reduce the Australian Government’s contribution to recovery funding the Commonwealth ‘does not propose to pursue these recommendations at this stage.’

The Australian Government’s response to the inquiry recommendations indicates that the government has been working with states and territories to develop and test new disaster recovery funding arrangements. ‘This will include the reconstruction of essential public assets, based on an upfront assessment of damages and estimated costs, rather than the current post-event reimbursement model.’

The government’s response further states: ‘The proposed new disaster funding arrangements will give greater autonomy to state, territory and local governments to reconstruct damaged public assets in a way that is cost-effective and best suits the needs of local communities.

‘Further, the new arrangements will be supported by national minimum requirements for damage assessment and estimated reconstruction pricing. This will reduce the audit and assurance red tape placed on states and territories under the current reimbursement model.’

The Government has indicated it will be testing certain aspects of the new funding arrangements over the next two disaster seasons, together with the states and territories. The government’s response to the inquiry can be found here.